Ørsted is taking proactive measures to fortify its balance sheet, ensuring its resilience and supporting long-term growth and capital structure objectives through 2030
Ørsted’s Board of Directors has given the green light to a business plan aimed at achieving 35-38 GW of installed capacity by 2030, along with revised financial objectives. This decision comes after a thorough review of the company’s portfolio. The newly announced targets reaffirm Ørsted’s position as a key player in the offshore wind industry, demonstrating its commitment to delivering robust growth and returns despite the hurdles faced in 2023.
Despite making significant strides in its underlying business, Ørsted encountered notable challenges in 2023, particularly stemming from its US offshore projects. These challenges resulted in considerable impairments and additional costs related to contract terminations, ultimately impacting Ørsted’s credit metrics and FFO/adjusted net debt projections negatively.
In response, Ørsted is taking proactive measures to fortify its balance sheet, ensuring its resilience and supporting long-term growth and capital structure objectives through 2030. Drawing from the insights gained from the US offshore projects. Ørsted has conducted a thorough review of its project portfolio and has initiated actions to mitigate risks going forward.
Ørsted’s strategic focus on technologies and regions remains steadfast, with a commitment to maintaining its position as the global leader in offshore wind while expanding its presence as a regional player in onshore and P2X sectors in Europe and the US. However, Ørsted has undertaken a thorough portfolio reassessment to prioritise growth opportunities with the highest potential for value creation and lower associated risks.
Ørsted Group president and CEO Mads Nipper said: “We have prioritised projects within our portfolio and are implementing significant changes in our business, including revising our operating model to reduce risks.
“We now present a robust business plan, and with an uncompromising focus on value creation, we plan to more than double our current installed capacity of renewable energy by 2030.”
Drawing from the experiences gained from its US offshore projects, Ørsted is integrating key learnings into its operational framework to enhance risk mitigation throughout project development and execution. This includes a heightened emphasis on contingency planning rigorous supplier monitoring, measures to address inflation impacts, careful evaluation of pre-FID commitments, increased flexibility in project timelines and commissioning dates, and enhanced project governance and review processes. These initiatives aim to bolster Ørsted’s resilience and ensure the successful implementation of future ventures.
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