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Orsted cuts profit outlook, secures backing for $9bn rights issue
(Sharecast News) - Denmark's Orsted secured backing for an emergency $9bn rights issue on Friday, while at the same time cutting its full-year profit guidance. The embattled offshore wind developer is currently facing a number of industry-wide challenges alongside US president Donald Trump's outspoken criticism of the sector. Shares in the state-controlled business have lost 41% so far this year.
Updating investors on Friday, however, it confirmed that wind speeds in July and August had been lower than expected, while its Greater Changhua 2b project off Taiwan had been delayed by damaged export cable.
As a result, Orsted has cut its full-year guidance for earnings before interest, tax, depreciation and amortisation to between DKr24bn and DKr27bn.
It had previously forecast annual EBITDA of between DKr25bn and DKr28bn.
The firm also confirmed on Friday that it received approval from shareholders for a DKr60bn ($9.4bn) rights issue.
According to Reuters, chair Lene Skole, told shareholders at the emergency meeting in Copenhagen: "[The rights issue] gives us a strong financial foundation, that is necessary to delivery on our business plan, manage the uncertainty in the US and ensure that we can contribute to the development of offshore wind in Europe.
"It's going to be a long, tough journey to re-erect Orsted."
Initially an oil producer, Orsted transformed itself into the world's largest offshore wind developer.
However, in recent years the once-booming sector has been hit by supply chain issues, higher interest rates and project delays.
Trump is also bitterly opposed to wind power, and both of Orsted's US projects - Sunrise Wine and Revolution Wind - have been hit as a result. Orsted confirmed earlier this week that it had started legal action after the US government halted work on the $1.5bn Revolution project last month.
Revolution, which is around 80% complete, was intended to power around 350,000 homes in the north east of the US.
The majority of the capital raised via the rights issue will be invested in Sunrise Wind.
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