Stop the green illusion: Ørsted cuts profits, lays off workers and withdraws from offshore wind
Ørsted has suspended its dividend and cut renewable energy development targets, while the world's largest offshore wind developer plans a recovery after a disastrous 12 months. The Copenhagen-listed company said on Wednesday it would cut up to 800 jobs and withdraw from offshore wind markets in Norway, Spain and Portugal, marking a retreat after several years of aggressive expansion, the FT reported.
Chief Executive Mads Nipper said the moves were necessary to turn Ørsted into a “leaner and more efficient company” after soaring interest rates and challenges in the United States caused it to write down multibillion-dollar writedowns.
The reduction of the 2030 installed renewable electricity capacity target from 50 gigawatts to 35-38 gigawatts comes as economies around the world have increased their clean energy targets to meet emissions targets. Each gigawatt of capacity can potentially power approximately 1 million homes.
Nipper said he remains confident in the global transition to renewable energy, arguing that the company needs a "reset" to restore investor confidence. “We are very confident that we can create value and that we can execute the plan in a solid way,” he said. “This is not only what our investors need, but also what the green transformation needs: a green energy industry in good shape.”
As the group, which is 50.1% owned by the Danish government, seeks to stabilize, chairman Thomas Thune Andersen will step down after nearly a decade in the job.
His exit comes after former chief financial officer Daniel Lerup and chief operating officer Richard Hunter left the company in November. The company employs approximately 9,000 people worldwide.
Once a stock market darling and an example of an oil and gas company successfully transitioning to renewable energy, Ørsted's share price has fallen more than 70% since peaking in 2021, at the height of the frenzy of investors for green stocks.
Ørsted pays for having wanted to rely too much on public contributions for the realization of its projects, especially in North America, and therefore for having grown so much, too much, in debt, thus exposing itself to the first gust of inflation and the first increase in interest.
Unfortunately, being "Ambitious" brings very, very bad things. Even if it is less poetic and less "Gretinous", the world will perhaps be imagined by dreamers, but then it must be created by realists who have their feet on the ground and grow within the limits of their possibilities. Ørsted has grown too fast and now it, with its shareholders, is paying the price.
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The article Stop the green illusion: Ørsted cuts profits, lays off and withdraws from offshore wind comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/stop-allillusione-green-orsted-tagli-gli-utili-licenzia-e-si-ritira-dalleolico-offshore/ on Wed, 07 Feb 2024 19:42:56 +0000.