Orsted flags $1.7 billion impairment on Sunrise Wind delays, increased costs

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Finance

Posted By Global Banking and Finance Review

Posted on January 21, 2025

Orsted flags $1.7 billion impairment on Sunrise Wind delays, increased costs

COPENHAGEN (Reuters) -Offshore wind developer Orsted on Monday posted an impairment charge of 12.1 billion Danish crowns ($1.69 billion) in the fourth quarter, citing a delay and higher costs for its Sunrise Wind project, as well as higher U.S. financing costs.

The company said it had reassessed the 924-megawatt offshore wind project, situated about 30 miles east of Montauk, New York, to include delays and increased costs, which would lead to an impairment of 4.3 billion crowns in the fourth quarter.

"The impairments announced today, and especially the continued construction challenges, are very disappointing," Orsted CEO Mads Nipper said in a statement.

"We remain committed to the U.S. market in the long term with its potential for renewables ... We continue to navigate the complexities and uncertainties we face in a nascent offshore industry in the new U.S. market," he added.

The expected commissioning of Sunrise Wind has been delayed into the second half of 2027, Orsted said, adding that project costs had increased in particular with regard to the monopile foundations to keep fabrication and installation on track.

Orsted also said higher U.S. financing costs had hurt its U.S. portfolio, primarily its offshore wind projects, leading to an impairment of 4.3 billion crowns in the fourth quarter.

The company's preliminary profit before interest, tax, depreciation and amortisation, and excluding new partnerships and cancellation fees, landed at 24.8 billion crowns for the full year of 2024.

($1 = 7.1779 Danish crowns)

(Reporting by Gnaneshwar Rajan in Bengaluru and Louise Rasmussen in Copenhagen; Editing by Nia Williams, Rod Nickel and David Gregorio)

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