Ørsted reports 15% drop in profits for Q1 2019

Umar Ali 1 May 2019 (Last Updated May 1st, 2019 12:54)

Ørsted has announced its results for the first quarter (Q1) of 2019, reporting a decrease in profits despite “generally strong performance.”

Ørsted reports 15% drop in profits for Q1 2019
Energy ministers in the North Sea extend collaboration on offshore wind energy. Credit: Ørsted.

Danish wind energy company Ørsted has announced its results for the first quarter (Q1) of 2019, reporting a decrease in profits despite “generally strong performance.”

The company’s operating earnings before interest, tax, depreciation and amortization (EBITDA) for Q1 2018 was $766m (DKK5.1bn), a 7% decrease from Q1 2018’s EBITDA of DKK5.5bn. Ørsted   attributes this drop in profits to a “positive one-off compensation” in Q1 2018 as well as lower earnings from its gas portfolio.

This decrease was offset by a 13% increase in earnings from offshore wind farms in operation and earnings from new onshore wind farms.

The company also reported a 5% increase on return on capital employed compared to Q1 2018, as well as an increase in the “green share” of heat and power generation to 80% from 68% in Q1 2018.

Ørsted   are currently in auctions for five offshore wind farms, with three in the US and two in Europe. In a conference call Ørsted CFO Marianne Wiinholt said these bids represented “significant growth in offshore wind”, noting that oil and gas majors such as Shell and Equinor are “eager” to invest in this developing market.

Ørsted CEO and president Henrik Poulsen said: “We delivered strong results in line with expectations. Our full-year guidance remains unchanged.

“During the first quarter we have continued to strengthen our portfolio within both Offshore and Onshore.

“We remain very pleased with the operational and financial performance of the company as we continue to expand our position as a global leader in green energy.”

Ørsted’s guidance for 2019 remains unchanged from its plans set out in 2018. The company expects an EBITDA of DKK15.5-16.5bn ($2.3-2.5bn), with expected gross investments of DKK21-23bn ($3.2-3.5bn).