Ørsted doubles operating profit in Q1

A turbine at Hornsea One. Image by Ørsted (orsted.co.uk)

April 29 (Renewables Now) - Danish clean energy group Ørsted A/S (CPH:ORSTED) on Friday confirmed its 2022 EBITDA guidance after nearly doubling its operating profit in the first quarter of the year, aided by a farm-down gain on the Borkum Riffgrund 3 project.

Operating profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), grew 94% year-over-year to DKK 9.4 billion (USD 1.32bn/EUR 1.26bn), including a DKK-1.6-billion gain from the 50% stake sale in the 900-MW Borkum Riffgrund 3 offshore wind project in Germany. The earnings increase was also helped by operational assets and a DKK-0.5-billion provision reversal.

The company said that continued high power prices had contrasting effects on its offshore and bioenergy businesses, which generally offset each other. The effect in the offshore business was negative as later-than-expected commissioning of turbines at Hornsea 2 in the UK led to overhedging. Hornsea 2, the world’s largest offshore wind farm, is expected to be commissioned during the summer.

Ørsted kept its full-year EBITDA guidance of DKK 19 billion-21 billion, which excludes farm-down gains. It also reiterated its full-year gross investment estimate of DKK 38 billion-42 billion.

More details of the company’s results:

in DKK million Q1 2022 Q1 2021
EBITDA 9,429 4,863
- Offshore 5,919 3,946
- Onshore 850 228
- Bioenergy and Other 2,514 622
Profit (loss) for the period 5,701 1,598
Cash flow from operating activities (37) 8,087
Free cash flow (4,942) 1,391

Power generation from offshore and onshore assets grew 24% to 7.7 TWh, reflecting ramp-up of generation as well as higher wind speeds.

Ørsted welcomes the EU’s focus to end its dependence on Russian oil and gas and accelerate its green transformation.

On the war in Ukraine chief executive Mads Nipper said: “We are taking every step possible to stop our cooperation with Russian companies, including ceasing all sourcing of biomass and coal for our power stations. Ørsted rejects the claim from Gazprom Export to pay in roubles for the gas delivered. Gas is not a core business for Ørsted, and we are not entering into new long-term contracts or extending our current contracts. If we make a net profit from the Gazprom Export contract in 2022 it will be donated to humanitarian aid in Ukraine.”

(DKK 1 = USD 0.141/EUR 0.134)

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Browse all articles from Plamena Tisheva

Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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