Offshore Wind: Orsted Earnings, Shares Dented by Lower Wind Speeds, Cable Problems

By Tim Barsoe
Thursday, April 29, 2021

Lower wind speeds and cable problems hit first-quarter earnings at Denmark's Orsted , sending shares in the world's biggest offshore wind farm developer lower on Thursday.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at 4.9 billion Danish crowns ($799 million), missing analysts' consensus forecast of 5.2 billion crowns.

However, Chief Executive Mads Nipper said the company's operational performance "was good during Q1 2021 and slightly exceeded our expectations".

Nipper took the helm in January. His predecessor, Henrik Poulsen, stepped down after leading the energy company's transformation away from fossil fuels.

Orsted said quarterly earnings suffered from significantly lower wind speeds compared to last year, and a warranty provision of 800 million crowns made after it discovered cable problems at its offshore wind farms in Europe.

Investigations into the extent of the issue are ongoing, Chief Financial Officer Marianne Wiinholt told a media briefing, but added the problem was limited to ten offshore wind farms at most. They are in the United Kingdom and Continental Europe and equipped with a cable protection system Orsted no longer uses.

Orsted estimated fixing the problems could cost 3 billion crowns in total between 2021 and 2023.

Sydbank analyst Per Fogh described the issue as a "significant expense", but said Orsted's underlying business was doing well, despite earnings coming in below expectations.

Orsted shares were down 3.8% at 0929 GMT, having dropped more than 30% since an early January high.

Citi analyst Jenny Ping said the results could dampen hopes of upgrades this year. Citi has a "sell" rating on the shares.

Orsted kept its full-year guidance and said it would present an updated strategy with new long-term targets on June 2.

(Reuters reporting by Tim Barsoe. Editing by Simon Cameron-Moore and Mark Potter)

Categories: Energy Offshore Energy Renewable Energy Industry News Offshore Wind Financial

Related Stories

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Wood JV Gets EPC Job for Shell off Brunei

Fugro Expands Geotechnical Testing Capabilities in Indonesia

UK Firm Secures Exploration Extension for Two Blocks off Vietnam

Fugro Lands Deepwater Gas Field Job in Southeast Asia

VARD Snags $125M Shipbuilding Deal for Subsea Construction Vessel

Woodside to Shed Some Trinidad and Tobago Assets for $206M

ORE Catapult and Japan’s FLOWRA to Jointly Advance Floating Wind

China Unveils Plans for New Offshore Wind Farms to Tackle Carbon Emissions

Current News

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com