Jan 21, 2025
Orsted announces a $1.7 billion write-down due to delays and rising costs associated with the Sunrise Wind project.
On Monday, offshore wind developer Orsted reported an impairment charge of 12.1 billion Danish crowns ($1.69 billion) for the fourth quarter, attributing this to delays and increased costs related to its Sunrise Wind project, alongside rising financing costs in the U.S.
The company noted that it had reevaluated the 924-megawatt offshore wind project, located approximately 30 miles east of Montauk, New York, leading to an impairment of 4.3 billion crowns in the fourth quarter due to these delays and cost increases.
"The impairments announced today, and especially the ongoing construction challenges, are very disappointing," stated Orsted CEO Mads Nipper in a press release.
He further mentioned, "We remain committed to the U.S. market in the long term due to its potential for renewables... We continue to manage the complexities and uncertainties we encounter in the burgeoning offshore industry within the new U.S. market."
Orsted indicated that the anticipated commissioning of Sunrise Wind has now been pushed back to the latter half of 2027, while also noting that project costs have escalated, particularly concerning the monopile foundations necessary to maintain fabrication and installation schedules.
Additionally, Orsted highlighted that the increased financing costs in the U.S. negatively impacted its portfolio, particularly its offshore wind ventures, resulting in an impairment of 4.3 billion crowns in the fourth quarter.
The company's preliminary profit before interest, tax, depreciation, and amortization, excluding new partnerships and cancellation fees, was recorded at 24.8 billion crowns for the entire year of 2024.
The company noted that it had reevaluated the 924-megawatt offshore wind project, located approximately 30 miles east of Montauk, New York, leading to an impairment of 4.3 billion crowns in the fourth quarter due to these delays and cost increases.
"The impairments announced today, and especially the ongoing construction challenges, are very disappointing," stated Orsted CEO Mads Nipper in a press release.
He further mentioned, "We remain committed to the U.S. market in the long term due to its potential for renewables... We continue to manage the complexities and uncertainties we encounter in the burgeoning offshore industry within the new U.S. market."
Orsted indicated that the anticipated commissioning of Sunrise Wind has now been pushed back to the latter half of 2027, while also noting that project costs have escalated, particularly concerning the monopile foundations necessary to maintain fabrication and installation schedules.
Additionally, Orsted highlighted that the increased financing costs in the U.S. negatively impacted its portfolio, particularly its offshore wind ventures, resulting in an impairment of 4.3 billion crowns in the fourth quarter.
The company's preliminary profit before interest, tax, depreciation, and amortization, excluding new partnerships and cancellation fees, was recorded at 24.8 billion crowns for the entire year of 2024.