Bad news from the US sent energy company Ørsted into a huge decline on the stock exchange on Wednesday. In total, almost a quarter of the value of Ørsted shares was shaved off. More precisely, the value of the share fell by 24.8 percent to DKK 420.90. This is clear after the stock exchange closed at 5 p.m. on Wednesday. According to the business media MarketWire, this is the company's biggest price drop ever, with over DKK 58 billion in lost market value.
The decline comes after Ørsted decided late Tuesday evening to write down the value of three American offshore wind projects by DKK 5 billion. The reason is delays and higher material prices. Head of equity research at Sydbank Jacob Pedersen explains that the market shock is because "most people had the feeling" that the business "was doing really well".
- It comes as a huge surprise that some projects can hurt so much and lead to such large write-downs, says Pedersen.
Part of the reason for the price drop is that the company is keeping the door open for further write-downs. These could come, among other things, if negotiations on a US tax rebate do not go as expected and if interest rates do not start to fall again soon. The total write-downs could end up at 16 billion kr.
Lead to market turmoil
The Ørsted downturn helped create a generally bad day on the stock exchange. The C25 index fell by 2.4 percent overall, and it also caused unrest at wind turbine manufacturer Vestas, with a drop of 5.3 percent.
- It's a really, really, really bad day for the entire world's offshore wind industry when the largest offshore wind project developer in the form of Ørsted has skeletons spilling out of the closet like this, says Jacob Pedersen.
He expects that there may also be bad news from Ørsted's competitors. In general, he believes that the political system may need a "recalibration", as offshore wind could become more expensive than expected.
- It could be a problem for the green transition if we believe that it can be done as cheaply as we thought two years ago, says the head of equity research.
- Wind turbines have increased in price, and interest rates are significantly higher, so it is therefore more expensive to build wind energy, he continues.
Ørsted, which has the Danish state as the majority owner, works in various areas. In addition to the company developing, building and operating offshore and onshore wind farms, Ørsted supplies energy products to its customers.
/ritzau/
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