The DKK 20.2 billion loss followed a DKK 15 billion (€2 billion) profit just a year earlier and prompted Ørsted to update its business plan, including by lowering capacity targets, exiting several nascent offshore wind markets, accelerating sales of project stakes and cutting jobs worldwide.
Without impairment losses and cancellation fees, Ørsted would have made a net profit of DKK 14.9 billion (€1.9 billion) in 2023.
Last autumn, Ørsted scrapped plans for its Ocean Wind 1 and 2 projects off New Jersey while it alsopulled out of offtake agreements for its Skipjack offshore wind cluster off Maryland in January. Today (7 February) the developer confirmed it had pulled out of the growing Norwegian, Portuguese and Spanish offshore wind markets and deprioritised its development activities in Japan, and that it planned for a “leaner development” within floating wind and power-to-x.
Now read: Ørsted cuts jobs and targets, exits markets after ‘extensive review’
Ørsted CEO Mads Nipper said the company faced “substantial challenges” in 2023. He added: “Our financial results are adversely affected by the impairments we took on our US offshore projects in the third quarter of 2023 and the provision for cancellation fees related to ceasing the development of the offshore project Ocean Wind 1.”
‘Strong momentum’
Ørsted’s heavy net loss came despite it being profitable on an operating basis.
In 2023, it recorded an operating profit (Ebitda) of DKK 18.7 billion – though this was down 42% on 2022 levels.
CEO Nipper added: “Despite the short-term challenges, our traction and underlying momentum was strong in 2023. We delivered strong operational results in 2023.”
This 2023 operating result included Ørsted more than doubling Ebitda from its offshore wind sites (DKK 20.2 billion).
The increase was due to the ramp-up of generation at its Hornsea 2 and Greater Changhua 1 and 2a projects in the UK and Taiwan respectively, and due to negative hedges in 2022 not being repeated in 2023. It came despite the impacts of a DKK 9.6 billion provision for cancellation fees, related to its scrapped Ocean Wind 1 project.
In 2024, Ørsted expects Ebitda excluding new partnership agreements and cancellation fees of DKK 23-26 billion and to make gross investments of DKK 48-52 billion.
