Orsted Expects Core Profit to Rival 2024 Despite Investment Reduction
Orsted, the global leader in offshore wind development, anticipates core profit this year to equal or exceed that of 2024. This announcement comes after the company downsized its investment plans for the coming years, boosting its share prices.
In a move to bolster financial resilience amidst market challenges, Orsted scaled back its planned investment for 2030 by approximately 25%. The company emphasized the absence of funding requirements and highlighted the potential for further cost reductions due to a slower construction pace.
Shares of Orsted surged by 6% in early trading, reducing the year-to-date decline to 8%. Analyst Jacob Pedersen of Sydbank acknowledged investor concerns regarding a potential capital increase.
Despite ongoing supply chain and construction hurdles, Orsted reported progress on most of its projects. However, the company acknowledged continued challenges at its two U.S. offshore construction projects, Revolution Wind and Sunrise Wind.
Orsted successfully renegotiated and settled contracts related to the closure of its New Jersey Ocean Wind project, resulting in a favorable outcome. The company estimates its reversal of cancellation fees at 7.3 billion Danish crowns.
Orsted projects its 2025 operating profit before depreciation, amortization, and exceptional items between 25 billion and 28 billion Danish crowns ($3.5 billion-$3.9 billion), aligning with analyst expectations.
In its annual earnings report, Orsted confirmed a preliminary 2024 profit of 24.8 billion Danish crowns. CEO Rasmus Errboe stated, "2024 was challenging for the industry and Orsted. We faced headwinds and made necessary adjustments."