Ørsted revenue up 20% in Q1

DENMARK: Offshore wind developer Ørsted recorded a "strong" start to the 2018, posting a 20% increase in revenue for the first quarter.

Completion and ramp-up of Ørsted's UK projects, and high wind speeds, helped boost earnings in Q1
Completion and ramp-up of Ørsted's UK projects, and high wind speeds, helped boost earnings in Q1

Revenue for the three-month period totalled DKK 19.8 billion (€2.66 billion), while Ebitda increased 68% to DKK 5.5 billion (€738 million).

The Danish firm said profits from its offshore wind projects grew 51% to DKK 3.2 billion (€429.5 million), due to the completion and ramp-up of its UK wind projects Walney Extension, Race Bank and Burbo Bank Extension.

The projects also experienced higher than average wind speeds in the quarter, boosting production, Ørsted said.

Revenue from its wind business grew 43% year-on-year.

As a result of the strong start to 2018, Ørsted's board has increased Ebitda guidance for 2018 from DKK 12-13 billion (€1.6-1.75 billion) to DKK 12.5-13.5 billion (€1.68-1.8 billion).

"We have had a strong start to the year with good earnings from our offshore wind business, where Ebitda almost doubled compared to Q1 2017," said Ørsted CEO Henrik Poulsen.

Poulsen indicated 2018 would see Ørsted begin to make an impact beyond northern Europe.

"The selection of the preferred bidder or bidders in the Massachusetts auction will expectedly be announced in late May. In addition, the result of the 3.5GW grid allocation in Taiwan is expected within weeks," he said.

"We participate in this auction with our four Greater Changhua offshore wind projects.

"In April, we submitted a bid in the auction in Connecticut, competing for 200MW of offshore wind capacity.

"We also submitted bids in the German auction, where we expect to receive the results within weeks," he said.

Speaking with journalists, Ørsted CFO Marianne Wiinholt said much of the company's focus is on new markets beyond Europe, as they have the better opportunities to maximise returns. 

"We are seeing more competition [in Europe], which is compressing returns," Wiinholt explained. "We can still win in Europe but not at the same levels of return."

Wiinholt said Ørsted are also looking at other Asian markets, particularly South Korea and Japan. 

"We are hopeful South Korea and Japan will move ahead. Vietnam and India are also setting [offshore wind] targets but the first two are very interesting," Wiinholt said.


Alongside its results presentation, Ørsted has also made an investment committment for the Formosa 1 phase 2 offshore wind project in Taiwan.

Ørsted, then Dong Energy, and investment firm Macquarie Capital acquired a 35% and 50% stake, respectively, in the Formosa site from developer Swancor Renewable in January 2017.

The whole consortium still needs to give a full final investment decision on the project, but the Danish developer wanted to demonstrate to authorities in Taiwan its committment to the project . 

The 20-turbine, 120MW project will be installed beside the current two-turbine, 8MW pilot project installed in October 2016. 

Siemens Gamesa Renewable Energy will supply its SWT-6.0-154 turbine to the second phase.

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