Orsted has reported a 23% drop in operating profit (EBITDA) for the first nine months of 2023.
EBITDA of €2.6bn (DKr 19.4bn) was achieved during the period, compared to €3.4bn (Dkr25.4bn) in the same period in 2022.
Excluding new partnerships, EBITDA amounted to €2.1bn (DKr15.4bn), €0.13bn (DKr1bn) higher than in the same period last year.
Earnings from offshore sites amounted to €1.7bn (DKr13bn) , which was €0.9bn (DKr6.8bn) higher than in the same period last year.
Orsted said this figure was positively affected by ramp-up at Hornsea 2 and Greater Changhua 1 and 2a and the negative impact from hedges in 2022 not being repeated.
However, due to adverse impacts relating to supply chain delays, increased interest rates, and the lack of an OREC adjustment on Sunrise Wind, Orsted has recognised impairment losses of €3.8bn (DKr28.4bn) in the first nine months of 2023.
The majority of these (€2.7bn) relates to its US offshore project Ocean Wind 1.
Orsted’s previously guided EBITDA for 2023, excluding new partnership agreements, of up to €3.1bn (Dkr23bn) remains unchanged.
This excludes a provision of up to €147m (DKr11bn) related to potential cancellation fees following the Danish developer’s decision to cease the development of Ocean Wind 1.
Due to a later timing across our project portfolio and the termination of investments on Ocean Wind 1, Orsted’s gross investment for 2023 is now expected to amount to up to €5.9bn (DKr44bn), a reduction of €0.5bn (DKr4bn).
Mads Nipper, group president and chief executive of Orsted,(pictured) said: “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 DKr1bn compared to the same period last year, and earnings from our offshore sites have more than doubled compared to last year.
“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.
“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 MWRevolution Wind project, progressing it to the construction phase with an attractive forward-looking value creation.
“Based on the challenged US portfolio and the current market conditions, we’ve initiated numerous actions to ensure our capital structure and rating and to improve our competitiveness and value creation.”