Ørsted (ORSTED DC) Hold: Green, but no end to risk [Correction]

Research evidence excerpt

14 May 2025

Ørsted (ORSTED DC)

Equities

Multi-Utilities

Hold: Green, but no end to risk [Correction]

Denmark

◆ Solid 1Q25 results, yet impairments for Hornsea 4 (H4) and

MAINTAIN HOLD

low wind resources expected to weigh down FY 2025 results

◆ Prioritising returns for new projects is a positive, but US

policy risk looms and need to reconfigure H4 is disappointing

◆ On cancellation costs and continued risks, we lower our TP

to DKK275.00 (from DKK320.00); maintain Hold

TARGET PRICE (DKK)

PREVIOUS TARGET (DKK)

275.00

320.00

SHARE PRICE (DKK)

UPSIDE/DOWNSIDE

260.00

+5.8%

(as of 12 May 2025)

MARKET DATA

Green, but no end to risks yet: Orsted is taking a further cut to its 2024-30

development ambitions with the reconfiguration of Hornsea 4. We believe this is

another step in the right direction, but we continue to think uncertainty remains high

on under construction projects due to policy risk in the US or new market risk in

Poland, funding via farm-downs, attractiveness of next in-line large projects, such as

Baltica 3, as well as Orsted’s long-term 2030+ ability to create profitable growth. We

think Orsted must rebuild trust via detailed communication as well as execution.

1Q25 results review: Orsted reported solid 1Q25 Group EBITDA and reiterated

2025 EBITDA excl. new partnerships guidance. However, wind earnings were slightly

lower than previously guided and DKK3.0-3.5bn of estimated breakaway cost of

Horsea 4 is not included in this 2025 guidance. Q&A focus was on the cancellation of

Horsea 4 in its current form and risk to US projects – management cited higher rates,

higher supply chain prices, as well as higher hurdle rates as drivers for H4

cancellation and expects breakaway cost of up to DKK3.0-3.5bn. We expect Orsted

to reconfigure H4 for COD in 2030+. Further questions in the Q&A session explored

cancellation and policy risks for Orsted’s US offshore projects.

We update our model after 1Q25 results and lower our TP to DKK275.00: We

lower our 2025-30 EBITDA estimates by 3% on average due to project cancellations

and fees. Net income estimate changes vary by year on farm-down timings, and on

…