Ørsted to raise DKK 60 billion after Sunrise Wind sale collapses; H1 profit surges

Ørsted (ORSTED) announced a DKK 60 billion fully underwritten rights issue, driven by its decision to abandon the partial sale of the Sunrise Wind project due to adverse market conditions and instead fund full ownership. The capital raise, backed by the Danish state and Morgan Stanley, will cover project costs and provide financial flexibility, complementing plans for DKK 35 billion in asset divestments by 2026. Despite this significant capital restructuring, the company reported a robust first-half with adjusted EBITDA up 9% and profit soaring to DKK 8.2 billion, while reaffirming its 2025 guidance and setting ambitious medium-term targets, including dividend reinstatement for FY2026.

Analysis

Ørsted has announced a significant strategic pivot, opting for a fully underwritten DKK 60 billion rights issue to secure full ownership of its Sunrise Wind project, a move necessitated by adverse market conditions that derailed a planned partial sale. This capital raise, supported by its majority shareholder, the Danish state, and underwritten by Morgan Stanley, is designed to cover an additional DKK 40 billion in project costs and provide greater financial flexibility. This major balance sheet event occurs alongside robust first-half operational results, where adjusted EBITDA increased 9% to DKK 13.9 billion on the back of an 11% revenue rise to DKK 37.8 billion. The growth was driven by higher offshore generation, new capacity additions, and favorable energy prices. Despite a DKK 2.9 billion negative EBITDA impact from Hornsea 4 cancellation fees, net profit surged to DKK 8.2 billion from DKK 0.9 billion in the prior year. Management has reaffirmed its 2025 guidance and outlined ambitious medium-term targets, including investments of DKK 145 billion from 2025-2027, an average ROCE of about 11%, and the reinstatement of dividends for the 2026 financial year, signaling confidence in its long-term strategy.

Key Decisions for Investors

• Investors should weigh the significant near-term shareholder dilution from the DKK 60 billion rights issue against the company's strong underlying H1 performance and reaffirmed 2025 guidance.
• Monitor management's execution on deploying capital into the Sunrise Wind project and its ability to achieve its medium-term targets, particularly the ~11% return on capital employed and the planned DKK 35 billion in asset divestments by 2026.
• The planned reinstatement of dividends for the 2026 financial year provides a long-term catalyst, but its feasibility is contingent on successful project execution and the stabilization of the company's balance sheet post-restructuring.