Ørsted (ORSTED) Q4 2024 earnings summary

Executive summary

• 2024 EBITDA excluding new partnerships and cancellation fees reached DKK 24.8 billion, in line with guidance, with net reversal of DKK 7.3 billion in cancellation fees and DKK 15.6 billion in impairments, mainly from the US offshore wind portfolio.

• New CEO Rasmus Errboe emphasized a disciplined approach to capital allocation, reducing projected investments toward 2030 by approximately 25% and prioritizing value over volume, especially in offshore wind.

• 1.0 GW offshore and 1.4 GW onshore capacity commissioned; 3.5 GW awarded in UK AR6; closure of last coal-based plant and significant progress on divestments with DKK 22 billion proceeds.

Financial highlights

• FY 2024 EBITDA (excluding new partnerships/cancellation fees) was DKK 24.8 billion, up 3% year-over-year, and DKK 32 billion including new partnerships and cancellation fees.

• Offshore EBITDA up 92% to DKK 26.5 billion; Onshore EBITDA up 30% to DKK 3.9 billion; Bioenergy & Other down 29% to DKK 1.1 billion.

• Operating profit (EBIT) at DKK 6.2 billion, reversing a loss in 2023; net profit at DKK -6.1 billion due to impairments.

• Free cash flow improved to DKK 1.5 billion from DKK -8.4 billion in 2023.

• FFO to net debt ended 2024 at 13%, below the >30% target.

Outlook and guidance

• 2025 EBITDA (excluding new partnerships/cancellation fees) expected at DKK 25-28 billion, with growth driven by ramp-up generation in offshore assets and compensation for grid delays.

• By 2026, EBITDA is expected to reach DKK 29-33 billion, implying a 12% CAGR.

• ROCE for the period to 2030 is revised to around 13-14%, reflecting lower investments but higher costs and delays in U.S. projects.

• Gross investments for 2025 are projected at DKK 50-54 billion; DKK 210-230 billion for 2024-2030.

• No dividend payout for 2023-2025; target to reinstate dividend for 2026.