Orsted, the Danish renewable energy company, has reported a 27% drop in operating profit (EBITDA) for the first quarter of 2023. The company's EBITDA for the period was DKK6.9bn (€925m), which is DKK2.5bn lower than Q1 2022. The prior year's figures had been positively impacted by the DKK1.6bn farm down of Borkum Riffgund 3.
Lower power prices and the introduction of a revenue cap in I&UK also had an impact on the company's performance during the quarter. The earnings from offshore sites amounted to DKK5.9bn, which is an increase of DKK2.2bn compared to the previous year. Onshore business saw an increase in generation of 17%, primarily due to the ramp-up of generation from new assets.
Despite the challenging quarter, Orsted maintained its EBITDA guidance of DKK20-23bn, excluding earnings from new partnerships during the year. Chief Financial Officer, Daniel Lerup, acknowledged the impact of lower power prices, stating, “We have seen a significant decline in power prices in Northern Europe and the UK, and we expect that trend to continue.”
Orsted's Group President and Chief Executive, Mads Nipper, however, remained positive about the results, stating, “We're pleased with the Q1 2023 results where our offshore sites earnings are back on track as the key EBITDA driver.” He added that the construction of the company's current wind and solar assets is progressing according to plan.
Nipper also highlighted some significant strategic milestones during the quarter, such as taking the final investment decision on Greater Changhua 2b and 4 offshore wind farms in Taiwan, which have a total capacity of 920MW. “Greater Changhua 2b and 4 have a robust business case, which will create long-term value for Orsted,” he said.
Orsted's joint venture project, the 100MW Salamander, won a Scottish floating wind lease, which Nipper described as a “tangible step to making floating wind a reality.” The company also acquired the 160MW early-stage Irish solar development project Garreenleen, which will bring its Irish portfolio to a total capacity of 576MW.
Despite the challenges faced during the quarter, Orsted remains committed to its goal of becoming a carbon-neutral company by 2025. “Our vision is a world that runs entirely on green energy,” Nipper said. “And we will continue to work tirelessly towards achieving that goal.”
