Ørsted (ORSTED) Q2 2024 earnings summary

Executive summary

• Q2 2024 EBITDA excluding new partnerships and cancellation fees reached DKK 5.3 billion, up 59% year-over-year, driven by strong offshore wind performance and higher wind speeds.

• Around 2 GW of renewable capacity was commissioned in the quarter, supporting the 2030 target of 35-38 GW installed capacity.

• Strategic decisions included ceasing the FlagshipONE liquid e-fuels project, de-prioritizing the liquid e-fuels market, and divesting the French onshore platform and shares in four U.S. onshore projects.

• Impairments and cancellation fees, mainly related to Revolution Wind, FlagshipONE, and Ocean Wind, totaled DKK 3.9 billion, with a DKK 2.1 billion impairment from Revolution Wind's delay.

• The business plan remains fully funded to 2030, with long-term financial targets unchanged and credit metric recovery targeted by 2026.

Financial highlights

• Offshore site earnings rose 40% year-over-year to DKK 4.4 billion, mainly from new wind farms and higher wind speeds.

• Q2 2024 EBITDA (excluding new partnerships and cancellation fees) was DKK 5.3 billion, up 59% from Q2 2023.

• Net profit adjusted for cancellation fees and impairments was DKK 800 million, up DKK 1.3 billion year-over-year; reported net profit was -DKK 1.7 billion due to impairments.

• Operating cash flow increased to DKK 6.1 billion, up 149% year-over-year.

• Gross investments in Q2 totaled DKK 8.3 billion; divestment proceeds were DKK 3 billion.

Outlook and guidance

• Full-year 2024 EBITDA guidance maintained at DKK 23-26 billion, excluding new partnerships and cancellation fees.

• Gross investment guidance for 2024 lowered by DKK 4 billion to DKK 44-48 billion due to timing effects.

• Offshore earnings expectations upgraded to 'neutral', while Bioenergy & Other segments were raised due to improved trading and wind speeds.

• Targeted FFO to adjusted net debt ratio above 30% by end of 2026; Q2 2024 stood at 23%.