Ørsted A/S (CPH:ORSTED), the newly renamed offshore wind developer, today reported a 10% decline in third-quarter underlying operating profit and upgraded its 2017 guidance after a deal to sell 50% in its Walney Extension wind farm.
The Danish utility, previously known as Dong Energy, said earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations fell to DKK 1.8 billion (USD 281.4m/EUR 241.9m) in the third quarter of 2017 from DKK 3.1 billion a year earlier, with the decline reflecting one-off compensations of DKK 1.1 billion from the renegotiation of a gas purchase contract in the prior-year period. Underlying EBITDA was down 10% year-on-year as earnings from operating offshore wind farms jumped 39%, but earnings from construction for partners were lower.
In the first nine months of 2017, EBITDA came in at DKK 9.5 billion, representing underlying growth of 11%, which Ørsted said lived up to its expectations.
| in DKK |
Q3 2017 |
Q3 2016 |
9-mo 2017 |
9-mo 2016 |
| EBITDA |
1.76bn |
3.1bn |
9.49bn |
12.8bn |
| Underlying EBITDA |
1.76bn |
1.95bn |
9.49bn |
8.57bn |
| Profit (loss) for the period from cont. operations |
209m |
2.52bn |
3.93bn |
8.17bn |
| Profit (loss) for the period |
3.14bn |
3.33bn |
10.77bn |
9.7bn |
| Cash flow from operating activities |
(1.1bn) |
(56m) |
(2.06bn) |
9.52bn |
| Gross investments |
(5.15bn) |
(4.66bn) |
(11.94bn) |
(10.23bn) |
The company simultaneously announced it has signed a deal to sell a 50% stake in the 659-MW Walney Extension offshore wind project to pension funds PKA and PFA. As a result, it increased its EBITDA forecast for 2017 to DKK 19 billion-21 billion from DKK 17 billion-19 billion. The increased guidance corresponds to underlying growth of 32%-45%.
Chief executive and president Henrik Poulsen said that in the third quarter the company both increased generation from its offshore wind farms and strengthened its development pipeline with the award of contract for the 1.4-GW Hornsea 2 offshore wind farm in the UK. "This will be our first offshore wind farm, which can generate power at a lower price than newly constructed coal- and gas-fired power stations," Poulsen noted.
Ørsted's installed and decided capacity now stands at almost 9 GW.
The company has set a target of reaching a green share in power and heat generation of more than 80% in 2020 and 95% in 2023.
(DKK 1 = USD 0.156/EUR 0.134)
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Source: DONG Energy A/S
