Ørtsed Reports Strong First Half for 2020, Operating Profit of $1.5 Bn

Ørsted has issued its interim report for the first half of 2020, reporting an operating profit (EBITDA) of USD 1.5 billion, an 11 percent increase YoY

The Board of Directors at Ørsted has approved the interim report for the first half (H1) of 2020. The firm reported an operating profit (EBITDA) of DKK 9.8 billion (USD 1.5 billion), an 11 percent increase compared to the same period last year.

The firm also revealed that its earnings from offshore and onshore wind farms in operation increased by 17 percent to DKK 8.2 billion driven by the ramp-up of power generation from Hornsea 1, Lockett, and Sage Draw together with high wind speeds. Net profit amounted to DKK 2.5 billion (USD 393 million) and return on capital employed (ROCE) came in at 11 percent.

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The firms’ green share for its heat and power generation increased from 82 percent to 88 percent.

Henrik Poulsen, CEO and President of Ørsted, said that “despite the comprehensive health, social, and economic consequences of COVID-19, Ørsted has maintained stable operations and strong earnings during 2020. Our asset base has continued to be fully operational and we have maintained normal availability rates on our offshore and onshore wind farms.

“We have however seen negative COVID-19 related effects on European power markets, especially in the UK, driven by lower demand for electricity. The negative impact on our Q2 earnings was approx. DKK 150 million. A contained impact which does not change our full-year expectations.

“Our construction projects have largely progressed according to plans, both in Europe, Asia, and the US. The part of our portfolio most affected by COVID-19 is the construction of offshore substations for Hornsea 2 and Greater Changhua 1 & 2a. These are being constructed at two shipyards in Singapore, which were closed down for two months due to COVID-19. The shipyards have now begun to slowly ramp-up again. Although we still expect to be able to complete both projects within our budget and time schedule, we see an increased risk of delays; especially at Hornsea 2. We expect any delays to have a limited overall impact on project economics.”

Key Project Milestones during the period:

• The firm signed the largest ever renewable corporate power purchase agreement (CPPA) with Taiwan-based TSMC, the world’s largest semiconductor foundry. TSMC will offtake the full generation from our 920 MW Greater Changhua 2b & 4 offshore wind farm.
• The firm commissioned the 230 MW onshore wind farm Plum Creek in Nebraska ahead of schedule and on budget, and received tax equity funding from our partners.
• It acquired the 227 MW solar PV project Muscle Shoals, located in Alabama. When completed, expectedly in Q3 2021, it will be the largest solar farm in the south-eastern US.

The firm has reiterated its EBITDA guidance of DKK 16-17 billion in 2020. But has lower its expectation on gross investments by DKK 2 billion to DKK 28-30 billion in 2020 due to changed timing of payments.