Denmark

Denmark

Growing wind portfolio and major divestment pushes Ørsted through the Covid crisis

Danish developer Ørsted reports an 18% fall year-on-year fall in profits in Q3, but a 2% rise for the first nine months of the year

2020 Q3 financial report was the last to be delivered by Henrik Poulsen as head of Ørsted
2020 Q3 financial report was the last to be delivered by Henrik Poulsen as head of Ørsted

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Ørsted's interim report for the first nine months of 2020 confirmed an operating profit (EBITDA) of DKK 3,630 million (€437 million) for Q3, 18% down on the DKK 4,161 million for the same period in 2019.

But the developer's divestment of its Danish power distribution, residential customer, and city light businesses — for a gain of DKK 11.1 billion — played a major role in the year-to-date's operating profit rising from DKK 12.9 billion in 2019 to DKK €13.1 billion, a 2% increase.

Earnings from wind increased by 16%, led by the ramp-up of power generation from the 1218MW Hornsea Project One Hornsea Project One (1218MW) Offshoreoff Yorkshire, UK, Europe Click to see full details and 752MW Borssele I & II Borssele I & II (752MW) Offshoreoff Zeeland, Netherlands, Europe Click to see full details offshore projects. 

Ørsted’s EBITDA guidance remains unchanged from the interim financial report for H1 2020 of DKK 16-17 billion in 2020, with expectations for gross investments of DKK 28-30 billion in 2020.

Henrik Poulsen, CEO and president of Ørsted, said: “Despite the tenacious Covid-19 pandemic, our operations and financial performance in Q3 remain stable and fully in line with our expectations from the beginning of the year.

“In Q3 2020, we reached an important strategic milestone as we completed our portfolio transformation into a global renewable energy company with the divestment of our power distribution (Radius) businesses to the Danish energy company SEAS-NVE.”

The company commissioned the 103MW Willow Creek Wind (South Dakota) Willow Creek Wind (South Dakota) (103MW) OnshoreButte County, South Dakota, USA, North America Click to see full details onshore project in South Dakota, US, in Q3, also deciding to invest in the 367MW Western Trail Wind Western Trail Wind (367MW) OnshoreTexas, USA, North America Click to see full details wind farm in Texas in September. It should be commissioned in Q3 next year.

The late-stage 298MW Haystack Haystack (298MW) OnshoreWayne County, Nebraska, USA, North America Click to see full details onshore development in Nebraska was acquired in October, is eligible for 100% PTC  and is expected to be commissioned in Q4 next year.

Bids were also in for the up-to-2.5GW offshore auction in New York in October with an outcome expected by the end of the year.

However, Ørsted is anticipating delays to the schedule of a number of US offshore projects including 1100MW Ocean Wind Ocean Wind (1100MW) Offshoreoff Atlantic City, New Jersey, USA, North America Click to see full details, 120MW Skipjack Skipjack (120MW) Offshoreoff Ocean City, Maryland, USA, North America Click to see full details, and 880MW Sunrise Wind Sunrise Wind (880MW) Offshoreoff Martha's Vineyard, Massachusetts, USA, North America Click to see full details.

"We had expected to receive the notices of intent for the most progressed projects," said CFO Marianne Wiinholt.

"But we can now see that this will not happen before the US election. We now expect we will get more clarity on the timeline most likely in the first quarter of 2021. That will mean a delay for our major projects. We can no longer expect the 2023-24 timeline."

 

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