Ørsted cuts jobs, exits markets and pauses divi after challenging year

Danish energy giant Ørsted on Wednesday announced job cuts, a dividend suspension and the exit of several offshore markets after it swung to a net loss of more than DKK 20bn (£2.3bn) in 2023.

Ørsted, which is the world's largest offshore wind developer, faced "substantial challenges" last year, according to group chief executive and president Mads Nipper.

"Our financial results are adversely affected by the impairments we took on our US offshore projects in the third quarter of 2023 and the provision for cancellation fees related to ceasing the development of the offshore project Ocean Wind 1," Nipper said.

The company was forced to take a hit of DKK 9.6bn in cancellation fees related to its decision to cease the development of Ocean Wind 1, as well as DKK 19.9bn in impairment losses, resulting in a net loss of DKK 20.2bn, compared with a profit of DKK 15.0bn in 2022.

Nevertheless, adjusted EBITDA amounted to DKK 24.0bn in 2023, above company guidance of DKK 20-23bn.

In response, Ørsted has unveiled a new business plan, through which is aims to hit 35-38 GW installed renewable capacity by 2030, more than double the current installed capacity of 15.7 GW but lower than previous guidance of 50 GW.

"We’ve revisited our portfolio to prioritise growth options with the highest potential for value creation and at the same time reduce risks in the development and execution of our projects," Nipper said.

As part of the review, 600-800 positions will be cut globally, resulting in 250 people being made redundant in the coming months, to make "leaner and more efficient company", according to Nipper.

Ørsted also decided to pause dividends for 2023, 2024, and 2025, and said it was exiting several offshore markets (including Norway, Spain, and Portugal), deprioritising development activities in Japan, and planning for a leaner development within floating offshore wind and P2X.

The stock was down 0.5% DKK383.60 by 1224 in Copenhagen.