Farm-Downs Lift Ørsted’s Numbers

Leading offshore wind developer Ørsted has recorded an operating profit (EBITDA) of DKK 25.4 billion (EUR 3.41 billion) for the first nine months of the year, of which DKK 10.9 billion related to the 50 per cent farm-downs of the Hornsea 2 and the Borkum Riffgrund 3 offshore wind farms.

EBITDA excluding new partnerships increased by DKK 3.8 billion and amounted to DKK 14.4 billion for the period, the company said.

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Net profit stood at DKK 15.3 billion, and return on capital employed (ROCE) came in at 24 per cent.

Following the release of the results, Ørsted has increased its full-year EBITDA guidance by DKK 1 billion to DKK 21-23 billion excluding earnings from new partnerships during the year. The increase is primarily due to higher earnings from the company’s CHP plants.

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Ørsted has also lowered its gross investments guidance by DKK 5 billion to DKK 38-42 billion, mainly due to timing effects on projects, with lower spend in 2022 than originally planned.

”Despite the highly unusual and volatile period with war, high inflation, and increasing interest rates Ørsted has continued the build-out of renewable energy and the delivery of power and heat to our communities. Most of the power delivered was under fixed-price agreements or hedged,” Mads Nipper, Group President and CEO of Ørsted, said.

”In these unprecedented times, I am very pleased that we have been able to increase our EBITDA guidance to DKK 21-23 billion for the year.”

Offshore Wind

Offshore, power generation increased by 42 per cent to 3.2 TWh in the third quarter of 2022. The increase was due to the ramp-up at Hornsea 2 and higher wind speeds.

Revenue increased by 174 per cent to DKK 25.1 billion. Revenue from offshore wind farms in operation increased by 16 per cent to DKK 4 billion, mainly driven by higher generation and higher power prices for the merchant part of the portfolio.

Revenue from power sales more than doubled to DKK 14.5 billion, due to the higher power prices and higher volumes sold.

Revenue from construction agreements increased by DKK 6.6 billion and mainly related to the divestment of 50 per cent of the offshore transmission assets at Hornsea 2, and the construction of the Greater Changhua 1 offshore wind farm in Taiwan for partners.

EBITDA increased by DKK 8.3 billion and amounted to DKK 9.7 billion. EBITDA from Sites, O&M, and PPAs amounted to DKK 0.5 billion in the third quarter of 2022.

Earnings for the period decreased by DKK 1.4 billion, despite a positive impact from higher wind speeds than last year, the ramp-up of generation at Hornsea 2, higher achieved prices mainly from one-sided German CFD sites, and value creating market trading activities. This was primarily due to both volume-related overhedging from lower-than-expected wind speeds, and other IFRS 9- related ineffective hedges, the company said.

EBITDA from partnerships amounted to DKK 9.8 billion and mainly related to the farm-down of 50 per cent of Hornsea 2 with a gain of DKK 9.3 billion. Adjusted for new partnerships, EBITDA from existing partnerships amounted to DKK 0.4 billion, mainly from construction work at Greater Changhua 1 for partners. EBITDA from other activities, including project development, amounted to DKK -0.6 billion, DKK 0.1 billion more than in the third quarter of 2021, and was mainly related to expensed project development costs.

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”We reached several strategic milestones in the build-out of renewable energy during the quarter, including the acquisition of Ostwind, which expands our European onshore portfolio into Germany and France with more than 1.5 GW of development pipeline projects, and a pioneering partnership with Copenhagen Infrastructure Partners (CIP) with the aim to develop approx. 5.2 GW of offshore wind in Denmark,” Nipper said.

”I am also proud that we just entered into a new five-year global partnership with WWF to unite action on climate and ocean biodiversity. The partnership aims to drive a fundamental change in the approach to integrating action on climate and biodiversity by advancing offshore wind that strives to achieve a net-positive biodiversity impact.”

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Photo: Ørsted