Ørsted’s Board of Directors has approved the interim report for the first half-year (H1) of 2020. The 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 return on capital employed (ROCE) came in at 11%. The green share of the company’s heat and power generation increased from 82% to 88%. The company’s EBITDA guidance is unchanged relative to the guidance in its interim financial report for Q1 2020, and thus the company re-iterate its EBITDA guidance of DKK 16-17 billion in 2020. The company lowers its expectation to gross investments by DKK 2 billion to DKK 28-30 billion in 2020 due to changed timing of payments.
The company has 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 its Q2 earnings was approximately DKK 150 million. A contained impact which does not change the company’s full-year expectations.
The company’s construction projects have largely progressed according to plans, both in Europe, Asia, and the US. The part of its 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 the company still expect to be able to complete both projects within budget and time schedule, the company sees increased risk of delays; especially at Hornsea 2. However the company expects any delays to have a limited overall impact on project economics.
