Ørsted shares down on impairment charges by Investing.com

Investing.com — Shares of Ørsted (CSE: ) fell on Thursday following its earnings report, which showed significant write-downs and delays in several key projects.

At 4:46 am (0846 GMT), Ørsted was trading 7.8 percent lower at DKK 389.60.

Although the company reported stronger-than-expected EBITDA for the second quarter of 2024, the impact of these financial setbacks was a major concern for investors.

In Q2 2024, Ørsted achieved EBITDA of DKK 6.6 billion, beating both the UBS estimate of DKK 4.5 billion and the company’s own estimate of DKK 5.4 billion.

This was largely driven by a better-than-expected result in the offshore wind segment, which saw a notable decline in EBITDA of DKK 0.5 billion against the consensus estimate of DKK 4.4 billion.

However, the positive financial performance was overshadowed by the announcement of substantial impairments totaling DKK 3.9 billion ($580 million) in the quarter.

These impairments resulted from a number of issues, including the termination of a green hydrogen project in Sweden, delays in the US Revolution Wind project and adjustments to the fair value of the Ocean Wind offshore areas.

“Smal Negative on the basis that there are new deficiencies. But we recognize that the quality of EBITDA (more EBITDA in offshore operating assets with many multiples) is better than expected and capex reductions are positive,” analysts at UBS Global Research said in a note.

“We do not expect Ørsted to pay a dividend until 2027 (vs. 2026), with a dividend yield of c3.5% at that time. We would not rule out a successful farm cut that would bring payments forward,” the analysts added.

Specifically, Ørsted recorded an impairment of DKK 1.5 billion due to the shutdown of its fuels project, an impairment of DKK 2.1 billion related to land station delays for the Revolution Wind project, and an impairment of DKK 0.6 billion from – an assessment of the revised fair value of Ocean Wind maritime zones.

IØrsted adjusted its gross investment forecast for 2024 to a range of DKK 44-48 billion, down from the previous range of DKK 48-52 billion. This adjustment reflects changes in the timing of spending rather than a fundamental change in the company’s growth strategy.

The company reiterated its full-year EBITDA guidance of DKK 23-26 billion, which is in line with the midpoint of its forecast of DKK 24.3 billion.