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Ørsted Doubles Offshore Wind Earnings in 2023

World’s leading offshore wind developer Ørsted has reported an operating profit (EBITDA) of DKK 18.7 billion (about EUR 2.5 billion) for 2023 and expects this year’s operating profit to be between DKK 23 billion and DKK 26 billion (approximately EUR 3 billion and EUR 3.4 billion).

This is according to Ørsted’s 2023 annual results, which show the company’s EBITDA, excluding new partnerships and cancellation fees, was at DKK 24 billion (about EUR 3.2 billion), above the firm’s guidance of DKK 20-23 billion (approx. EUR 2.6 billion and EUR 3 billion).

EBITDA from offshore sites more than doubled to DKK 20.2 billion (about EUR 2.7 billion) in 2023 due to the ramp-up of generation at the 1.3 GW Hornsea Two and the 900 MW Greater Changhua 1 and 2a projects, and as the negative effects from hedges in 2022 were not repeated in 2023, said Ørsted.

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Furthermore, EBITDA in 2023 was impacted by a provision of DKK 9.6 billion (approx. EUR 1.2 billion) for cancellation fees related to the company’s decision to cease the development of Ocean Wind 1 in the US. In addition, Ørsted said it recognised impairment losses of DKK 26.8 billion (about EUR 3.5 billion) in 2023 with the majority of these (DKK 19.9 billion or approx. EUR 2.6 billion) related to Ocean Wind 1.

“Despite a year with strong underlying business progress, 2023 marked a year with substantial challenges for Ørsted. Our financial results are adversely affected by the impairments we took on our US offshore projects in the third quarter of 2023 and the provision for cancellation fees related to ceasing the development of the offshore project Ocean Wind 1,” said Mads Nipper, Group President and CEO of Ørsted.

Net profit amounted to DKK -20.2 billion (about EUR 2.7 billion) and return on capital employed (ROCE) came in at -14 per cent, according to Ørsted. Net profit and ROCE excluding impairment losses and cancellation fees amounted to DKK 14.9 billion (about EUR 1.9 billion) and 12.9 per cent, respectively.

Ørsted’s Board of Directors has decided to pause dividend payments for the financial years 2023-2025. Hereafter, the target is to reinstate dividend payments, according to the company.

“Despite the short-term challenges, our traction and underlying momentum was strong in 2023. We delivered strong operational results in 2023 with an adjusted EBITDA slightly above our guidance and with several important milestones achieved. Earnings from our offshore sites more than doubled compared to last year, and in 2023, we advanced three large offshore wind projects with a total capacity of 4.5 GW to final investment decision, one in the UK, the US, and Taiwan, respectively,” said Nipper.

In 2024, EBITDA excluding new partnership agreements and cancellation fees is expected to be between DKK 23 billion and DKK 26 billion (approximately EUR 3 billion and EUR 3.4 billion) and gross investments are expected to be between DKK 48 billion and DKK 52 billion (approx. EUR 6.4 billion and EUR 6.9 billion).

“Today, we’ve presented an updated business plan, including a strategic ambition of 35-38 GW installed renewable capacity by 2030, based on a comprehensive portfolio review. We’ve revisited our portfolio to prioritise growth options with the highest potential for value creation and at the same time reduce risks in the development and execution of our projects,” Nipper said.


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