Ørsted to beat 2020 operating profit forecast

Danish energy giant Ørsted expects to report full-year operating profit above its latest forecasts

Ørsted plans to sell a 50% share in Borssele I and II around summer (pic credit: Flying Focus)
Ørsted plans to sell a 50% share in Borssele I and II around summer (pic credit: Flying Focus)

Ørsted expects to exceed its operating profit forecast for 2020 following strong performance in the last months of the year and despite negative impacts of the coronavirus pandemic.

It expects operating profit (Ebitda) of DKK 18 billion (€2.4 billion) for 2020 – above its latest guidance of DKK 16-17 billion.

The energy giant cited higher than expected earnings from its operating assets and trading related to hedging of power exposures, as well as a temporary increase in gas earnings due to higher prices at the end of the year.

Most of 2020’s operating profits are expected to have accrued from the offshore division (DKK 14.8 billion), with the markets and bioenergy segment contributing DKK 2.1 billion and the onshore unit, DKK 1.1 billion

Ørsted is due to present its full-year results for 2020 on 3 February.

It had claimed impacts from the coronavirus pandemic were minimal in the first quarter of the year, before reduced electricity demand helped to push the developer into a loss in the second quarter.

The developer reported squeezed profits in the third quarter, but was boosted by divestments and higher wind earnings after the ramp-up of generation at large offshore wind farms in the third quarter.

Ørsted expects its earnings from offshore and markets and bioenergy to fall in 2021, while onshore earnings are due to rise.

It expects to close the 50% farm-down of the 605MW Greater Changhua 1 wind farm off Taiwan this year, and plans to sell a 50% share in the 752MW Borssele I & II Borssele I & II (752MW) Offshoreoff Zeeland, Netherlands, Europe Click to see full details project in Dutch waters around summer. The developer also plans to explore the possibility of selling shares in its solar PV portfolio.

None of Ørsted’s earnings in 2020 came from new partnership agreements, while Ebitda from its existing agreements in 2020 was DKK 1.6 billion. However, this is expected to be close to zero in 2021.

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