Ørsted Expects Pickup in Wind Speeds to Lift Earnings

Jacob Gronholt-Pedersen
Wednesday, February 2, 2022

Renewable energy company Ørsted on Wednesday missed fourth-quarter operating profit expectations, but said it expected a boost in earnings as wind speeds should return to normal this year after an unusually calm 2021.

Ørsted's shares rose by as much as 6% at opening and were trading 1.7% higher at 0831 GMT.

Ørsted, which builds and operates wind farms, was hit last year by slower than usual winds during the first nine months, although wind speeds in the fourth quarter returned to normal for the period, it said on Wednesday.

For this year, it expects earnings before interest, tax, depreciation and amortisation (EBITDA) excluding new partnerships of 19-21 billion crowns, compared to the 15.8 billion crowns ($2.40 billion) it achieved last year and the 20 billion crowns expected by analysts.

Despite increased competition, including from oil majors, Ørstedsaid it had secured a quarter of the offshore wind capacity offered in auctions and tenders last year, equivalent to 4.5 gigawatts.

"This strongly solidifies our global leadership position and proves our ability to differentiate and compete in offshore wind despite increasing competition," Chief Executive Mads Nipper said in a statement.

BP last month hired an Ørsted executive to head a new offshore wind division.

Soaring power prices towards the end of last year had a limited impact on Ørsted's results, because profits from wind and solar generation are locked in through subsidy contracts and long-term power purchase agreements.

However, it saw a nearly four-fold increase in profits from its combined heat and power plants.

Ørsted also said the fourth quarter was boosted by the divestment of a stake in a Taiwanese wind farm Greater Changhua 1.

The Danish company said EBITDA, including new partnerships, was 8.25 billion crowns in the fourth quarter, up 65%, but below the 8.58 billion crowns expected by analysts in a poll compiled by the company.

Ørsted proposed a dividend payout for 2021 of 12.5 crowns per share, or 5.3 billion crowns in total. 

($1 = 6.5979 Danish crowns) 

(Reporting by Jacob Gronholt-Pedersen; editing by Jason Neely, Louise Heavens and Barbara Lewis)


Categories: Energy Renewable Energy Offshore Wind Activity Renewables

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