Ørsted presents operating profit (EBITDA) for 2022 based on preliminary and unaudited reporting.
It has been a year with unusual market conditions, not least very volatile energy prices and a substantial increase in inflation. Despite this, we achieved 2022 results (EBITDA) within our latest guidance from 3 November 2022 and above our initial expectations for the year.
EBITDA including new partnership agreements is expected to total DKK 32.1 billion in 2022, our highest EBITDA to date, of which the gain from the 50 % farm-downs of Hornsea 2 and Borkum Riffgrund 3 amounted to DKK 11.0 billion in total.
EBITDA excluding new partnership agreements is expected to be DKK 21.1 billion, an increase of DKK 5.3 billion compared to 2021. We benefitted from our diverse portfolio and achieved significantly higher earnings from our onshore wind and solar PV business, our combined heat and power plants, and our gas activities than expected at the beginning of the year, while earnings in Offshore decreased. The unexpected decrease in Offshore was primarily due to adverse impacts from hedges, and delays at our Hornsea 2 and Greater Changhua 1 & 2a construction projects.
Impairment of Sunrise Wind
As a result of project-specific CAPEX increases, an unprecedented cost inflation, and rapidly rising interest rates in 2022, we will recognise an impairment of DKK 2.5 billion on our 50 % owned US-based offshore wind development project Sunrise Wind in 2022.
EBITDA outlook for 2023
EBITDA excluding new partnership agreements is expected to be DKK 20-23 billion in 2023. Our EBITDA guidance assumes significantly higher earnings in Offshore, the same level in Onshore, and significantly lower earnings in Bioenergy & Other compared to 2022.
Mads Nipper, Group President and CEO of Ørsted, says:
“In a year with unusual market conditions, not least the very volatile energy prices and a substantial increase in inflation, we’re happy to achieve a record-high EBITDA for 2022 within our latest guidance and above our initial expectations for the year. The composition and development of our earnings mix was significantly different than expected and once again showed the benefits from having a diverse portfolio.
We expect that earnings from our operational renewable energy assets will increase significantly in 2023 and contribute to reaching a Group EBITDA excluding new partnerships of DKK 20-23 billion, and we remain confident in our long-term financial estimates and growth ambitions.”
Daniel Lerup, CFO of Ørsted, says:
“During the year, we have seen adverse impacts from overhedging, ineffective hedges, and delays at Hornsea 2 and Greater Changhua 1 & 2a, which is not satisfactory. As a response to the unintended impacts from hedges, we have established and are in the process of implementing a new risk management framework to reduce the volatility from financial instruments and bring back the inherent predictability of earnings that our contracted and regulated activities possess.”