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Offshore Wind Firm Orsted Beats Profit Forecasts

April 29, 2020

An Orsted offshore wind farm - Credit: Orsted

Orsted beat first-quarter profit expectations on Wednesday and said the coronavirus would not "materially" hit earnings this year although it might slow U.S. projects.

The world's largest offshore wind developer said it did not expect the coronavirus outbreak to "significantly impact our earnings for the year" while it stuck to its outlook for EBITDA excluding new partnerships this year of 16-17 billion crowns.

The Danish company is in the midst of a $30 billion investment program as it seeks to become one of a handful of future "renewable majors" leading a shift away from fossil fuels.

It said all of its construction projects remain on track but acknowledged an increased risk of delays from suppliers of components and services.

Orsted added that projects in the United States, its most important growth market, were moving forward at a slower pace than expected and that its two earliest projects off the coast in Maryland and New York would be pushed back by around a year.

The delays to these projects and others in its pipeline were mainly due to an ongoing analysis of the build-out of offshore wind by the Bureau of Ocean Energy Management’s (BOEM) and the impact from COVID-19-related shutdowns in states like New York.

First-quarter earnings before interest, taxation, depreciation, and amortization (EBITDA) rose 33% to 6.8 billion Danish crowns ($989 million), beating the 5.85 billion forecast by 10 analysts in a poll compiled by Orsted.

The beat was driven by a 25% increase in earnings from its operating onshore and offshore wind farms on the back of a ramp-up of new sites and high European wind speeds.

($1 = 6.8754 Danish crowns) 

(Reporting by Stine Jacobsen; editing by Jason Neely)

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