Divestments help Ørsted book record-high profit in 2022

Danish clean energy group Ørsted A/S (CPH:ORSTED) on Wednesday posted a record-high operating profit for 2022 and confirmed its forecast for EBITDA excluding earnings from new partnerships in the current year.

The offshore wind major closed 2022 with earnings before interest, tax, depreciation and amortisation (EBITDA) of DKK 32.1 billion (USD 4.7bn/EUR 4.3bn), up 32% on the year. Almost DKK 11 billion of the total was associated with the 50% farm-downs of Hornsea 2 and Borkum Riffgrund 3 projects. Excluding new partnerships, EBITDA went up by DKK 5.3 billion to DKK 21.1 billion, within the company’s latest guidance of DKK 21 billion-23 billion.

Ørsted said it had recorded considerably higher earnings from onshore wind and solar activities, as well as from the heat and power and gas businesses. Meanwhile, it suffered an unexpected drop in offshore wind, mainly resulting from adverse impacts from hedges and construction delays at Hornsea 2 in the UK and Greater Changhua 1 & 2a projects in Taiwan.

The company’s results for the past year contain an impairment of DKK 2.5 billion on its 50% partnership in the Sunrise Wind project in US waters caused by supply chain bottlenecks, the rising inflation and increased costs of capital. The registered losses, coupled with higher depreciation from operational assets, partly offset the improvement of earnings before interest and tax (EBIT).

“We achieved strong operational performance with our assets remaining fully operational and having robust availability rates,” said CEO Mads Nipper. He added that the group remains confident in its long-term financial estimates and growth ambitions.

In terms of capacity, Ørsted was awarded 2.9 GW of offshore wind projects and added 1.6 GW of onshore renewables through organic growth and acquisitions, lifting its firm capacity to 30.7 GW at end-2022. The company’s goal is to reach 50 GW of installed renewable capacity by 2030.

The Danish firm reiterated its forecast for EBITDA excluding new partnership agreements of between DKK 20 billion and DKK 23 billion in 2023, expecting its earnings from the offshore segment to be about DKK 6.5 billion higher than the DKK 8.6 billion booked in 2022, whereas those from onshore will be in line with the DKK-3.6-billion result in 2022. Gross investments for this year are seen to range between DKK 50 billion and DKK 54 billion.

(DKK 1.0 = USD 0.1463/EUR 0.134)

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