Ørsted Beats 2020 EBITDA Guidance

Ørsted Beats 2020 Operating Profit Guidance

World’s leading offshore wind developer Ørsted expects an operating profit (EBITDA) of DKK 18 billion (EUR 2.42 billion) for 2020, which is above the latest guidance of DKK 16-17 billion.


The increase in earnings is primarily of a temporary nature, Ørsted said. However, the company has also seen strong operational performance throughout the group in the last months of the year.

New Partnerships in 2021

The EBITDA guidance does not include earnings from new partnership agreements as it is difficult to predict the exact timing of potential farm-downs as well as the distribution of income between years if the partnership includes a construction agreement.

In terms of new partnerships in offshore wind in 2021, Ørsted expects to close the 50 per cent farm-down of Greater Changhua 1 following the agreement announced in December 2020.

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Furthermore, a farm-down of a 50 per cent share in the Borssele 1 & 2 offshore wind farm is planned around summer.

The company had no earnings from new partnership agreements in 2020, while EBITDA from existing partnerships is expected to amount to DKK 1.6 billion. In 2021, EBITDA from existing partnerships is expected to be close to zero.

Offshore Earnings in 2021

Earnings in the company’s Offshore division, excluding new partnership agreements, are expected to be lower than in 2020. Earnings are also expected to be lower than in 2020 adjusted for the non-repetition of earnings from existing partnerships in 2020 (around DKK 1.6 billion) and the positive effect (around DKK 1 billion) of ceasing to report according to the business performance principle in 2021.

The positive impact on operational earnings driven by the last 400 MW of Hornsea 1 receiving CfDs from April and full-year effects from Borssele 1 & 2 net of the reduction in site earnings from the assumed farm-down will be more than offset by a number of adverse effects, Ørsted said.

In 2021, the company expects an increase in expensed project development costs, O&M costs related to Greater Changhua 1 & 2a and Hornsea 2 before they commence generation in 2022, higher TNUoS charges, and lower earnings from Horns Rev 2 which came out of subsidy period in October 2020.

Finally, 2020 had higher than normal wind speeds, which constitutes the largest negative impact year on year.

From 2021, Ørsted will cease using its supplementary business performance principles and only report its financials based on IFRS.

The transition entails that the market value of our business performance hedges, related to commodities and related FX, deferred to a future period at the end of 2020 will cease to exist as it has already been recognised in the income statement according to IFRS.

For 2021, EBITDA according to IFRS is expected to be approximately DKK 1 billion higher than what would have been expected if the company had continued to report based on the business performance principle. The majority of this is related to Offshore site earnings.