Ørsted's EBITDA exceeds expectations

by James Bernthal-Hooker in 30/01/2020 Ørsted A/S

Profits exceeded expectations for Danish wind titan Ørsted in 2019.

The company’s annual report, approved today, shows that operating profit (EBITDA), excluding new partnerships, increased by 17% to DKK 17.5 billion (EUR 2.34 billion), ahead of expectations and also of the company’s own start-of-year guidance of DKK 16-17 billion.

Operational onshore and offshore wind farms yielded earning increases of 30%, up to DKK 14.8 billion (EUR 1.98 billion), which Ørsted attributes to a ‘by ramp-up of generation from new offshore wind farms and a full year with contribution and ramp-up in our onshore wind business.’

In addition, the company considers its exceeded expectations a result of strong offshore wind generation in December, a less negative effect from the value of gas at storage than expected, and an agreement to divest loss-making LNG activities towards the end of the year. In the coming year, Ørsted expects EBITDA to be around DKK 15-16 billion, reflecting a decline in earnings from existing offshore wind partnerships, which were more abundant in 2019. The current figures also represent a decline in profits from 2018, albeit a smaller one than expected.

Henrik Poulsen, CEO and President of Ørsted, said: ‘2019 was a great year for Ørsted with continued strategic progress and global expansion. We achieved a very satisfactory operating profit (EBITDA), and the green share of our heat and power generation increased to a new high of 86%.

‘We reached significant milestones by winning two large-scale offshore projects in the US. We were awarded 1,100 MW with our Ocean Wind project in New Jersey and 880 MW with our Sunrise Wind project in New York. With these awards, we have secured a US offshore wind portfolio with a total capacity of 2.9 GW to be completed towards 2024. In addition, we have up to 4.5 GW of lease rights which can be developed for future offshore wind projects in the US. The Sunrise Wind project will be constructed together with our partner Eversource. For Ocean Wind, we are in exclusive negotiations with the Public Service Enterprise Group (PSEG) regarding a joint venture agreement to acquire 25% of the project.

‘In the UK, we commissioned Hornsea 1, the world’s largest offshore wind farm with a capacity of 1,218 MW. We passed further milestones when we inaugurated phase two of Taiwan’s first-ever offshore wind farm Formosa 1, and when we commissioned the onshore wind farm Lockett in Texas in the US.’

Poulson also emphasised Ørsted’s promoted vision of a world powered exclusively by green energy and the positive impact of renewables in the fight against global warming.

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