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Ørsted maintains financial expectations, but "in the low end"

4C Offshore | James Bernthal-Hooker
By: James Bernthal-Hooker 12/08/2021 Ørsted

In its interim report for the first half of 2021, Ørsted reports that full-year EBITDA guidance will be maintained, despite low wind speeds and cable protection issues.

The Danish-headquartered developer noted that EBITDA for H1 2021 amounted to DKK 13.1 billion, which is DKK 3.3 billion up from the same period in 2020. The increase, the company notes, was driven by the 50% farm-down of Borssele 1 & 2, in Dutch waters, from which Ørsted gained DKK 5.4 billion.

From its operational onshore and offshore wind farm, Ørsted’s earnings were DKK 0.3 billion down on HQ 2020. The company cited “significantly lower wind speeds across our portfolio” for this decrease, despite increased generation from newly operational projects. More negative impacts were attributed to anticipated hurdles: TNUoS tariffs on UK wind farms, lower earnings from Horns Rev 2 after the subsidy period ended in October 2020, and lower ROC recycle prices.

While H1 last year saw high earnings from existing partnerships, driven by the construction agreement for the Hornsea Project One transmission asset, H1 2021 saw a DKK 1.8 billion decrease, negatively impacted by a warranty provision towards partners. This has to do with a cable protection issue at some of Ørsted’s wind farms. 4C Offshore previously reported on the cable protection issues.

Net profit amounted to DKK 7.1 billion, while return on capital employed came in at 12.5%, Ørsted informed. The company maintains its full-year EBITDA guidance of DKK 15-16 billion but notes that, due to issues outlined above, it expects the outcome at the lower end of this estimate.

Commenting on the interim report, Ørsted’s Group President and CEO Mads Nipper, said: “In the first half of 2021, we’ve delivered good operational performance, while reaching multiple significant milestones and engaging in a range of strategic partnerships. Within our Offshore business, Ocean Wind 2 was awarded a 1,148 MW contract in New Jersey, fully utilising our Ocean Wind lease area. Our total awarded US portfolio now exceeds 4 GW. We also entered into several new strategic partnerships in Norway, Korea, Scotland, and Japan. In our Onshore business, we commissioned our combined solar PV and storage facility Permian Energy Center and our so far biggest onshore wind farm Western Trail, both located in Texas.

“At our Capital Markets Day in June, we updated our long-term financial guidance and raised our strategic ambition for renewable capacity to approx. 50 GW in 2030. As our industry’s sustainability leader, we’ve set the ambition that no later than 2030, all new projects commissioned must have a net-positive biodiversity impact. Furthermore, we commit to either reuse, recycle, or recover all of the wind turbine blades in our global portfolio upon decommissioning. In addition, in our H1 2021 report, we have taken the first steps to commence reporting of our revenue, EBITDA, and CAPEX according to the new EU taxonomy whose purpose is to support the green transition.”


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