Ørsted has disclosed its operating profit (EBITDA) for 2024, based on preliminary and unaudited figures.
EBITDA, excluding new partnership agreements and cancellation fees, is projected to reach DKK24.8bn ($3.46bn), consistent with the company’s most recent guidance.
Operational earnings from its Offshore and Onshore business segments were the primary drivers of this performance, meeting expectations.
In Q4 2024, changes in US long-term interest rates resulted in a 75-basis-point rise in the weighted average cost of capital. This adjustment negatively affected the value-in-use of Ørsted’s US portfolio, particularly its offshore wind projects, leading to a DKK4.3bn impairment during the quarter.
Valuation assessments for seabed leases off the coasts of New Jersey, Maryland, and Delaware reflected market uncertainties, resulting in an impairment of DKK3.5bn in Q4 2024. Although the impairment significantly reduced the book value of these leases, Ørsted considers them to retain strategic optionality and long-term value within the evolving US offshore wind market.
The Sunrise Wind project continues on a compressed construction timeline, navigating issues related to supply chain disruptions and construction complexities. This project follows Revolution Wind, which is currently under construction and includes offshore installation activities.
Insights from Revolution Wind, such as revised wind turbine installation rates, have prompted a reassessment of Sunrise Wind, incorporating schedule delays and increased costs. Furthermore, Ørsted has updated its expectations for the installation of the first-ever US offshore high-voltage direct current (HVDC) system, including the jacket and export cables. As a result, the commissioning timeline for Sunrise Wind has been pushed to the second half of 2027.
Rising project costs, particularly for monopile foundations necessary to maintain fabrication and installation schedules, have further increased cost projections for Sunrise Wind. The combined effects of delayed commissioning and higher anticipated project expenses led to an impairment of DKK4.3bn in Q4 2024.
The cumulative impact of increased interest rates, seabed lease revaluations, and Sunrise Wind execution challenges has resulted in a total impairment of DKK12.1bn ($1.7bn) in Q4 2024.
Ørsted Group president Mads Nipper said: “The impairments announced today, and especially the continued construction challenges, are very disappointing. We are, however, encouraged by the performance of our operations, and we’re confirming our full-year EBITDA guidance, supported by the increasing power production from our growing global fleet of renewable energy assets.
“We remain committed to the US market in the long term with its potential for renewables to meet the growing electricity demand and create thousands of industrial jobs across the US.”
