Orsted Shakes Up Management Team as Challenges Buffet Wind Industry — Update

By Dominic Chopping

Orsted's chief financial officer and chief operating officer are leaving the company as it reshuffles its management to contend with increasingly challenging conditions buffeting the wind industry.

The Danish wind power developer has been struggling with surging costs at some of its offshore development projects as supplier delays, higher funding costs, and insufficient government subsidies have seen some projects become unfeasible.

It booked a 28.4 billion Danish kroner ($4.07 billion) impairment charge in the third quarter related to its U.S. offshore wind portfolio and said it will stop development of two wind farm projects off the coast of New Jersey. On Monday it pulled out of a consortium that was formed to bid on offshore Norwegian wind projects as it prioritizes investments elsewhere.

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

"Therefore, the board of directors and I have agreed with our current CFO and COO that we need new and different capabilities to lead the finance and engineering, procurement and construction & operations functions to strengthen Orsted's journey into the future."

Chief Financial Officer Daniel Lerup and Chief Operating Officer Richard Hunter are stepping down with immediate effect and the company has started the process of identifying their replacements. It expects the process to be concluded as soon as possible in 2024.

Rasmus Errboe, currently CEO of Orsted's Europe division, will serve as interim CFO. He has been with the company since 2012 in various management positions, including as CFO for the company's offshore wind business, and he will lead work in supporting the company's capital structure and long-term commitment to its credit rating.

Fitch recently cut the outlook on Orsted to negative from stable while S&P placed the company on credit-watch negative. Moody's downgraded the outlook to negative from stable in September.

Andrew Brown, who serves as a member of Orsted's board of directors, has been appointed interim COO. He will focus on managing the delivery of engineering, procurement and construction projects while advancing and implementing a strengthened project management and supply chain strategy, it said. He is expected to remain in the position until March 1.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

November 14, 2023 03:31 ET (08:31 GMT)

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