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Offshore wind farm divestments lift Ørsted's profits

By: Tom Russell 03/11/2022 Ørsted

General Windfarms

Ørsted issued it interim report for the first nine months of 2022 and has raised its full-year EBITDA guidance.

The offshore wind giant reported operating profit (EBITDA) for the first nine months of the year amounted to DKK 25.4 billion, of which DKK 10.9 billion related to the 50 % farm-downs of the Hornsea 2 and Borkum Riffgrund 3 projects.

EBITDA excluding new partnerships increased by 3.8 billion and amounted to DKK 14.4 billion.

Net profit amounted to DKK 15.3 billion, and return on capital employed (ROCE) came in at 24 %.

Ørsted increased its full-year EBITDA guidance with DKK 1 billion to DKK 21-23 billion excluding earnings from new partnerships during the year, i.e. excluding the gains from the 50 % farm-downs of Borkum Riffgrund 3 and Hornsea 2.

The company lowered its gross investments guidance by DKK 5.0 billion to DKK 38-42 billion, mainly due to timing effects on projects, with lower spend in 2022 than originally planned.

Mads Nipper, Group President and CEO of Ørsted, said: “Despite the highly unusual and volatile period with war, high inflation, and increasing interest rates Ørsted has continued the build-out of renewable energy and the delivery of power and heat to our communities. Most of the power delivered was under fixed-price agreements or hedged.

In these unprecedented times, I am very pleased that we have been able to increase our EBITDA guidance to DKK 21-23 billion for the year.

We reached several strategic milestones in the build-out of renewable energy during the quarter, including the acquisition of Ostwind, which expands our European onshore portfolio into Germany and France with more than 1.5 GW of development pipeline projects, and a pioneering partnership with Copenhagen Infrastructure Partners (CIP) with the aim to develop approx. 5.2 GW of offshore wind in Denmark.

I am also proud that we just entered into a new five-year global partnership with WWF to unite action on climate and ocean biodiversity. The partnership aims to drive a fundamental change in the approach to integrating action on climate and biodiversity by advancing offshore wind that strives to achieve a net-positive biodiversity impact.”

In its Offshore Division, power generation increased by 42 % to 3.2 TWh in Q3 2022. The increase was due to ramp up at Hornsea 2 and higher wind speeds. Wind speeds amounted to a portfolio average of 7.7 m/s, which was higher than in Q3 2021 (7.6 m/s), but below the normal wind speeds expected in the third quarter (8.4 m/s).

Availability ended at 91 %, slightly lower than the same period last year. This was mainly driven by lower availability at Hornsea 2 in the commissioning and start-up phase.
Revenue increased by 174 % to DKK 25.1 billion. Revenue from offshore wind farms in operation increased by 16 % to DKK 4.0 billion, mainly driven by higher generation and higher power prices for the merchant part of the portfolio.

EBITDA increased by DKK 8.3 billion and amounted to DKK 9.7 billion.

Ørsted also revealed it is making progress with the construction of the Greater Changhua 1 and 2a projects, located in Taiwan. It has installed all 111 jacket foundations and 71 wind turbines. The company stated it is continuing to make good progress in all areas of the construction and still expect to fully commission the wind farm in 2023.
The company fully commissioned Hornsea 2, the world’s largest installed wind farm, in August. The 1.3 GW offshore wind farm comprises 165 wind turbines, located 89 km off the Yorkshire Coast, which will help power over 1.4 million UK homes with low-cost, clean and secure renewable energy.

For more information on offshore wind farms worldwide, click here.

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Offshore wind farm divestments lift Ørsted's profits

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