(Bloomberg) — Mads Nipper will step down as chief executive officer of Danish wind developer Orsted A/S after a series of huge writedowns over the past few years on both sides of the Atlantic and a steep slump in the share price.
He will be replaced by his deputy Rasmus Errboe on Saturday, the company said in a statement. Nipper led the offshore wind giant for four years, but struggled to improve its financial performance after setbacks and surging costs at several of its biggest projects.
Orsted shares have slumped about 80% during Nipper’s tenure from the peak in early 2021. They traded little changed in Copenhagen on Friday and are down about 18% this year.
The most recent writedown, a $1.7 billion hit in the US earlier this month, put Nipper’s leadership at risk. Future growth in the nation is also in doubt after President Donald Trump moved to stop federal permitting and leasing areas for new offshore wind projects.
“The impacts on our business of the increasingly challenging situation in the offshore wind industry, ranging from supply chain bottlenecks, interest rate increases, to a changing regulatory landscape, mean that our focus has shifted,” said Lene Skole, chair of Orsted’s board of directors.
The firm has become symbolic of the promise and risks of offshore wind. The company constructed the world’s first offshore wind farm in Denmark in the early 1990s and has since built up a portfolio of projects around the world.
The technology had benefited for years from decreasing costs from its supply chain and rock-bottom interest rates. But disruptions caused by the Covid-19 pandemic and rising interest rates hit offshore wind developers with soaring project costs.
The firm will publish its 2024 results on Feb. 6.
“The company continues to experience material challenges in its US operations and it will be interesting to get the thoughts of the new CEO at year-end results,” analysts at RBC Europe Ltd. said in a note.
Errboe has been at the company since 2012 and was responsible for the listing of Orsted in 2016 and the divestment and carve-out of Orsted’s Oil & Gas business in 2017. A key question will be whether he can bring new ideas about how to improve the company’s performance.
“We expect Mr Errboe could launch a strategic review of the group businesses,” said Jenny Ping, an analyst at Citigroup Inc. “If Orsted is able to address its stretched balance sheet, without having to sell more of its highly prized assets, we see potential for a more structural re-rating of the shares.”
–With assistance from Lars Paulsson.
(Adds details in tenth paragraph.)
More stories like this are available on bloomberg.com