Orsted A/S (CPH:ORSTED) will pause dividend payments until at least 2025 and trimmed plans to build new green power projects this decade as chief executive officer Mads Nipper tries to haul the company back from huge writedowns on unfulfilled projects.
The Danish wind-power giant will cut its target for its green power build out to a goal of 35 to 38 gigawatts by 2030, down from a previous target of 50 gigawatts, according to a statement Wednesday. That will help it limit capital expenditure as the company also ramps up asset sales.
Orsted needs to cut costs and recover from a 28.4 billion Danish kroner ($4.1 billion) hit last year as costs spiraled for its portfolio of wind farms planned off the coast of the US. The firm took the decision to cancel development of two of those projects and dismissed two top executives as part of an effort to put the company back on stable footing. Nipper is under pressure to show that the worst is over and the company has a credible plan to get back on track.
Orsted’s stock slumped over 40% last year and is trading at less than a third of its value at the peak in early 2021. The company said it doesn’t expect to need to raise new equity.
Nipper will outline more details of the plans for investors at an event Wednesday afternoon.
Cost Cutting:
- Orsted is exiting Norway, Spain, and Portugal and deprioritizing development activities in Japan
- Will focus its US offshore portfolio towards the North-East Atlantic
- Farm-downs and divestments expected to contribute DKK 115 billion by 2030, of which approx. DKK 70-80 billion are expected in 2024-2026
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