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Orsted's finance and operations chiefs out after big losses

Published Nov 14, 2023 07:18 Updated Nov 14, 2023 15:31
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© Reuters. FILE PHOTO: The logo for Orsted can be seen on the jacket worn by an employee as he talks to journalists during a visit to the offshore wind farm near Nysted, Denmark, September 4, 2023. REUTERS/Tom Little/File Photo
 
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HELSINKI (Reuters) -Denmark's Orsted said on Tuesday its finance and operations chiefs were stepping down with immediate effect after the offshore wind farm developer earlier this month reported large financial losses due to delays with U.S. projects.

The offshore wind industry has found itself in a perfect storm of rising inflation, interest rate hikes and delays in the supply chain struggling to cope with growing demand.

"Orsted, along with the rest of the industry, is experiencing a challenging and volatile business environment," CEO Mads Nipper said in a statement.

"The board of directors and I have agreed with our current CFO and COO that we need new and different capabilities," he said.

The search for successors to Chief Financial Officer (CFO) Daniel Lerup and Chief Operating Officer (COO) Richard Hunter will begin immediately, Orsted said.

CEO Nipper has remained in place and has the full confidence of the company's board, Chairman Thomas Thune Andersen told Danish business daily Borsen.

Orsted, the world's largest offshore wind developer, on Nov. 1 scrapped two U.S. offshore wind projects, flagging $5.6 billion in related impairments after delays, partly due to vessel availability, meant costs soared.

At the time of cancelling the projects, Nipper said the company had invested a significant amount in the most advanced project, Ocean Wind 1, and this had been the wrong decision.

Rasmus Errboe, who has been with Orsted since 2012 and runs the company's European operation, will serve as interim CFO.

Board member Andrew Brown, who has executive experience from Shell (LON:RDSa) and Portugal's Galp, was appointed interim COO, Orsted said.

The company's financial guidance and expected level of investment for 2023 is unchanged, it added.

Orsted shares were up around 6% by 1518 GMT. The stock has fallen around 50% since the company first flagged expected impairments on its U.S. operations at the end of August.

Separately on Tuesday, German utility RWE (LON:0HA0) announced an 82% jump in profits for the first nine months of the year on strong performance at its commodity trading business and from its gas-fired power plants.

The company said contracts it had signed for its U.S. offshore wind projects were secured recently and were therefore more reflective of current costs.

($1 = 6.8904 Danish crowns)

Orsted's finance and operations chiefs out after big losses
 

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