Orsted’s (Copenhagen:ORSTED) shift from black to green energy is continuing to pay off. Excluding new partnerships, cash profits (Ebitda) rose by 17 per cent to DKr17.5bn (£1.97bn) in 2019, exceeding the company’s guidance of DKr16bn-17bn. With strong generation in December, cash profits from offshore wind farms in operation jumped by 22 per cent to DKr13.8bn.
A strategy of ‘farming down’ its assets involves divesting stakes in its wind farms to partners and receiving money over time. Partnership agreements brought in DKr3.8bn last year, largely relating to selling a 50 per cent stake in Hornsea 1 to Global Infrastructure Partners in 2018. But with no new partnerships signed last year, income from ‘farm-downs’ is expected to be “very limited” in 2020, pushing down overall cash profits (excluding new partnerships) to DKr15bn-16bn.
With DKr15.1bn spent on offshore wind farm construction, gross investment amounted to DKr23.3bn and is projected to rise to DKr30bn-32bn in 2020. Including DKr5.9bn in lease liabilities, the group has swung to a DKr17.2bn net debt position from DKr2.2bn of net cash. However, at 31 per cent, funds from operations as a proportion of adjusted net debt is in line with the group’s 30 per cent target.
Bloomberg consensus forecasts are for adjusted pre-tax profit at DKr15.9bn and EPS at DKr20.2 in 2020, up from DKr8.9bn and DKr14.5 in 2019.
| ØRSTED A/S (CPSE:ORSTED) | ||||
| ORD PRICE: | DKr735.6 | MARKET VALUE: | £3.1bn | |
| TOUCH: | DKr735.6-736 | 12-MONTH HIGH: | DKr754 | LOW: DKr432 |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 47 | |
| NET ASSET VALUE: | DKr174 | NET DEBT: | 13%* | |
| Year to 31 Dec | Turnover (DKr bn) | Pre-tax profit (DKr bn) | Earnings per share (DKr) | Dividend per share (DKr) |
| 2015 | 66.71 | 1.7 | 2.7 | nil |
| 2016 | 57.39 | 12 | 24.1 | 6.0 |
| 2017 | 59.71 | 15.1 | 30.0 | 9.0 |
| 2018 | 75.52 | 22 | 42.4 | 9.8 |
| 2019 | 70.40 | 10 | 15.6 | 10.5 |
| % change | -7 | -53 | -63 | +8 |
| Ex-div: | 3 March | |||
| Payment: | 5 March | |||
| £1 = DKr8.88, *Excludes Dkr5.9bn in lease liabilities | ||||
