Offshore wind stake sales boost Ørsted's 2021 op earnings

The Borssele I&II offshore wind farm. Image by Ørsted (www.orsted.com)

February 2 (Renewables Now) - Danish clean energy group Ørsted A/S (CPH:ORSTED) on Wednesday reported a 34% year-on-year increase in 2021 operating profit thanks to farm-down transactions related to offshore wind assets.

The 2021 performance of the pure-play renewables company mostly benefitted from the 50% stake sale in the 752-MW Borssele 1 & 2 offshore wind farms in Dutch waters and the divestment of a 50% stake in the 605-MW Greater Changhua 1 offshore wind project in Taiwan. As a result, the company recorded a gain of DKK 8.5 billion (USD 1.29bn/EUR 1.14bn) and pushed up its earnings before interest, tax, depreciation and amortisation (EBITDA) to DKK 24.3 billion.

Excluding the partnerships, Ørsted’s operating profit totalled DKK 15.8 billion, in line with expectations for a DKK 15 billion-16 billion range. The company pointed out that the past year was challenging due to lower wind speeds, the European energy crisis and provisions related to some offshore wind assets.

“We successfully navigated the challenges during the year, and we have achieved significant results in 2021, both strategically, operationally, and financially,” said president and CEO Mads Nipper.

The table below gives more details about Ørsted’s 2021 performance.

Figures in DKK million Q4 2021 Q4 2020 2021 2020
EBITDA 8,253 5,003 24,296 18,124
Profit (loss) for the period 3,258 2,189 10,887 16,716
Cash flows from operating activities 668 6,756 12,148 16,466
Gross investments (11,752) (8,639) (39,307) (26,967)
Divestments 10,952 (1,519) 21,519 19,039
FFO/adjusted net debt 31% 65% 31% 65%
ROCE 15% 10% 15% 10%

The company recommended distributing a dividend of DKK 12.5 per share for 2021.

At end-2021, Ørsted had a firm capacity of 26.1 GW, up from 20.4 GW a year before. The company aims to achieve 50 GW of installed renewable energy capacity by 2030, of which 30 GW will be offshore.

Last year it brought online the 367-MW Western Trail wind park in Texas, the 460-MW Permian solar-storage complex in Texas, the 227-MW Muscle Shoals solar park in Alabama and acquired the 302-MW Lincoln Land wind project in Illinois. Additionally, it purchased Brookfield Renewable Ireland, the onshore wind business in Ireland and the UK of Brookfield Renewable Partners LP (NYSE:BEP). These milestones helped it end 2021 with an installed renewables capacity of 13 GW, or 15% more than it had at end-2020. Of the total, 3.4 GW comes from onshore assets.

Looking ahead, the Danish firm expects to book an operating profit of DKK 19 billion-21 billion, excluding new partnerships, in 2022. EBITDA including new partnership agreements is expected to be significantly higher than the 2021 result, both from onshore and offshore operations. Gross investments are forecast to range between DKK 38 billion and DKK 42 billion.

(DKK 1.0 = USD 0.152/EUR 0.134)

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