Orsted shares drop 22% after offshore wind group warns of impairments risk
Investing.com -- Copenhagen-listed shares in Orsted A/S (CSE:ORSTED) (OTC:DNNGY) slumped on Wednesday after the offshore wind farm group warned that it may face up to 16 billion Danish crowns (DKK 1 = $0.15) in impairment charges linked to its U.S. projects due to supply issues, elevated interest rates and a lack of progress in tax credit guidance.
Orsted shares are now down by almost 70% from their peak in 2021.
In a statement dated on Sunday, the company said its Ocean Wind 1, Sunrise Wind, and Revolution Wind developments are "adversely impacted" by a handful of supplier delays that could lead to charges of as much as DKK 5 billion.
Meanwhile, discussions with senior federal officials about potential investment tax credits are not "progressing as we previously expected," Orsted flagged. It added that negotiations are ongoing, but warned that if these talks prove unsuccessful it could cause impairments of DKK 6 billion.
Long-dated interest rates in the U.S. have also jumped, hitting Orsted's offshore and onshore projects. If borrowing costs remain at the current level by the end of the third quarter, Orsted said, it may lead to impairments of DKK 5 billion.
However, Orsted said it does not project that the anticipated impact will alter its guidance for annual core earnings.
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