Growing wind portfolio and major divestment pushes Ørsted through the Covid crisis

Danish developer 脴rsted reports an 18% fall year-on-year fall in profits in Q3, but a 2% rise for the first nine months of the year

by Andrew McCorkell 28 October 2020

2020 Q3 financial report was the last to be delivered by Henrik Poulsen as head of 脴rsted

脴rsted's interim report for the first nine months of 2020 confirmed an operating profit (EBITDA) of DKK 3,630 million (鈧437 million) for Q3, 18% down on the DKK 4,161 million for the same period in 2019.

But the developer's divestment of its Danish power distribution, residential customer, and city light businesses 鈥 for a gain of DKK 11.1 billion 鈥 played a major role in the year-to-date's operating profit rising from DKK 12.9 billion in 2019 to DKK 鈧13.1 billion, a 2% increase.

Earnings from wind increased by 16%, led by the ramp-up of power generation from the听1218MW Hornsea Project One 补苍诲听752MW Borssele I & II offshore projects.听

脴rsted鈥檚 EBITDA guidance remains unchanged from the interim financial report for H1 2020 of DKK 16-17 billion in 2020, with expectations for gross investments of DKK 28-30 billion in 2020.

Henrik Poulsen, CEO and president of 脴rsted, said: 鈥淒espite the tenacious Covid-19 pandemic, our operations and financial performance in Q3 remain stable and fully in line with our expectations from the beginning of the year.

鈥淚n Q3 2020, we reached an important strategic milestone as we completed our portfolio transformation into a global renewable energy company with the divestment of our power distribution (Radius) businesses to the Danish energy company SEAS-NVE.鈥

The company commissioned the 103MW Willow Creek Wind (South Dakota) 听onshore project in South Dakota, US, in Q3, also deciding to invest in the听367MW Western Trail Wind wind farm in Texas in September. It should be commissioned in Q3 next year.

The late-stage听298MW Haystack Wind onshore development in Nebraska was acquired in October, is eligible for 100% PTC听 and is expected to be commissioned in Q4 next year.

Bids were also in for the up-to-2.5GW offshore auction in New York in October with an outcome expected by the end of the year.

However, 脴rsted is anticipating delays to the schedule of a number of US offshore projects including 1148MW Ocean Wind 2 , 120MW Skipjack Wind 1 , and 924MW Sunrise Wind .

"We had expected to receive the notices of intent for the most progressed projects," said CFO Marianne Wiinholt.

"But we can now see that this will not happen before the US election. We now expect we will get more clarity on the timeline most likely in the first quarter of 2021. That will mean a delay for our major projects. We can no longer expect the 2023-24 timeline."

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