DELAWARE - Orsted had net profits of -20.2 billion Danish Krone, which is equal to losses of $2.9 billion, for the 2023 fiscal year according to its annual report. The company's board of directors said Wednesday that they have decided to pause dividend payments for the financial years 2023 through 2025.
"Despite strong underlying business progress, 2023 marked a year with substantial challenges for Orsted as its U.S. offshore projects caused significant impairments and additional costs for terminating contracts, leading to a negative impact on Orsted's credit metric projections," the company said in Wednesday's statement.
In November 2023, Orsted ceased the development of offshore wind projects Ocean Wind 1 and Ocean Wind 2 near New Jersey. Just last month the company broke ties with Maryland and decided to reposition the Skipjack Wind project, which was originally planned off local Delaware and Maryland coasts. In Wednesday's capital markets update, Orsted said it will primarily focus its U.S. offshore portfolio towards the northeast Atlantic. It is also exiting several international projects in Norway, Spain and Portugal.
Despite a hard year, Orsted's gross profit for offshore sites more than doubled in 2023, according to the company. It cited a ramp-up of generation at its North Sea Hornsea 2 project and the Changhua 1 and 2 projects near Taiwan. This was, however, before operating expenses were factored in.
Orsted has set a target to reduce fixed costs by 1 billion Danish Krone, or $144.4 million, by 2026 in comparison to 2023. To do this, the company will cut between 600 to 800 positions globally. Orsted has also reduced its renewable capacity ambitions from approximately 50 gigawatts to between 35 to 38 gigawatts by 2030, which it says will still be more than double its current installed capacity.
"We've revisited our portfolio to prioritize growth options with the highest potential for value creation and at the same time reduce risks in the development and execution of our projects," said Mads Nipper, group president and CEO of Orsted. "We remain optimistic about the future of the renewable energy industry, and we're confident we can be a key contributor in accelerating the renewable build-out in the years to come."