The majority of impairment losses, DKK 19.9 billion, relate to the Ørsted’s Ocean Wind 1 offshore wind project. The company unveiled it ceased the development of the 1.1 GW Ocean Wind 1 and the 1,148 MW Ocean Wind 2 projects offshore New Jersey.
Net profit amounted to DKK -19.9 billion, and return on capital employed (ROCE) came in at -14 per cent. Net profit and ROCE excluding impairment losses amounted to DKK 8.5 billion and 13 per cent, respectively, said the Danish renewable energy developer.
“The current market situation with supply chain challenges, project delays, and rising interest rates has challenged our offshore projects in the US, and in particular our offshore project Ocean Wind 1, which has led to significant impairments in Q3 2023,” said Mads Nipper, Group President and CEO of Ørsted.
“Therefore, as part of our ongoing review of our US offshore wind portfolio, we’ve decided to cease the development of Ocean Wind 1 and Ocean Wind 2. At the same time, we’ve taken final investment decision on the 704 MW Revolution Wind project, progressing it to the construction phase with an attractive forward-looking value creation.”
In August, Ørsted said it could book impairments of DKK 16 billion (EUR 2.15 billion) on its US portfolio due to adverse impacts relating to the supply chain, lack of favorable progress in Investment Tax Credit (ITC) guidance, and increased interest rates.
Operating profit (EBITDA) for the first nine months amounted to DKK 19.4 billion and, excluding new partnerships, EBITDA amounted to DKK 15.4 billion, DKK 1.0 billion higher than in the same period last year, according to the company.
Earnings from offshore sites amounted to DKK 13.0 billion, which was DKK 6.8 billion higher than in the same period last year, and were positively affected by ramp-up at Hornsea Two and Greater Changhua 1 and 2a and the negative impact from hedges in 2022 not being repeated, Ørsted said.
The company’s previously guided EBITDA for 2023, excluding new partnership agreements, of DKK 20-23 billion is said to remain unchanged when excluding a provision of approximately DKK 8-11 billion related to potential cancellation fees following Ørsted’s decision to cease the development of Ocean Wind 1.
Due to a later timing across its project portfolio and the termination of investments on Ocean Wind 1, the company’s gross investment for 2023 is now expected to amount to DKK 40-44 billion, a reduction of DKK 4 billion.
“We’re pleased with the performance of our operating assets in the first nine months of 2023, which drives a satisfactory development in our earnings. Our operating profit (EBITDA) excluding new partnerships increased by DKK 1 billion compared to the same period last year, and earnings from our offshore sites have more than doubled compared to last year,” said Mads Nipper.
