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Financial Year: Orsted 2023 With Loss in The Billions - Comprehensive Savings Programme And Redundancies Announced

Copenhagen, Denmark - The Danish energy group Ørsted has published its financial results for 2023.

In operational terms, the offshore specialist recorded a operating profit (EBITDA) of DKK 18.7 billion (approx. EUR 2.51 billion) (2022: DKK 32.1 billion / EUR 4.3 billion). Due to the difficulties with offshore wind energy projects, particularly in the USA, and the associated impairment losses and cancellation fees, the net loss is expected to be high, amounting to minus DKK 20.2 billion (approx. EUR 2.7 billion). In 2022, Ørsted had still reported a profit of DKK 15 billion (approx. EUR 2.0 billion).

Due to the impairments in the offshore wind business, the Group has carried out a comprehensive review of its project portfolio and taken measures to minimise risk. As part of its updated business plan, Ørsted is now pursuing the strategic goal of achieving an installed capacity of 35-38 GW from renewable energies by 2030 (previously 50 GW).

" We’ve revisited our portfolio to prioritise growth options with the highest potential for value creation and at the same time reduce risks in the development and execution of our projects. We remain optimistic about the future of the renewable energy industry, and we’re confident we can be a key contributor in accelerating the renewable build-out in the years to come," says Ørsted CEO Mads Nipper.

To ensure a solid balance sheet, Ørsted will suspend the dividend payment for the financial years 2023-2025 in addition to reducing investment and project development costs. Ørsted's aim is to resume dividend payments.

Ørsted will also accelerate its divestment programme. The energy group expects farm-downs and divestments to contribute to proceeds of approximately DKK 115 billion (approx. EUR 15.4 billion) by 2030, of which approximately DKK 70-80 billion (approx. DKK 9.4-10.7 billion) is expected in 2024-2026.

In addition, Ørsted will review measures to create a leaner and more efficient organisation and has set a target to reduce its fixed costs by DKK 1 billion (EUR 134 million) by 2026 compared to 2023. This also includes a reduction of 600 to 800 jobs worldwide. In this context, the Danish energy group has announced that around 250 employees worldwide are to be made redundant in the coming months.

The Ørsted share fell 1.6 per cent in yesterday's trading to a price of EUR 50.16 (closing price, 8 February 2024, Stuttgart Stock Exchange).

Source: IWR Online, Feb 02 2024