Orsted Q3 2024 $ORSTED (-0.3%)

Financial performance

• Revenue: Total revenue in the first nine months of 2024 amounted to DKK 49,957 million, compared to DKK 57,725 million in the same period in 2023, indicating a decline.
• EBITDA: EBITDA increased to DKK 23,606 million compared to DKK 19,403 million, an increase of 22%.

Balance sheet overview

• Total assets: As of September 30, 2024, total assets amounted to DKK 290,341 million.
• Equity: Equity stood at DKK 91,127 million, an increase from DKK 77,791 million at the end of 2023.
• Net interest-bearing debt: This increased to DKK 62,817 million, up from DKK 47,379 million at the end of 2023.

Income overview

• Operating profit (EBIT): EBIT amounted to DKK 12,516 million, a significant improvement compared to a loss of DKK 16,448 million in the first nine months of 2023.
• Net profit: Profit for the period was DKK 6,100 million compared to a loss of DKK 19,026 million in the previous year.

Cash flow overview

• Cash flow from operating activities: This amounted to DKK 8,050 million, compared to DKK 22,362 million in the first nine months of 2023.
• Free cash flow: A negative free cash flow of DKK 15,281 million was recorded, compared to a negative cash flow of DKK 3,427 million in 9M 2023.

Key figures and profitability ratios

• Return on capital employed (ROCE): Improved to 8.1% from -13.7%.
• FFO/Adjusted net debt: This fell to 12.6% from 20.9%.

Segment information

• Offshore: EBITDA in the Offshore segment amounted to DKK 19,831 million, an increase of 21% compared to 9M 2023.
• Onshore: EBITDA amounted to DKK 2,802 million, compared to DKK 2,445 million.
• Bioenergy & Other: EBITDA increased to DKK 213 million, a significant increase compared to DKK 89 million.

Competitive position

Ørsted remains a leader in renewable energy with significant investments in offshore and onshore wind projects, consolidating its strong market position.

Forecasts and management commentary

• Strategic ambitions: Target to reach 35-38 GW of installed renewable capacity offshore and 11-13 GW onshore by 2030.
• Financial outlook for 2024: EBITDA, excluding new partnerships and cancellation fees, is expected to be between DKK 24-26 billion.

Risks and opportunities

• Market risks: Exposure to market, credit and liquidity risks, with a focus on stabilizing key rating metrics.
• Opportunities: Continued investments in renewable energy projects and strategic divestments to optimize the portfolio.

Summary of the findings

Ørsted has shown a strong financial performance in the first nine months of 2024, with significant improvements in EBITDA and EBIT. The company continues to invest heavily in renewable energy projects, securing a competitive advantage in the industry. Nevertheless, there are challenges in managing cash flows and net debt. The strategic focus on expanding renewable capacity by 2030 is in line with global sustainability targets and offers both opportunities and risks in terms of implementation.

Positive aspects

• EBITDA growth: Ørsted's EBITDA increased by 22% to DKK 23,606 million in the first nine months of 2024, compared to DKK 19,403 million in the same period in 2023, indicating strong operational performance and effective cost management.
• Performance in the offshore segment: The Offshore segment reported EBITDA of DKK 19,831 million, an increase of 21% compared to the previous year. This growth resulted from higher revenues from CfD contracts, ROCs and green certificates.
• Reduction in Scope 1 greenhouse gas emissions: A significant 47% reduction in Scope 1 emissions was achieved, mainly due to a 53% decrease in coal consumption in power plants.
• Strategic capacity expansion: Ørsted has set ambitious targets to expand renewable capacity to 35-38 GW offshore and 11-13 GW onshore by 2030, which is in line with global sustainability targets.
• Improved return on capital employed (ROCE): ROCE improved to 8.1% from -13.7%, indicating better capital utilization and improved profitability.

Negative aspects

• Decline in sales: Total revenue decreased to DKK 49,957 million compared to DKK 57,725 million in the same period in 2023, indicating challenges in maintaining revenue growth.
• Increase in net interest-bearing debt: Net interest bearing debt increased to DKK 62,817 million, from DKK 47,379 million at the end of 2023, which could affect financial flexibility.
• Negative free cash flow: The company recorded a negative free cash flow of DKK 15,281 million, compared to a negative cash flow of DKK 3,427 million in 9M 2023, indicating challenges in cash flow management.
• Lower availability in the offshore wind segment: Availability in the offshore segment amounted to 89%, a decrease of 4 percentage points year-on-year, due to planned maintenance work on Hornsea 1 and 2.
• Increase in Scope 3 emissions: Scope 3 greenhouse gas emissions increased by 63% due to emissions from capital goods related to the commissioning of new turbines.