Orsted recorded over Dkr3bn (€400m) in net profits in the first quarter of this year boosted by its expanding offshore and onshore wind farm portfolio. Net profit rose 27% compared with the same period in 2019.
Earnings before interest, tax, depreciation and amortisation (EBITDA) reached Dkr6.8bn (€905m) in the first quarter of this year, compared with Dkr5.1bn in the same period in 2019, a 33% increase.
Earnings from operational offshore and onshore wind farms increased by 25% to Dkr5.2bn, driven by ramp-up of generation from the 1200MW Hornsea 1 offshore wind farm in the UK, and the 184MW Lockett and the 338MW Sage Draw onshore wind farms in the US.
High wind speeds in the period helped boost output, said Orsted.
On 4 March 2020 Orsted increased its EBITDA guidance from Dkr15-16bn to Dkr16-17bn due to “updated assumptions regarding the divestment of the transmission asset for Hornsea 1”. The developer said that at this time it has “no indication” that the COVID-19 situation will significantly impact earnings for the year.
“Thus we reiterate our most recent EBITDA guidance of Dkr16-17bn in 2020. We also re-iterate our expectation of gross investments of Dkr30-32bn in 2020,” stated the developer.
Orsted chief executive Henrik Poulsen said: “Despite the COVID-19 crisis and its profound impact on societies around the world, we have had a very good start to the year with strong financial results and solid operational performance across the entire business.
“We activated our Corporate Crisis Management Organisation in early March to steer Orsted through the global COVID-19 crisis. Our focus has been on the health and well-being of our employees and their families and the communities we are part of.
“During the last couple of months, our asset base has been fully operational with availability rates for our wind farms and power stations within the normal range.”
All the developer’s construction projects remain on track.
“However, across our projects, we see an increased risk of component and service delays from suppliers impacted by COVID-19,” said Orsted.
The developer said it is collaborating closely with its partners to mitigate these situations without compromising health and safety standards.
“Based on our current outlook, we believe the COVID-19 related impact on our construction projects will be limited both in terms of timing and economics,” Orsted stated.
Orsted said its offshore development projects in the US are moving forward, although at a “slower pace than originally expected” due to a combination of the Bureau of Ocean Energy Management’s (BOEM) analysis of the cumulative impacts from the build out of US offshore wind projects and COVID-19 impacts.
The two earliest projects in its pipeline, the 120MW Skipjack off Maryland and the 130MW South Fork project off New York, are most exposed to the risk of delays, said Orsted.
“For Skipjack it is no longer realistic to receive the ‘Notice of Intent’ from BOEM in due time to meet commissioning date in late 2022. Therefore, we now expect to commission the wind farm approximately one year later,” the developer stated.
Orsted has now received the ‘Notice of Intent’ for South Fork, which was also planned for a 2022 commissioning, but has not yet received a confirmed permit schedule from BOEM outlining when the construction and operations plan for the project will be received.
Orsted said it also foresees an “increased risk of delays” for its Revolution Wind, Ocean Wind, and Sunrise Wind US offshore projects, which were expected to be commissioned in 2023 and 2024.
COP applications for Ocean Wind and Revolution Wind have been submitted and Orsted is awaiting BOEM to issue their ‘Notices of Intent’, outlining the timeline for COP approval.
COVID-19 restrictions prevent the developer from progressing offshore site surveys for Sunrise Wind off New York, which will “adversely impact” its COP application process.
Orsted stated: “So, for these three projects, we need more visibility on the path to COP approval before concluding whether commissioning in 2023-24 remains realistic. We expect to have more clarity after summer.”
Meanwhile the company has decided to initiate a share buy-back programme to meet obligations arising from its share-based incentive programmes.
The share buy-back programme will run from 29 April 2020 to 12 May 2020.
Orsted said it may repurchase up to 84,000 shares, corresponding to 0.02% of the current share capital of the company, subject to a maximum total purchase price of Dkr66m.