(Finance) – Orstedthe Danish renewable energy giant, announced write-downs totaling DKK 12.1 billion (approximately 1.62 billion euros) in fourth quarter of 2024 due to US interest rate increases, the value of seabed leases and the execution of Sunrise Wind.
In particular, it development of long-term US interest rates led to a 75 basis point increase in the weighted average cost of capital. This increase had a negative impact on the value in use of the US portfolio, mainly on offshore wind projects, leading to a write-down of DKK 4.3 billion in the fourth quarter. Market-based valuation guidance for seabed leases located off the coasts of New Jersey, Maryland and Delaware, reflecting prevailing market uncertainties among other factors, leads to an impairment of 3.5 billion DKK.
“The announced devaluations, and particularly the ongoing construction challenges, are very disappointing – said the CEO Mads Nipper – However, we are encouraged by the performance of our operations and are confirming our full-year EBITDA guidance, supported by growing energy production from our growing global fleet of renewable energy assets.”
“We remain committed to the US market long-term with its potential for renewable energy to meet growing electricity demand and create thousands of industrial jobs in the United States,” he added. “We continue to navigate the complexities and uncertainties we face in a nascent offshore sector in new US market. Our dedicated efforts to strengthen execution and navigate supply chain challenges will continue.”
Orsted expects an operating profit (EBITDA) – excluding new partnership agreements and cancellation charges – of DKK 24.8 billion in 2024, in line with the latest guidance. Operating earnings from Offshore and Onshore were the main contributors and delivered results in line with our expectations.