S&P downgraded Danish wind energy large Orsted to BBB on Wednesday, citing greater leverage on its steadiness sheet and main U.S. impairments in 2023 resulting from provide chain delays and better prices.
S&P mentioned Orsted’s enterprise danger profile has weakened from final 12 months, however was nonetheless passable. It expects the world’s largest offshore wind farm developer would be capable of efficiently handle the substantial trade dangers it faces.
The offshore wind trade has been fighting rising inflation, rate of interest hikes and provide chain delays, which have endangered plans by U.S. President Joe Biden and a number of other states to switch fossil fuels with offshore wind to combat local weather change.
The scores company maintained a steady outlook on Orsted, saying it anticipated enhancements within the firm’s adjusted funds from operations (FFO) to debt and EBITDA over 2025.
Orsted mentioned in an emailed assertion the downgrade wouldn’t have any implications on its enterprise plans or its related funding technique.
Earlier on Wednesday, the corporate trimmed its funding and capability targets, in addition to paused dividend payouts as a part of a significant evaluation.
S&P mentioned it expects these strikes to revive credit score metrics for the agency over 2024 and 2025.
Orsted has been battling to revive investor confidence after halting the event of two U.S. offshore wind tasks in November final 12 months, with associated impairments surging above $5 billion.
(Reuters – Reporting by Kanjyik Ghosh and Angela Christy in Bengaluru; Editing by Shinjini Ganguli)
