Ørsted said on Wednesday it would “pause” dividends for 2023-2025, cut as many 800 jobs and retreat from markets in Norway, Spain and Portugal.
Chief executive Mads Nipper is battling to restore investor confidence after an overly aggressive expansion in US market and higher interest rates left the Danish group facing multibillion dollar impairments.
The measures announced on Wednesday are designed to make Ørsted a “leaner and more efficient company”, Nipper said.
As the group, which is 50.1 per cent owned by the Danish government, tries to stabilise itself, chair Thomas Thune Andersen will step down after almost a decade in the job. Andersen’s exit comes after former finance chief Daniel Lerup and chief operating officer Richard Hunter left in November.
Ørsted’s struggle reflects the pressures facing the wider industry, which investors had championed until higher interest rates, overly ambitious expansion plans and supply chain disruption hit the sector over the past two years.
However, Ørsted has been particularly exposed in part because of its large presence in the still embryonic US market, where it has struggled to get tax credits and complained of onerous requirements for parts to be made locally.
In further steps announced on Wednesday, Ørsted cut its target for renewable energy capacity by 2030, from 50 gigawatts to 35GW-38GW.
Speaking to reporters, Nipper said the company had “felt the impact of market challenges over the past few years” but had “learned from these challenges and implemented significant changes”.
Analysts at RBC said on Wednesday that the company “now needs to execute on various components of its plan”.
Shares in Ørsted, which have tumbled more than 70 per cent from a record high hit in 2021, slipped almost 2 per cent in early trading on Wednesday.
(Financial Times, February 7, 2024)