TIDM44ZX
Orsted A/S
12 August 2020
Interim report for the first half year 2020
Strong first half
Today, Ørsted's Board of Directors approved the interim report
for the first half-year (H1) of 2020. Our operating profit (EBITDA)
amounted to DKK 9.8 billion, an 11% increase compared to the same
period last year.
Earnings from offshore and onshore wind farms in operation
increased by 17% to DKK 8.2 billion driven by 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 and r eturn on capital
employed (ROCE) came in at 11%.
The green share of our heat and power generation increased from
82% to 88%.
Our EBITDA guidance is unchanged relative to the guidance in our
interim financial report for Q1 2020, and thus we re-iterate our
EBITDA guidance of DKK 16-17 billion in 2020. We lower our
expectation to gross investments by DKK 2 billion to DKK 28-30
billion in 2020 due to changed timing of payments.
Henrik Poulsen, CEO and President of Ørsted, says:
"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 increased risk of delays; especially at Hornsea 2. We expect
any delays to have a limited overall impact on project
economics.
During the second quarter we achieved significant strategic
results.
We 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 920MW Greater Changhua 2b & 4 offshore wind farm.
In the US, the Bureau of Ocean Energy Management (BOEM) released
a draft of their Supplemental Environmental Impact Statement (SEIS)
in June. The SEIS provides an evaluation of the foreseeable
cumulative impacts of offshore wind projects on the US East Coast
and provides a framework for future development of the industry. We
are still awaiting the timeline for the approval process for our US
projects. We expect to have more clarity during the second half of
the year.
At the 12MW Coastal Virginia demonstration project in the US,
which we are constructing for Dominion Energy, we successfully
installed both monopile foundations and turbines in June. The wind
farm is the first ever in US federal waters.
We commissioned the 230MW onshore wind farm Plum Creek in
Nebraska ahead of schedule and on budget, and we received tax
equity funding from our partners.
We acquired the 227MW(ac) solar PV project Muscle Shoals,
located in Alabama. When completed, expectedly in Q3 2021, it will
be the largest solar farm in south-eastern US.
Together with Copenhagen Airport, A.P. Moller - Maersk, DSV
Panalpina and SAS, we have founded the partnership - 'Green fuels
for Denmark' - to develop an industrial-scale production facility
to produce sustainable fuels for road, maritime and air transport
in the Copenhagen area. The partnership brings together the demand
and supply side of sustainable fuels with a vision to realise what
could become one of the world's largest electrolyser and
sustainable fuel production facilities.
Together with nine partners, we secured funding for the
renewable hydrogen project WESTKÜSTE 100 as the first large-scale
hydrogen project in Germany within the Reallabor framework.
WESTKÜSTE 100 is our third hydrogen project found eligible for
public funding, and we are very excited about the prospects of
supporting heavy industries and heavy transport with clean
alternatives based on renewable hydrogen.
The world continues to navigate a health crisis which has a
severe impact on the lives and livelihoods of people across the
globe as well as on global and local economies. In this challenging
situation, Ørsted continues to focus on the health and well-being
of its employees and their families while supporting a stable power
supply in the markets where we operate. Our business model and
organisation have proven very resilient, and we remain confident
about the company's ability to deliver on both its short-term and
long-term performance targets. We continue to see strong political
and public support for an accelerated transition to green energy
and Ørsted's long-term growth prospects are as strong as ever.
"
Financial key figures for Q2 2020 and H1 2020:
DKK million Q2 2020 Q2 2019 % H1 2020 H1 2019 %
============================== ======== ======== ======= ======== ======== =======
EBITDA 2,956 3,625 (18%) 9,761 8,755 11%
Profit (loss) for the period
from cont. operations (809) 1,093 n.a. 2,537 3,732 (32%)
Profit (loss) for the period
from discount. operations (16) (18) (11%) (44) (61) (28%)
Profit (loss) for the period (825) 1,075 n.a. 2,493 3,671 (32%)
Cash flows from operating
activities 8,197 7,510 9% 7,769 7,392 5%
Gross investments (3,757) (3,368) 12% (9,065) (7,267) 25%
Divestments 45 (11) n.a. 52 2,667 (98%)
Free cash flow 4,485 4,131 9% (1,244) 2,792 n.a.
Net interest-bearing debt 22,272 4,980 347% 22,272 4,980 347%
FFO/adjusted net debt (last
12 months) 23% 58% (35%p) 23% 58% (35%p)
ROCE (last 12 months) 11% 29% (18%p) 11% 29% (18%p)
============================== ======== ======== ======= ======== ======== =======
For further information, please contact:
Media Relations Investor Relations
Martin Barlebo Allan Bødskov Andersen
+45 99 55 95 52 +45 99 55 79 96
Earnings call
In connection with the presentation of the interim report, an
earnings call for investors and analysts will be held on Wednesday,
12 August 2020 at 14:00 CEST.
Denmark: + 45 78 15 01 10
UK: + 44 333 300 9035
US: + 1 844 625 1570
The earnings call can be followed live at:
https://edge.media-server.com/mmc/p/fm7kbt6i
Presentation slides will be available prior to the earnings call
at:
www.orsted.com/en/investors/ir-material/financial-reports-and-presentations#0
The interim report is available for download at:
www.orsted.com/en/investors/ir-material/financial-reports-and-presentations#0
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NRASFUESFESSEEA
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