Orsted firms up earnings guidance on 'solid' operating profit
Orsted's plan to get on track seems to be working as divestments fall into place
Orsted has reported a third-quarter operating profit running 4% higher than the same period last year and slightly lifted expectations for the the year-end following divestments and a boost in renewable energy capacity.
Profit before interest, tax, depreciation and amortisation (Ebitda), excluding new partnerships, totalled DKr9.55bn ($1.4bn) in the third quarter, compared with DKr9.17bn in the corresponding quarter of last year.
Orsted CEO Mads Nipper commented: “I am pleased with our operational performance and financials results. Based on solid nine-month earnings, we have narrowed our Ebitda guidance for the year.”
Commenting on the company's nine-month statement, Nipper referred to the successful renegotiation and settlement of supply chain contracts related to the cancelation of the Ocean Wind project in the US describing “a positive outcome, resulting in a net reversal of cancellation fees (of Dkr6.4bn)”.
Orsted put more than 2.4GW of new renewable energy capacity into operation in the quarter, Nipper noted.
“Furthermore, we have secured additional value-creating renewable growth opportunities in the UK with the 3.5GW award for Hornsea 3 and 4, which is a significant contribution to Orsted's long-term renewable capacity goals,” he said.
Orsted’s Revolution Wind and Sunrise Wind offshore wind projects in the US were described as progressing according to their updated construction plan.
“However, we have seen risks impacting the construction of Revolution Wind, and we are working diligently and with a strong focus to de-risk the continued project execution,” Nipper stated.
On Revolution Wind, Orsted acknowledged some construction delay related to the onshore substation, challenges related to the offshore substation monopile installation work as well as an additional contingency due to a higher risk assessment and updated market prices, but the resulting impairment was partly offset by the Sunrise Wind project being awarded a higher OREC by the State of New York in February, and recently by lower interest rates and a favourable price of the acquisition of the full ownership of the project.
Excluding new partnerships and ventures, Orsted’s operating profit fell to Dkr4.44bn ($648m) in the third quarter, down 14% from in same period last year.
But Ebitda excluding new partnerships and cancellation fees totalled DKr17.2bn in the first nine months of 2024, amounting to an underlying increase of 12% on the year, Orsted said.
The company now expects Ebitda for the full year at Dkr24-26bn, compared with its previous guidance of Dkr23-26bn.
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