Ørsted’s Profit Down 52 Per Cent in Q1 2021

Ørsted has reported a net profit of DKK 1.6 billion (EUR 215 million) for the first quarter of 2021, a 52 per cent decrease from DKK 3.3 billion from the same period last year.

The Danish company saw an operating profit (EBITDA) of DKK 4.9 billion (EUR 659 million) for Q1 2021, a DKK 1.9 billion decrease compared to Q1 2020.

The decrease is mainly due to high earnings from the construction agreement related to the Hornsea 1 transmission assets in Q1 2020 not being repeated, as well as lower wind speeds across the offshore portfolio.

Ørsted added that the lower profit has also been impacted by a DKK 0.8 billion warranty provision related to cable protection system issues at some offshore wind farms across the UK and Continental Europe.

The issue, which could concern up to 10 wind farms, occurs when the CPS moves across the scour protection, abrading the cable protection and in the worst-case scenario causing the cables to fail.

Despite wind speeds being below a normal wind year, Ørsted reported that power generation from offshore and onshore wind increased by 7 per cent and totaled 6.1 TWh in Q1 2021.

Production-based availability for Offshore amounted to 95 per cent, up two percentage points compared to the same period last year, mainly because of low availability in Q1 2020, driven by Hornsea 1 and Borkum Riffgrund 2 due to a cable replacement campaign and outages, respectively.

Net profit amounted to DKK 1.6 billion and return on capital employed (ROCE) came in at 7.5 per cent.

The operations and financial performance continued to remain solid despite the COVID-19 pandemic, the company said, adding that it maintains its full-year EBITDA guidance of DKK 15-16 billion.

“Ørsted’s operational performance was good during Q1 2021 and slightly exceeded our expectations, and we’ve reached multiple strategic milestones,” said Mads Nipper, Group President and CEO of Ørsted.

“In our Offshore business, the Polish Baltica 2 & 3 projects with a total capacity of up to 2.5 GW were awarded contracts for difference and we’ve entered a new partnership in the Baltic States. We also signed an agreement to farm down 50 % of Borssele 1 & 2.”