(Bloomberg) -- Orsted A/S shares touched the highest since August last year — when the Danish wind giant warned of a $2.3 billion hit to its US portfolio — highlighting how the company is recovering from the crisis.
The stock is up about 20% this year, marking a turnaround for the company after project writedowns and cancellations slashed its market value. The rebound has brought some relief for Chief Executive Officer Mads Nipper, who took over at the height of the green-investing bubble and was thrust into the role of managing a turnaround.
The shares on Monday hit the highest since Orsted warned of the big impairments more than a year ago. While the stock has jumped about 80% since the worst of the company’s crisis last year, it’s still down by two-thirds from a peak set in early 2021.
“Things aren’t as bad as people thought,” said Deepa Venkateswaran, a Bernstein analyst who has an overweight rating on Orsted. “Compared to the sentiment last year, investors haven’t completely regained trust, but they’re on the way to rebuilding that slowly. People aren’t as angry.”
Orsted’s troubles last year became emblematic of the beleaguered offshore wind sector that’s crucial to tackling climate change. The industry faced higher interest rates and supply chain snarls, particularly in the US. Orsted wrote down two major projects in the US in August and then canceled the wind farms later that year, further hurting the company’s market value.
The challenges prompted investors to view Orsted as worth less than the sum of its wind farms. Nipper responded by unveiling a turnaround plan in February that axed the company’s dividend, laid off staff and cut its plans to grow this decade. Since then, shareholder confidence in the company has improved, while Orsted was also the big winner at a UK offshore wind auction earlier this year.
At the same time, slowing inflation and central banks’ moves to start lowering interest rates should help Orsted cut the cost of financing new projects and draw long-term investments.
The shares rose as much as 0.7% on Monday, before edging down.
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