TIDM44ZX
Orsted A/S
30 January 2020
Annual report 2019
Strong year with continued strategic progress, global expansion
and very satisfactory financials
Today, Ørsted's Board of Directors approved the annual report
for 2019. Operating profit (EBITDA), excluding new partnerships,
increased by 17% to DKK 17.5 billion, thus exceeding our
expectations at the beginning of the year as well as our most
recent guidance of DKK 16-17 billion.
Earnings from offshore and onshore wind farms in operation
increased by 30% to DKK 14.8 billion in 2019 driven by ramp-up of
generation from new offshore wind farms and a full year with
contribution and ramp-up in our onshore wind business. In addition,
our year-on-year development was positively impacted by higher
earnings from our trading activities and the reversal of a
provision related to the Elsam competition case. This was partly
offset by the increase in provisions related to our LNG activities,
higher project development costs and a temporarily negative effect
from our gas at storage due to the substantial drop in gas prices
during 2019. In 2018, we also had a positive outcome of a gas
sourcing arbitration case which was not repeated in 2019.
The increase compared to our most recent guidance was mainly due
to strong offshore generation in December, better than expected
performance from our trading activities, less negative effect from
the value of our gas at storage and lower costs across the group.
This was partly offset by the provision related to our loss-making
LNG activities, which we signed an agreement to divest in
December.
Net profit amounted to DKK 6.1 billion, and return on capital
employed (ROCE) came in at 10.6%.
Our credit metric, FFO/adjusted net debt, ended at 31%, in line
with our financial policy of being around 30%.
The Board of Directors recommends a dividend of DKK 10.5 per
share (DKK 4.4 billion in total), up 7.7% and in line with our
dividend policy.
The green share of our heat and power generation continued to
increase to a new high of 86%, following continued ramp-up of our
offshore wind capacity, new onshore capacity and lower heat and
power generation based on coal and gas.
Henrik Poulsen, CEO and President of Ørsted, says:
"2019 was a great year for Ørsted with continued strategic
progress and global expansion. We achieved a very satisfactory
operating profit (EBITDA), and the green share of our heat and
power generation increased to a new high of 86%.
We reached significant milestones by winning two large-scale
offshore projects in the US. We were awarded 1,100MW with our Ocean
Wind project in New Jersey and 880MW with our Sunrise Wind project
in New York. With these awards, we have secured a US offshore wind
portfolio with a total capacity of 2.9GW to be completed towards
2024. In addition, we have up to 4.5GW of lease rights which can be
developed for future offshore wind projects in the US. The Sunrise
Wind project will be constructed together with our partner
Eversource. For Ocean Wind, we are in exclusive negotiations with
the Public Service Enterprise Group (PSEG) regarding a joint
venture agreement to acquire 25% of the project.
In the UK, we commissioned Hornsea 1, the world's largest
offshore wind farm with a capacity of 1,218MW. We passed further
milestones when we inaugurated phase two of Taiwan's first-ever
offshore wind farm Formosa 1, and when we commissioned the onshore
wind farm Lockett in Texas in the US.
During 2019, we took final investment decision (FID) on a number
of projects. In Taiwan we decided to build the 900MW offshore wind
farm Greater Changhua 1 & 2a, and we decided to build the
onshore wind farms Sage Draw (338MW), Plum Creek (230MW) and Willow
Creek (103MW) as well as the combined solar (420MW) and storage
(40MW) project Permian Energy Center in the US.
We signed an agreement to divest our Danish power distribution
(Radius), residential customer and city light businesses to
SEAS-NVE. The agreement ensures an attractive transaction for
Ørsted's shareholders and provides a good future home for the
customers and our highly skilled employees. We will use the
proceeds from the divestment to continue our global investments in
green energy. We expect that the transaction will be closed in the
first half of 2020.
To further focus our activities, we entered into an agreement to
divest our LNG activities to Glencore and initiated a process to
divest the majority of our B2B sales business.
We remain strongly committed to our vision of a world running
entirely on green energy and will continue to work hard to help
limit global warming and its impact on biodiversity and global
living conditions for current and future generations."
Financial key figures for Q4 and 2019:
DKK million Q42019 Q42018 % 2019 2018 %
============================== ======== ========= ======= ========= ========= =======
EBITDA 4,613 19,206 (76%) 17,484 30,029 (42%)
Profit (loss) for the period
from cont. operations 925 15,160 (94%) 6,100 19,486 (69%)
Profit (loss) for the period
from discount. Operations (29) 34 n.a. (56) 10 n.a.
Profit (loss) for the year 896 15,194 (94%) 6,044 19,496 (69%)
Cash flows from operating
activities 4,816 7,565 (36%) 13,079 10,343 26%
Gross investments (8,816) (14,916) (41%) (23,305) (24,481) (5%)
Divestments 402 18,749 (98%) 3,329 19,950 (83%)
Free cash flow (3,598) 11,398 n.a. (6,897) 5,812 n.a.
Net interest-bearing debt 17,230 (2,219) n.a. 17,230 (2,219) n.a.
FFO/adjusted net debt 31% 69% (38%p) 31% 69% (38%p)
ROCE 11% 32% (22%p) 11% 32% (22%p)
============================== ======== ========= ======= ========= ========= =======
Outlook 2020
EBITDA (business performance), excluding new partnerships, is
expected to be DKK 15-16 billion in 2020 compared to DKK 17.5
billion in 2019. The decline relates to earnings from existing
offshore wind partnerships which amounted to DKK 3.8 billion in
2019, but are expected to be very limited in 2020.
Gross investments for 2020 are expected to amount to DKK 30-32
billion, reflecting a high level of construction activity related
to offshore and onshore wind and solar PV projects.
For further information, please contact:
Media Relations Investor Relations
Martin Barlebo Allan Bødskov Andersen
+45 99 55 95 52 +45 99 55 79 96
Conference call
In connection with the presentation of the annual report, a
conference call for investors and analysts will be held on
Thursday, 30 January 2020 at 14:00 CET.
Denmark: + 45 78 15 01 09
UK: + 44 33 33 00 92 70
US: + 1 833 526 8384
The conference call can be followed live at:
https://edge.media-server.com/mmc/p/v6offu8x
Presentation slides will be available prior to the conference
call at:
orsted.com/en/Financial-reports-and-presentations
The annual report is available for download at:
orsted.com/en/Financial-reports-and-presentations
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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