Ørsted’s Revised EBITDA Outlook: Assessing the Impact of Wind Speed Variability and Project Delays

The offshore wind sector, once a poster child for renewable energy growth, now faces headwinds that have forced even its most seasoned players to recalibrate. Ørsted, the Danish energy giant and a global leader in offshore wind, has revised its 2025 EBITDA outlook amid a confluence of operational and financial challenges. While the company reported robust Q1 2025 EBITDA of DKK 8.6 billion ($1.31 billion)—surpassing market expectations—its full-year guidance has been tempered by wind speed variability, project delays, and regulatory uncertainties. This analysis examines how Ørsted is navigating these headwinds through strategic resilience measures and capital structure adaptations, offering insights for investors assessing the company’s long-term viability.

The Dual Threat: Wind Variability and Project Delays

Ørsted’s revised EBITDA outlook reflects the dual pressures of natural and operational volatility. Wind speed variability, a persistent challenge in offshore wind, has forced the company to downgrade its directional guidance from “higher” to “neutral” for 2025 [2]. This shift underscores the sector’s inherent exposure to climatic factors, which can erode revenue predictability. Compounding this issue are project-specific delays, particularly in high-exposure markets like the U.S. and U.K.

For instance, the Greater Changhua 2b project in Taiwan—a key asset for Ørsted’s 2025 earnings—has been delayed by DKK 0.3 billion due to a damaged export cable. Originally slated for commissioning in late 2025, the project is now expected to come online in Q3 2026, directly reducing ramp-up generation revenue in 2025 [1]. Similarly, U.S. projects like Sunrise Wind off Long Island have faced permitting bottlenecks and cost overruns, culminating in a $1.7 billion impairment in 2024 [3]. These setbacks highlight the fragility of offshore wind’s capital-intensive model in the face of supply chain constraints and regulatory headwinds.

Strategic Resilience: Cost Cuts, Divestments, and Portfolio Refinement

To counteract these challenges, Ørsted has embarked on a multi-pronged strategy to stabilize its capital structure and prioritize high-conviction projects. Central to this effort is a DKK 35 billion reduction in capital expenditure (CAPEX) from 2024 to 2026, achieved through the cancellation or deferral of non-core projects [4]. The company has also paused dividends for 2023–2025, redirecting capital to strengthen its balance sheet [5].

A critical component of this strategy is the acceleration of divestments. By 2030, Ørsted aims to generate DKK 115 billion in proceeds from asset sales, with DKK 70–80 billion expected between 2024 and 2026 [5]. These funds, combined with operating cash flow and partnerships, will fully finance its DKK 270 billion investment plan for 2024–2030. This approach not only de-risks the portfolio but also aligns with a broader industry trend of prioritizing liquidity over aggressive expansion.

Fixed cost reductions further underscore Ørsted’s resilience. The company plans to cut DKK 1 billion in fixed costs by 2026, including workforce reductions of 600–800 positions globally [5]. While such measures may raise concerns about operational flexibility, they reflect a pragmatic response to a sector grappling with margin compression.

Capital Structure Adaptations: Debt Management and Strategic Partnerships

Ørsted’s capital structure adaptations extend beyond cost-cutting. The company has leveraged partnerships to mitigate project-specific risks. For example, Equinor’s 2024 acquisition of a 9.8% stake in Ørsted for $2.5 billion signaled confidence in its offshore wind expertise and provided a liquidity boost [6]. Similarly, collaborations with firms like Ekwil on the Firefly/Bandibuli project in South Korea highlight Ørsted’s focus on leveraging specialized technology to manage supply chain bottlenecks [6].

Debt management has also been pivotal. By extending maturities and optimizing hybrid financing, Ørsted has maintained a robust credit profile despite impairments. As of Q1 2025, the company’s net debt-to-EBITDA ratio remains within investment-grade thresholds, a testament to its disciplined approach [3].

The Road Ahead: Balancing Risks and Opportunities

While Ørsted’s strategic adjustments have stabilized its near-term outlook, long-term success hinges on its ability to navigate sector-wide challenges. Wind variability, for instance, remains a wildcard; even with advanced forecasting tools, output fluctuations will continue to pressure EBITDA. Meanwhile, regulatory uncertainties in the U.S. and U.K. could delay critical projects, necessitating further impairments or pivots.

However, the company’s focus on high-value markets—such as Poland’s Bałtyk 2 and 3 projects, which secured €6 billion in financing—demonstrates a shift toward de-risked assets [6]. If executed effectively, this strategy could position Ørsted to outperform peers as the sector matures.

Conclusion

Ørsted’s revised EBITDA outlook is a microcosm of the offshore wind sector’s broader struggles with volatility and execution risks. Yet, the company’s strategic resilience—through CAPEX cuts, cost reductions, and capital structure refinements—provides a blueprint for navigating these challenges. For investors, the key question is whether these measures will be sufficient to sustain EBITDA growth amid persistent headwinds. While the path is uncertain, Ørsted’s disciplined approach suggests a commitment to long-term value creation, even as it grapples with the realities of a maturing renewable energy landscape.

Source:
[1] Ørsted provides preview of main points at today's extraordinary general meeting and adjusts full-year EBITDA guidance for 2025 [https://www.marketscreener.com/news/orsted-provides-preview-of-main-points-at-todaya-s-extraordinary-general-meeting-and-adjusts-full-y-ce7d59d8d18cfe2c]
[2] Orsted [https://www.dbs.com.sg/treasures/aics/templatedata/article/generic/data/en/GR/EU/ORSTED_DC.xml]
[3] Ørsted's Q1 2025 Earnings Surpass Forecasts Despite $1.7B [https://www.openpr.com/news/4006363/rsted-s-q1-2025-earnings-surpass-forecasts-despite-1-7b]
[4] Capital Markets Update: Ørsted presents updated business plan for 2024-2030 [https://orsted.com/en/company-announcement-list/2024/02/capital-markets-update--oersted-presents-updated-b-82051]
[5] Ørsted presents updated business plan for 2024-2030 [https://www.windtech-international.com/company-news/orsted-presents-updated-business-plan-for-2024-2030]
[6] Equinor Offshore Wind Initiatives for 2025: Key Projects, Strategies and Partnerships [https://enkiai.com/equinor-offshore-wind-initiatives-for-2025-key-projects-strategies-and-partnerships]