Ørsted share price crashes by a quarter as company reports billions in losses

Ørsted’s share price fell by 25.7%, from 339.8 Danish Krone (DKK) at 5pm local time on Tuesday 31 October, to DKK 252.5 at 5pm GMT today (1 November).  

The confirmation of net losses at Ørsted and the market’s subsequent reaction followed the company’s announcement on Tuesday evening that it was cancelling two offshore wind projects in New Jersey — 1.1GW Ocean Wind 1 and 1.15GW Ocean Wind 2  — citing spiralling costs, supply chain issues and project delays. 

Phil Murphy, governor of New Jersey, described Ørsted’s decision to abandon the two wind farm projects as “outrageous” and vowed his administration would review legal options in response. 

On Wednesday, the company confirmed a net loss of DKK 22.5 billion (€3 billion) in the third quarter of 2023, compared to profits of DKK 9.3 in the same period one year ago. 

The Danish renewables major meanwhile recorded DKK 28.4 billion of impairment losses in the third quarter of 2023 – most of which (DKK 19.9 billion) was tied to its Ocean Wind 1 project.

Ørsted recorded operating profit (Ebitda) of DKK 9.2 billion in the third quarter of 2023, down 26% from the same period one year ago.

Competence questioned

Ørsted’s announcement cancelling the Ocean Wind 1 and 2 projects prompted governor Murphy to raise questions about the company’s credibility. 

“Today’s decision by Ørsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence. As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project,” Murphy said. 

He added that his administration would review “all legal rights and remedies” to address the situation. He added that his administration would review legal options to ensure Ørsted “fully and immediately honours its obligations”.  

Murphy meanwhile offered a defence of offshore wind’s role in the state’s energy transition while pointing out the issues offshore wind projects in neighbouring states had faced which, he said, were “impacted by a combination of interest rate escalation, supply chain cost increases, and inflation”. 

“While today is a setback, the future of offshore wind in New Jersey remains strong,” Murphy said.