Ørsted Ups full year forecast operating profit, gross capital formation


The world’s leading offshore wind developer, Ørsted, has raised its guidance for full-year operating income (EBITDA) and gross capital expenditures following the release of results for the second quarter of fiscal 2022.

The company’s H1 EBITDA was DKK 13.044 billion (EUR 1.75 billion), on par with the same period last year when EUR 13.059 billion was reported.

EBITDA excluding new partnerships for the period increased by 48 percent to DKK 11.4 billion.

Net profit for the first half of 2022 was DKK 5.97 billion, a decrease of 16 percent compared to the net profit of DKK 7.142 billion recorded in the first half of 2021. The return on capital employed (ROCE) was 15 percent in the first half of 2022.

The EBITDA forecast excluding new partnership agreements has been raised by DKK 1 billion to DKK 20-22 billion. The increase is mainly due to higher income from Bioenergy & Other and Onshore, the company said.

The EBITDA guidance excludes income from new partnerships during the year, such as the gain on the 50% farm-down of Borkum Riffgrund 3 in Q1 2022 and the forthcoming farm-down of Hornsea 2.

The company has also increased the gross investment forecast by DKK 5 billion to DKK 43-47 billion. The increase is due to the expected completion of the €689 million acquisition of Ostwind, a developer of onshore wind farms in Germany and France.

“In addition to a series of strong results for the period, including an increase in our full-year EBITDA guidance, we achieved significant strategic milestones.” Mad’s NipperGroup President and CEO of Ørsted, said.

“We have been awarded the contract for the world’s largest offshore wind farm, Hornsea 3 in Great Britain with a capacity of 2,852 MW. With this significant win and the maturity of more offshore projects, we are on track to achieve our goal of 30 GW of offshore wind energy by 2030. In general, we have seen a positive market development in the first half of 2022. Both the EU and the US have presented very ambitious plans to accelerate renewable energy deployment, ensuring a strong platform for further growth in renewable energy development.”

offshore wind

Electricity generation at Ørsted’s offshore wind farms increased by 32 percent to 3.3 TWh in the second quarter of 2022.

The increase was due to the ramp-up of the Hornsea 2 wind farm off the UK coast and higher wind speeds. This was only partially offset by Borssele’s 50 percent farm down in May 2021, the company said.

Wind speeds were a portfolio average of 8.4 m/s, which was higher than wind speeds of 7.8 m/s in Q2 2021 but below normal wind speeds of 8.7 m/s experienced in Q2 to be expected.

Availability ended at 94 percent, slightly higher than the same period last year.

Revenue increased by 94 percent to 17.3 billion DKK in the second quarter of 2022. Income from operating offshore wind farms increased by 42 per cent to 4.8 billion DKK, mainly due to higher generation and higher electricity prices for the commercial part of the portfolio. Revenue from electricity sales almost doubled to 10.4 billion DKK due to higher electricity prices and higher volumes sold. Income from construction contracts increased by DKK 2.3 billion, mainly related to the construction of Greater Changhua 1 for partners.

Revenue for the first half of 2022 was DKK 37.142 billion, an increase of 67 per cent compared to the DKK 22.225 billion reported for the same period last year.

EBITDA decreased by DKK 5.6 billion and amounted to DKK 1.9 billion. EBITDA from sites, O&M and PPAs was DKK 2.0 billion in the second quarter of 2022.

Despite a positive impact from higher wind speeds during the quarter and the ramp-up of power generation at Hornsea 2, EBITDA fell 14 percent, the company said. This was primarily due to over-hedging and ineffective hedging across the offshore portfolio, including the later than expected commissioning of wind turbines at Hornsea 2 and slightly lower than normal wind speeds.

In addition, the company faced negative impacts from high pricing and volatility, from expanding its portfolio and from the 50 percent farmdown of Borssele. The EBITDA from partnerships amounted to DKK 0.6 billion and related to existing partnerships, mainly construction works in Greater Changhua 1 for partners.

The second quarter of 2021 was positively impacted by the farm down of 50 percent of Borssele in the amount of 5.4 billion DKK.

Adjusted for new partnerships, EBITDA from existing partnerships increased by DKK 0.4 billion. EBITDA from other activities, including project development, amounted to -0.7 billion DKK, 0.2 billion DKK more than in the second quarter of 2021 and was mainly related to offset project development costs.

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