Orsted replaces CEO as offshore wind industry struggles
By Stine Jacobsen and Isabelle Yr Carlsson
COPENHAGEN (Reuters) - Orsted Chief Executive Mads Nipper will step down to be replaced by company insider Rasmus Errboe, the world's biggest offshore wind developer said on Friday, as it seeks to arrest an 83% slump in its share price since its 2021 peak.
The Danish renewables firm has been crucial to establishing a European industry for wind at sea, but the industry has struggled in recent years with rising costs, supply chain bottlenecks, higher interest rates, and regulatory changes.
Its push into the nascent U.S. market has also proved challenging, resulting in delays and impairment charges, and has been complicated by U.S. President Donald Trump's outspoken opposition to wind power. Trump has suspended federal offshore wind leasing pending an environmental and economic review.
Nipper, who took the helm in January 2021, faced questions over his stewardship as losses mounted and the share price fell.
"The impacts on our business of the increasingly challenging situation in the offshore wind industry ... mean that our focus has shifted," Orsted Chair Lene Skole said in a statement, without elaborating.
"Therefore, the board has today agreed with Mads Nipper that it's the right time for him to step down."
The former oil and gas company's woes reflect the changing fortunes of wind power globally as soaring costs, delays and limited supply chain investment prompt investors to reassess the speed of the energy transition.
Once a green investor favourite, Orsted's market value stood at $15.1 billion at Thursday's close, a far cry from its peak of $93.9 billion in January 2021, LSEG data shows.
"The simplest way for investors to regain trust is to change the CEO," Sydbank analyst Jacob Pedersen said, while adding that Errboe was the right person for the job.
"What is needed is some continuity in order to keep an eye on the ball, and to solve the problems that exist in various parts of the company," Pedersen said.
Orsted's shares were down 0.2% at 1010 GMT, slightly underperforming Europe's blue-chip stock index.
Errboe, the deputy CEO and chief commercial officer, will take the helm from Feb. 1, Orsted said.
He has previously been interim finance chief and head of the company's Europe region. He was appointed deputy CEO last March as part of Orsted's new business plan, which included trimming investment and capacity targets.
Nipper, who was CEO at Danish industrials group Grundfos for six years before joining Orsted, thanked his team on Friday and praised Errboe.
"My passion for a world that runs entirely on green energy continues to be deeply profound," Nipper wrote on LinkedIn.
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