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Ørsted Interim / Quarterly Report 2021
3378_rns_2021-08-12_1665abda-d163-46c9-b2e0-63dc112ceeec.pdf
Interim / Quarterly Report
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Örsted
Interim financial report
First half year 2021
Örsted Interim financial report First half year 2021
Contents
Management's review
Overview
CEO's review 3
At a glance 7
Outlook 8
Results Q2 9
Results H1 11
Business units' results 14
Performance highlights 20
Quarterly overview 21
Financial statements
Consolidated financial statements
Consolidated statements of Income H1 23
Consolidated statements of Income Q2 24
Consolidated balance sheet 25
Consolidated statement of shareholders equity 26
Consolidated statement of cash flows 27
Notes
- Basis of reporting 28
- Business performance 29
- Segment information 30
- Revenue 33
- Other operating income and expenses 35
- Financial income and expenses 35
- Acquisition of enterprises 36
- Gross and net investments 37
- Reserves 37
- Tax on profit (loss) for the period 38
- Market risks 39
- Fair value measurement 40
- Interest-bearing debt and FFO 41
Management statement
Statement by the Executive Board and the Board of Directors 42
Forward-looking statements 43
Earnings call
In connection with the presentation of the interim financial report an earnings call for investors and analysts will be held on Thursday, 12 August 2021 at 14:00 CEST:
Denmark: +45 78 15 01 09
International: +44 333 300 9268
USA: +1 833 823 0590
The earnings call can be followed live here: https://edge.media-server.com/mmc/p/vps2auvq
Presentation slides will be available prior to the earnings call and can be downloaded here: orsted.com/financial-reports
Further information
Group Communication
Martin Barlebo
Tel.: +45 99 55 95 52
Investor Relations
Allan Bødskov Andersen
Tel.: +45 99 55 79 96
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Örsted Interim financial report First half year 2021
Management's review
CEO's review
Strong strategic progress in first half with a major US offshore wind project awarded, new partnerships, updated strategic ambitions, and long-term financial guidance.
Full-year EBITDA guidance maintained despite low wind speeds.
Highlights
Financials
Operating profit (EBITDA) increased by DKK 3.3 billion compared to the same period last year, amounting to DKK 13.1 billion, including a DKK 5.4 billion gain from the farm-down of Borssele 1 & 2.
Earnings from offshore and onshore wind farms in operation amounted to DKK 7.9 billion, a decrease of DKK 0.3 billion compared to the same period last year due to significantly lower wind speeds.
We reiterate our EBITDA guidance, excluding new partnerships, of DKK 15-16 billion and increase our expected gross investments to DKK 39-41 billion.
Our green share of heat and power generation amounted to 89%.
Construction and operational progress installed the first wind turbines at our 1.3 GW offshore wind farm Hornsea 2.
Commissioned Permian Energy Center in Texas, our first combined solar PV and storage facility.
Commissioned Western Trail Wind Farm in Texas.
Business development
Ocean Wind 2 awarded 1,148 MW offshore wind contract in New Jersey, fully utilising our Ocean Wind lease area.
Closed the agreement to enter into a 50/50 joint venture with PGE for the Baltica 2 & 3 projects in Poland.
Closed the agreement to acquire Brookfield Renewable Ireland, a European onshore wind platform.
Closed the agreement with Norges Bank Investment Management to farm down 50% of the 752 MW offshore wind farm Borssele 1 & 2.
Financials
Our operating profit (EBITDA) for the first half of the year amounted to DKK 13.1 billion, a DKK 3.3 billion increase compared to the same period last year. The increase was mainly due to a contribution from new partnerships from the gain of the 50% farm-down of Borssele 1 & 2 in May, which amounted to DKK 5.4 billion.
In the first half of 2021, we experienced significantly lower wind speeds than normal, especially across our offshore portfolio. Consequently, earnings from offshore and onshore wind farms in operation amounted to DKK 7.9 billion, a decrease of DKK 0.3 billion compared to H1 2020 despite ramp-up of generation from new operating assets and the addition of CfDs for the last 400 MW of capacity from Hornsea 1. We obtained solid availability rates during the first half. We also saw exceptionally good performance by our CHP plants and high earnings from our gas business.
We maintain our full-year EBITDA guidance of DKK 15-16 billion, but currently expect an outcome in the low end of the guided range. In line with previous years, our EBITDA guidance does not include earnings from new partnerships during the year, which means that the gain from the Borssele 1 & 2 farm-down and the farm-down of Greater Changhua 1 expected in Q3 is excluded from our full-year guidance.
We increase our full-year gross investment guidance from DKK 32-34 billion to DKK 39-41 billion to reflect the acquisition of Brookfield Renewable Ireland (BRI) in June and the expected acquisition of the fully constructed 302 MW onshore wind project Lincoln Land in the US later this year.
Our green share of heat and power generation amounted to 89% in H1 2021, up 1 percentage point relative to the same period last year. The development was primarily due to more wind farms in operation, partly offset by lower wind speeds and increased thermal generation of heat and power driven by higher heat demand and regulatory obligations to make all our energy capacities available to the market.
Construction and operational progress
We are currently constructing two of the largest offshore wind farms in the world, Hornsea 2 and Greater Changhua 1 & 2a, which are both on track to be commissioned in 2022.
On 27 May, we reached a significant milestone when we installed the first offshore wind turbine at our 1.3 GW wind farm Hornsea 2 off the coast of the UK. With 50 out of 165 wind turbines currently installed at the site, we now have more than 1,000 offshore wind turbines in UK waters. When commissioned in H1 2022, Hornsea 2 will become the world's largest offshore wind farm, exceeding our own Hornsea 1.
In Taiwan, construction of Greater Changhua 1 & 2a is progressing according to plan within both time and budget, but the continued
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Örsted Interim financial report First half year 2021
Management's review
dynamic COVID-19 restrictions in Taiwan could potentially impact the construction timeline. When commissioned, the 900 MW wind farm will be the largest offshore wind farm in APAC and will supply 1 million Taiwanese households with renewable energy.
The array cable issue we discovered earlier this year on several offshore wind farms across the UK and Continental Europe led us to include a warranty provision of DKK 0.8 billion in Q1 2021 to cover potential costs towards partners. Our assessments are unchanged since the publication of the Q1 2021 report and still point to a total financial impact of around DKK 3 billion across 2021 to 2023 with approx. one third expected to be capitalised.
In May, we commissioned our first large-scale combined solar PV and storage facility, Permian Energy Center, in Texas. The renewable power facility consists of a 420 MWₒₑ solar PV farm and a 40 MWₒₑ energy storage facility and showcases our ability to build and develop large-scale solar PV assets. Additionally, in August, we commissioned our greenfield wind project Western Trail in Texas. With a generation capacity of 367 MW, Western Trail is our largest onshore wind asset in operation. Earlier this year, we signed PPAs with PepsiCo, Hormel foods, and Nucor to offtake renewable power from the wind farm, which entails an attractive incremental source of stable earnings. We are currently constructing Muscle Shoals, Haystack, Old 300, and Helena Energy Center in the US, which are all on track to be commissioned during H2 2021 or 2022, and Kennoxhead 1 in Scotland, which is expected to enter commercial operation in 2022.
Business development
Offshore
Our portfolio of US offshore development projects is moving ahead. On 30 June, the New Jersey Board of Public Utilities selected our Ocean Wind 2 project for a 20-year offshore wind renewable energy certificate (OREC) for an offshore wind farm with a capacity of 1,148 MW. The 2029 OREC price is USD 84.03 per MWh, with a 2% annual escalator. With Ocean Wind 1 and 2, we will deliver more than 2,200 MW of offshore energy to the state of New Jersey. We have now been awarded offshore wind projects totalling over 4 GW in the US, more than any other developer, which unlocks significant synergies in procurement, construction, and operation.
We are further looking to expand our offshore footprint in the US by submitting a bid to the Maryland Public Service Commission to develop Skipjack Wind 2, with a proposed capacity of up to 760 MW. We are currently developing the 120 MW Skipjack Wind 1 off the Maryland-Delaware coast, which is expected to be commissioned in 2026.
In the US, we have seen various indications of momentum on both the federal and state levels and therefore, we remain confident that three of our largest US projects: Ocean Wind 1, Revolution Wind, and Sunrise Wind are on track to be commissioned before the end of 2025. Both Ocean Wind 1 and Revolution Wind have received their notices of intent (NOIs), and Sunrise Wind's notice of intent is expected in Q3 this year.
The 50/50 joint venture agreement with PGE to develop, build, operate, and own the two Polish offshore wind farms Baltica 2 & 3 with a
On 30 June, the New Jersey Board of Public Utilities selected Ørsted's Ocean Wind 2 project to negotiate a 20-year offshore wind renewable energy certificate (OREC) for an offshore wind farm with a capacity of 1,148 MW.
Capital Markets Day 2021
On 2 June 2021, we presented our updated strategic ambitions and new financial guidance. To continue to lead in the global green energy transformation and realise our full potential as a global green energy major, we will accelerate our global build-out of renewable energy and have set an ambition to reach approx. 50 GW of installed renewable capacity by 2030. To support this ambitious build-out, our planned gross investments from 2020 to 2027 will be approx. DKK 350 billion, of which approx. 80% is expected to be within Offshore (incl. renewable hydrogen), and approx. 20% within Onshore. Net of the expected proceeds from farm-downs, investments are expected to be approx. DKK 200 billion.
In the period 2020-2027, we expect a growth in operating profit (EBITDA) from offshore and onshore assets in operation of approx. 12% a year on average, reaching a level of DKK 35-40 billion in 2027. The growth rate assumes a 50% ownership stake in new offshore projects. Potential farm-down gains will come on top of the operational EBITDA CAGR.
We aspire to be a globally recognised sustainability leader and to accelerate our efforts to operate our company in an even more sustainable way. Therefore, we have set the ambition that by 2030 all new projects commissioned must have a net-positive biodiversity impact, fully supporting that the transformation to green energy must take place in a sustainable way and in harmony with nature. Furthermore, we commit to either reuse, recycle, or recover all of the wind turbine blades in our global portfolio upon decommissioning.
Read more about our ambitions and guidance metrics in the material from the Capital Markets Day: https://orsted.com/en/capital-markets-day-2021
Örsted Interim financial report First half year 2021
Management's review
total installed capacity of up to 2.5 GW has been closed. This follows the good news of the projects being awarded contracts for difference (CfDs) earlier this year. Poland has set an ambitious renewable build-out target, and this partnership with PGE cements our position in a growing market and is an important milestone in our ambition for Continental Europe.
In Japan, we have submitted three bids in the country's first-ever auction for bottom-fixed offshore wind projects. One bid is with our partner TEPCO in the Choshi lease zone located off the east coast of the Chiba prefecture. The two other bids are with our partners JWD and Eurus Energy for projects located off the west coast of the Akita prefecture. We are very excited to be part of the first offshore auction in Japan, which has an ambition to become one of the world's largest markets for offshore wind with an up to 45 GW target in 2040. The winners of the first auction are expected to be announced at
the end of this year, and the Japanese government plans to host yearly auction rounds going forward.
We have closed the agreement with Norges Bank Investment Management (NBIM) to farm down 50% of our 752 MW Dutch offshore wind farm Borssele 1 & 2. The total value of the transaction amounted to approx. DKK 10.2 billion and marks NBIM's first investment in unlisted renewable energy infrastructure. As part of the agreement, we will provide O&M and energy balancing services.
Since the publication of our Q1 2021 report, Ørsted has entered into several new and strategic partnerships.
In the UK, we entered into a joint venture agreement with BlueFloat Energy and Falck Renewables to join two large-scale floating wind bids in Scotland. The joint venture company is owned on an equal ownership
basis and demonstrates Ørsted's commitment to floating wind. We have also submitted bids alone for bottom-fixed offshore wind project rights in the Scotland leasing round. With decades of experience in the UK and overseas, we can help maximise the full offshore wind potential in Scotland.
In Norway, we joined forces with Fred. Olsen Renewables and Hafslund Eco to participate in Norway's upcoming application round for offshore seabed leases. The Norwegian government has appointed two lease areas with a potential capacity of up to 4.5 GW across the two areas, and the consortium will be applying for seabed leases in both areas with the aim of delivering both bottom-fixed and floating offshore wind power.
In Korea, we signed an MoU with POSCO Group to support the development of our 1.6 GW offshore wind projects off the coast of Incheon City, and conduct feasibility studies on a potential collaboration on renewable
hydrogen.
In Denmark, we started construction of our first renewable hydrogen project, H2RES. The project will have a capacity of 2 MW and will be used to investigate how best to combine efficient electrolyser facilities with fluctuating power supply from offshore wind, using our two 3.6 MW offshore wind turbines at Avedøre Holme.
Furthermore, we entered into an agreement with HOFOR to source renewable power for the next phases of the Green Fuels for Denmark project from their 250 MW offshore wind farm Aflandshage which is expected to deliver first power in 2024/2025. Green Fuels for Denmark is uniting some of the strongest partners in the Danish transport and energy sector to fulfil Denmark's ambitious vision for a large-scale production of renewable hydrogen and fuels. The project has a potential capacity of 1.3 GW, abating up to 850,000 tonnes of carbon emissions.
Implementation of the EU Taxonomy
As part of the European Green Deal to become the first climate-neutral continent by 2050, the EU Commission has established the EU Taxonomy as an important enabler to scale up sustainable investments. The taxonomy is a catalogue of environmentally sustainable economic activities, each with criteria to determine if they substantially contribute towards a sustainable economy. In June, the Commission adopted the Climate Delegated Act for the first two out of six environmental objectives of the Taxonomy Regulation, namely climate change mitigation and climate change adaptation, with the remaining four expected during 2022.
At Ørsted, we want to be a catalyst for change, and are committed to taking a leading role in the global green energy transformation. We therefore welcome the new reporting framework.
During the year, we assessed whether our activities can be identified in the taxonomy and thereby be classified as taxonomy-eligible. Subject to fulfilling certain criteria on substantially contributing to at least one environmental objective, doing no significant harm (DNSH) to the other
environmental objectives, and complying with minimum social safeguards, the activities will be classified as taxonomy-aligned. Although the upcoming EU requirements for reporting on taxonomy-eligible activities do not come into force until 2022, we have decided to disclose approximate levels for our taxonomy-eligible share of revenue, EBITDA, and gross investments in our H1 2021 report (read more in our ESG performance report: https://orsted.com/esg-2021-h1). We plan to complete the criteria screening before year-end and thus to report on taxonomy-aligned shares in our annual reports, one year ahead of requirements.
The taxonomy-eligible share of revenue was above 65%, whereas the shares of our EBITDA and gross investments was above 95% and 99% respectively, in H1 2021. The non-eligible part of our revenue primarily concerned our long-term legacy activities related to sourcing and sale of gas (17% of revenue in H1 2021), Danish CHP plants, where fossil fuels still account for approx. a quarter of the fuels used, and sale of power to end-users (activity currently not covered by the taxonomy). We expect the share of taxonomy-eligible revenue to increase in the coming years.
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Örsted Interim financial report First half year 2021
Management's review
Onshore
In June, we completed the acquisition of the onshore renewable energy platform Brookfield Renewable Ireland (BRI). The acquisition marks our entry into the European onshore market with a portfolio of 327 MW in operation, 62 MW under construction, 149 MW of advanced development projects, and more than 1 GW of projects under development. Integration of key systems is underway, and we are now looking ahead at new opportunities as a transatlantic onshore renewable energy developer.
In May, we entered into an agreement to acquire the 302 MW US wind project Lincoln Land, which is expected to be operational by the end of 2021. The wind farm resides in the Midwest Independent System Operator (MISO) area and will thereby expand our footprint in the US energy market.
In the US, we signed three new PPAs in Q2 2021. One with North Iowa Municipal Electric Cooperative Association (NIMECA) to purchase power from our 103 MW wind farm Willow Creek in South Dakota. The PPA helps NIMECA diversify their energy supply. The second, is with Microsoft Corporation to purchase power from our 430 MWw solar PV farm Old 300 Solar Center in Texas. The third is with Royal DSM to purchase electricity from one of our solar projects we are developing in Texas. These adds to our list of six other PPAs signed this year, which underpins the commercial value of our onshore renewable assets in the US.
Employees
On 1 June, Richard Hunter joined Ørsted as our new Chief Operating Officer (COO). Richard has a long career as an executive and extensive experience within engineering, manufacturing, and operations, and is thus well-suited to continue the development of our EPC & Operations activities. We are excited to have Richard on board on our journey to sustain our position as the world's leading energy major.
We recently announced that Declan Flanagan decided to resign from the company. Twelve years after founding Lincoln Clean Energy and three years after Ørsted's acquisition. We have initiated the process of recruiting the next CEO of Onshore and effective immediately, Neil O'Donovan, our COO of Onshore, has been appointed interim CEO of Onshore.
More than 16 months into the COVID-19 pandemic, our Corporate Crisis Management Organisation (CCMO) has continued to meet regularly, focusing on the health and safety of our employees, and ensuring business continuity. Although the pandemic is not yet over, management and the HR department are well into considerations on how to create a flexible workplace of the future, employing the learnings we have obtained from the recent period's way of working.
We strongly believe in the value of a diverse organisation. We aspire to create an environment where everyone can thrive, perform, and grow. With the launch of Ørsted's Inclusion Networks, we promote and support diversity and inclusion of all minority groups.
Mads Nipper
Group President and CEO
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^{}[]ørsted Interim financial report First half year 2021
Management's review
At a glance
Ørsted
EBITDA
Key figures H1 2021
Revenue DKK 32.5 bn
Gross investments DKK 18.8 bn
Capital employed DKK 109.0 bn
TRIR 3.1
Number of employees 6,472
ROCE¹ 12.5%
Green share of heat and power generation, %
¹ Last 12 months
Offshore
EBITDA
Key figures H1 2021
Revenue DKK 22.2 bn
Gross investments DKK 10.4 bn
Capital employed DKK 87.9 bn
TRIR 3.1
Number of employees 3,250
Onshore
EBITDA
Key figures H1 2021
Revenue DKK 0.2 bn
Gross investments DKK 8.3 bn
Capital employed DKK 18.0 bn
TRIR 6.3
Number of employees 220
Bioenergy & Other
EBITDA
Key figures H1 2021
Revenue DKK 12.6 bn
Gross investments DKK 0.1 bn
Capital employed DKK 1.7 bn
TRIR 2.5
Number of employees 971
Green share of heat and power generation, %
Örsted Interim financial report First half year 2021
Management's review
Outlook 2021
EBITDA
EBITDA in 2021, excluding new partnership agreements, is expected to be DKK 15-16 billion, which is unchanged relative to the guidance in our annual report for 2020 and interim report for Q1 2021. We now expect an outcome in the low end of the guided range mainly due to very low wind speeds in June and July. This guidance is based on an assumption of normal wind speeds for the last five months.
Our directional guidance for Offshore has changed from 'lower' to 'significantly lower', mainly due to the significantly lower than normal wind speeds across our entire offshore wind portfolio (approx. DKK -1.4 billion impact versus a normal year up until the end of July) and the DKK 0.8 billion warranty provision towards our partners related to cable protection system issues at some of our wind farms.
Our directional guidance for Bioenergy & Other has changed from 'lower' to 'higher', mainly due to higher earnings from our CHP plants caused by higher power prices together with higher heat demand and sale of ancillary services. Furthermore, the increasing gas prices have a positive impact on earnings from revaluation of gas at storage.
The directional guidance for Onshore is 'Higher', which is unchanged relative to the guidance in the annual report for 2020.
Gross investments
Gross investments in 2021 are expected to increase from DKK 32-34 billion to DKK 39-41 billion due to the acquisition of Brookfield Renewable Ireland in June and the expected acquisition of the fully constructed 302 MW onshore wind project Lincoln Land in the US later this year.
| Outlook 2021, DKK billion | 2020 realised¹ | 2020 realised, excl. RBC¹,² | Guidance 3 Feb 2021³ | Guidance 29 Apr 2021³ | Guidance 12 Aug 2021³ |
|---|---|---|---|---|---|
| EBITDA | 18.1 | 17.2 | 15-16 | 15-16 | 15-16 |
| Offshore | 14.8 | 14.8 | Lower | Lower | Significantly lower |
| Onshore | 1.1 | 1.1 | Higher | Higher | Higher |
| Bioenergy & Other | 2.1 | 1.2 | Lower | Lower | Higher |
| Gross investments | 27.0 | 32-34 | 32-34 | 39-41 |
Our EBITDA guidance for the Group is the prevailing guidance, whereas the directional earnings development per business unit serves as a means to support this. Higher/lower indicates the direction of the business unit's earnings relative to the results for 2020 excl. RBC.
¹ Business performance principle. From 2021, we are reporting according to IFRS (see more on page 11).
² Excluding the Danish power distribution, residential customer, and city light businesses (RBC).
³ Excluding new partnerships, relative to 2020, excluding RBC.
+
Hornsea 2, off the Yorkshire coast, UK
Örsted Interim financial report First half year 2021
Management's review
Results Q2
EBITDA
Operating profit (EBITDA) totalled DKK 8.2 billion compared to DKK 3.0 billion in Q2 2020. The increase of DKK 5.2 billion was mainly related to the 50 % farm-down of Borssele 1 & 2 which resulted in a gain from new partnerships of DKK 5.4 billion, but was also due to good performance at our CHP plants and a positive effect from our gas business due to increasing gas prices. This was partly offset by the divestment of our distribution, residential customer, and city light (RBC) businesses, which contributed DKK 0.3 billion to EBITDA in Q2 2020, and lower earnings from our operating wind assets.
Earnings from offshore and onshore wind farms in operation were DKK 0.3 billion lower than in the same period last year and amounted to DKK 2.7 billion. Ramp-up of generation from Borssele 1 & 2, Plum Creek, Willow Creek, and Permian Energy Center combined with the addition of the last 400 MW of Hornsea 1 receiving CfDs in April and a positive effect from ceasing to report according to the business performance principle in 2021 contributed positively to our site earnings. However, this was more than offset by significantly lower wind speeds across especially our offshore portfolio (approx. DKK -0.7 billion compared to Q2 2020 and approx. DKK -0.9 billion compared to a normal wind year), higher TNUoS tariffs following the divestment of the offshore transmission asset at Walney Extension in mid-2020 and Hornsea 1 in Q1 2021, and lastly lower earnings from Horns Rev 2 due to the subsidy period ending in October 2020.
EBITDA from our CHP plants more than doubled relative to the same period last year and amounted to DKK 0.4 billion. The increase was mainly due to higher realised power prices together with higher sales of ancillary services.
Financial income and expenses
Net financial income and expenses amounted to DKK -0.5 billion in Q2 2021 compared to DKK -1.0 billion in Q2 2020. The lower net expenses were mainly due to Q2 2020 being adversely impacted by interest related to potential tax payments and a loss on interest rate swaps in connection with the termination of local project financing and related swaps in the US, and from generally lower net interest expenses in Q2 2021 due to lower net debt.
Tax and tax rate
Tax on profit for the period amounted to DKK 0.2 billion in Q2 2021 compared to DKK 0.9 billion in Q2 2020. The effective tax rate in Q2 2021 was 3 % and was significantly impacted by the tax-exempt gain of DKK 5.4 billion from the 50 % farm-down of Borssele 1 & 2. Tax for Q2 2021 was further positively impacted by DKK 0.9 billion regarding uncertain tax positions (UTP) due to updated management assessments and the increase of the UK tax rate from 19 % to 25 % from 2023. This was partly offset by the recognition of deferred taxes related to an initial tax equity contribution for Permian Energy Center and our US offshore portfolio.
| Financial results, DKKm | Q2 2021 | Q2 2020 | % |
|---|---|---|---|
| Revenue | 13,553 | 11,625 | 17 % |
| EBITDA | 8,196 | 2,956 | 177 % |
| Depreciation and amortisation | (1,959) | (1,827) | 7 % |
| Operating profit (loss) (EBIT) | 6,237 | 1,129 | 452 % |
| Gain (loss) on divestment of enterprises | (72) | (3) | n.a. |
| Financial items, net | (466) | (1,010) | (54 %) |
| Profit before tax | 5,698 | 119 | n.a. |
| Tax on profit (loss) for the period | (154) | (928) | (83 %) |
| Tax rate | 3 % | 780 % | (777 %p) |
| Profit (loss) for the period | 5,544 | (825) | n.a. |
Profit for the period
Profit for the period totalled DKK 5.5 billion, DKK 6.4 billion higher than in Q2 2020. The increase was primarily due to the gain from the 50 % farm-down of Borssele 1 & 2, and from lower net financial expenses and tax expenses.
Cash flows from operating activities
Cash flows from operating activities totalled DKK 3.1 billion in Q2 2021 compared to DKK 8.2 billion in Q2 2020. The decrease of DKK 5.1 billion was mainly driven by lower EBITDA (excluding the farm-down of Borssele 1 & 2, where the cash flow is included in the divestment cash flow), and that Q2 2020 was positively impacted by the divestment of the offshore transmission asset at Walney Extension. Furthermore, we received two large tax equity contributions in Q2 2020 for the onshore wind farms Sage Draw and Plum Creek, where we only received an initial tax equity contributions for Permian Energy Center in Q2 2021. Finally, Q2 2021 saw more funds tied up in other net working capital due to increasing trade receivables during Q2 2021 versus decreasing trade receivables during Q2 2020.
Investments and divestments
Gross investments amounted to DKK 12.1 billion against DKK 3.8 billion in Q2 2020. The main investments in Q2 2021 were:
- offshore wind farms (DKK 5.8 billion), including Greater Changhua 1 & 2a in Taiwan, Hornsea 2 in the UK, Ocean Wind 1 in the US, and payments regarding Baltica 2 & 3 in Poland through the 50/50 joint venture with PGE.
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Ørsted Interim financial report First half year 2021
Management's review
- onshore wind and solar PV farms (DKK 6.3 billion), including the acquisition of Brookfield Renewable Ireland, and the construction of Permian Energy Center, Old 300, Muscle Shoals, Western Trail, Helena Energy Center, Haystack, and Kennoxhead 1.
Divestments amounted to DKK 10.6 billion in Q2 2021 and were mainly related to the 50% farm-down of Borssele 1 & 2 with proceeds (NIBD impact) of DKK 9.3 billion. Furthermore, proceeds from the divestment of a 25% ownership interest in Ocean Wind 1 to New Jersey's Public Service Enterprise Group (PSEG) and final settlement with Global Infrastructure Partners (GIP) regarding Hornsea 1 were included in divestments.
| Cash flow and net debt, DKKm | Q2 2021 | Q2 2020 | % |
|---|---|---|---|
| Cash flows from operating activities | 3,147 | 8,197 | (62 %) |
| EBITDA | 8,196 | 2,956 | 177 % |
| Change in derivatives | 336 | 680 | (51 %) |
| Change in provisions | 15 | (349) | n.a. |
| Reversal of gain (loss) on divestments of assets | (5,458) | (71) | n.a. |
| Other items | 15 | (43) | n.a. |
| Interest expense, net | (382) | (634) | (40 %) |
| Paid tax | (313) | (86) | 264 % |
| Change in work in progress | (857) | (177) | 384 % |
| Change in tax equity partner liabilities | 866 | 3,017 | (71 %) |
| Change in other working capital | 729 | 2,904 | (75 %) |
| Gross investments | (12,133) | (3,757) | 223 % |
| Divestments | 10,591 | 45 | n.a. |
| Free cash flow | 1,605 | 4,485 | (64 %) |
| Net debt, beginning of period | 13,190 | 27,084 | (51 %) |
| Free cash flow from continuing operations | (1,605) | (4,485) | (64 %) |
| Free cash flow from discontinued operations | - | (102) | n.a. |
| Dividends and hybrid coupon paid | 172 | 378 | (54 %) |
| Addition of lease obligations | 194 | 138 | 41 % |
| Exchange rate adjustments, etc. | 116 | (752) | n.a. |
| Net debt, end of period | 12,067 | 22,272 | (46 %) |
The installation of the 16th turbine at Hornsea 2 which also marked Ørsted's 1,000th offshore wind turbine in UK waters
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Örsted Interim financial report First half year 2021
Management's review
Results H1
Financial results
Revenue
Power generation from offshore and onshore wind increased by 8 % and totalled 10.7 TWh in H1 2021. Ramp-up of generation from Borssele 1 & 2, Sage Draw, Plum Creek, Willow Creek, and Permian Energy Center was partly offset by significantly lower wind speeds across our offshore portfolio in particular.
Our production-based availability for Offshore amounted to 94 %, up 1 percentage point compared to the same period last year, driven by the addition of Borssele 1 & 2 performing with high availability.
Thermal power generation increased by 53 % and amounted to 3.8 TWh, driven by favourable market conditions for power generation as well as increased demand for ancillary services. Heat generation amounted to 5.0 TWh, up 22 % compared to the same period last year mainly due to colder weather in January and April.
As a result of the above-mentioned developments in power generation, the share of generation from offshore and onshore wind accounted for 74 % of our total power generation, a decrease of 6 percentage points compared to the same period last year. Our renewable share of generation accounted for 89 % in H1 2021 compared to 88 % in H1 2020.
Revenue amounted to DKK 32.5 billion. The increase of 20 % relative to H1 2020 was primarily due to the divestment of the offshore transmission asset at Hornsea 1 in Q1 2021 and higher gas and power prices across all markets, partly offset by low wind speeds in H1 2021 and the divested LNG and Danish distribution, residential customer, and city light businesses (RBC) in 2020.
| Financial results, DKKm | H1 2021 | H1 2020 | % |
|---|---|---|---|
| Revenue | 32,497 | 27,001 | 20 % |
| EBITDA | 13,059 | 9,761 | 34 % |
| Depreciation and amortisation | (3,889) | (3,581) | 9 % |
| Operating profit (loss) (EBIT) | 9,170 | 6,180 | 48 % |
| Gain (loss) on divestment of enterprises | (36) | (17) | 112 % |
| Financial items, net | (885) | (1,786) | (50 %) |
| Profit before tax | 8,245 | 4,383 | 88 % |
| Tax on profit (loss) for the period | (1,103) | (1,846) | (40 %) |
| Tax rate | 13 % | 42% | (29 %p) |
| Profit (loss) for the period | 7,142 | 2,493 | 186 % |
EBITDA
Operating profit (EBITDA) totalled DKK 13.1 billion, of which the gain from the 50 % farm-down of Borssele 1 & 2 amounted to DKK 5.4 billion. Thus, EBITDA excluding new partnerships amounted to DKK 7.7 billion, a decrease of DKK 2.1 billion compared to the same period last year.
Earnings from offshore and onshore wind farms in operation amounted to DKK 7.9 billion, a decrease of DKK 0.3 billion compared to the same period last year. Ramp-up of generation from Borssele 1 & 2, Sage Draw, Plum Creek, Willow Creek, and Permian Energy Center combined with the addition of CfDs for the last 400 MW of capacity from Hornsea 1 and a
EBITDA, DKK billion
Ceasing the use of business performance
With the implementation of IFRS 9 in 2018, it has become significantly easier to apply IFRS hedge accounting to our commodity hedges. We have concluded that IFRS 9 can replace our business performance principle, and therefore, we are reporting based on IFRS only from 1 January 2021.
At the end of 2020, the value of our business performance hedges deferred to a future period amounted to DKK -2.7 billion, of which DKK -1.1 billion relates to 2021. This net loss has already been recognised in the income statement under IFRS in previous years, as we have not previously applied hedge accounting for these. Consequently, for the period 2021-2025, EBITDA (according to IFRS) will be higher with a similar amount compared to what the business performance EBITDA would have been in the same period if we had continued to report based on this principle. For H1 2021, EBITDA according to IFRS was DKK 0.6 billion higher than if we had kept reporting according to the business performance principle. The main part of the amount was related to site EBITDA in Offshore and the remaining part was related to our CHP plants and gas activities in Bioenergy & Other.
Throughout the management's review, we will use business performance as comparable numbers for 2020 for a better like-for-like comparison, while our consolidated financial statements will be reported after IFRS only. Read more in note 2 'Business Performance'.
In addition, see more info in the annual report for 2020 in the financial outlook section on page 16, and in notes 1.4 and 1.6 on pages 88 and 90, respectively.
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positive effect from ceasing to report according to the business performance principle in 2021 (approx. DKK 0.5 billion) contributed positively to our site earnings. However, this was more than offset by significantly lower wind speeds across our offshore portfolio (approx. DKK -1.8 billion compared to H1 2020 and approx. DKK -1.0 billion compared to a normal wind year), higher TNUoS tariffs following the divestment of the offshore transmission assets at Walney Extension in mid-2020 and Hornsea 1 in Q1 2021 (approx. DKK -0.2 billion), lower earnings from Horns Rev 2 due to the subsidy period ending in October 2020 (approx. DKK -0.1 billion), and lastly lower ROC recycle prices in H1 2021 compared to the same period last year (approx. DKK -0.1 billion).
EBITDA from partnerships amounted to DKK 5.1 billion and was primarily related to the 50 % farm-down of Borssele 1 & 2, whereas earnings from existing partnerships amounted to DKK -0.3 billion, a decrease of DKK 1.8 billion compared to the same period last year, which saw high earnings related to the Hornsea 1 transmission asset. H1 2021 was negatively impacted by a DKK 0.8 billion warranty provision towards our partners related to cable protection system issues at some of our offshore wind farms.
The divested RBC businesses contributed DKK 0.8 billion to EBITDA in H1 2020.
EBITDA from our CHP plants amounted to DKK 1.0 billion, an increase of DKK 0.4 billion compared to the same period last year. The increase was mainly due to higher realised power prices together with higher sales of ancillary services and increased heat generation.
EBITDA from our gas business also contributed
with earnings of DKK 0.3 billion in H1 2021, an increase of DKK 0.4 billion compared to the same period last year.
EBIT
EBIT increased by DKK 3.0 billion to DKK 9.2 billion in H1 2021, primarily as a result of the higher EBITDA, only partly offset by higher depreciation driven by more wind farms in operation.
Financial income and expenses
Net financial income and expenses amounted to DKK -0.9 billion compared to DKK -1.8 billion in H1 2020. The lower net expenses were mainly due to high interest in H1 2020 related to potential tax payments and a loss on interest rate swaps in connection with the termination of local project financing and related swaps in the US, and generally lower net interest expenses in H1 2021 due to lower net debt.
Tax and tax rate
Tax on profit for the period amounted to DKK 1.1 billion, DKK 0.7 billion lower than in the same period last year. The effective tax rate was 13 % and was significantly impacted by the tax-exempt gain of DKK 5.4 billion from the 50 % farm-down of Borssele 1 & 2. Tax for H1 2021 was further reduced by DKK 0.9 billion regarding uncertain tax positions (UTP) due to updated management assessments and the increase of the UK tax rate from 19 % to 25 % from 2023. This was partly offset by the recognition of a deferred tax liability related to an initial tax equity contribution for Permian Energy Center and our US offshore portfolio, and taxable income in onshore entities without tax equity partners following the winter storm in Texas in February.
| Cash flow and net debt, DKKm | H1 2021 | H1 2020 | % |
|---|---|---|---|
| Cash flows from operating activities | 11,234 | 7,769 | 45 % |
| EBITDA | 13,059 | 9,761 | 34 % |
| Change in derivatives | (475) | (514) | (8 %) |
| Change in provisions | 645 | (365) | n.a. |
| Reversal of gain (loss) on divestments of assets | (5,678) | (1,288) | 341 % |
| Other items | (46) | (7) | 557 % |
| Interest expense, net | (636) | (1,163) | (45 %) |
| Paid tax | (1,186) | (1,353) | (12 %) |
| Change in work in progress | 3,754 | (2,015) | n.a. |
| Change in tax equity partner liabilities | 619 | 2,892 | (79 %) |
| Change in other working capital | 1,178 | 1,821 | (35 %) |
| Gross investments | (18,798) | (9,065) | 107 % |
| Divestments | 10,560 | 52 | n.a. |
| Free cash flow | 2,996 | (1,244) | n.a. |
| Net debt, beginning of period | 12,343 | 17,230 | (28 %) |
| Free cash flow from continuing operations | (2,996) | 1,244 | n.a. |
| Free cash flow from discontinued operations | - | 44 | n.a. |
| Dividends and hybrid coupon paid | 5,254 | 4,921 | 7 % |
| Addition of lease obligations | 423 | 147 | 188 % |
| Issuance of hybrid capital, net | (4,356) | - | n.a. |
| Exchange rate adjustments, etc. | 1,399 | (1,321) | n.a. |
| Net debt, end of period | 12,067 | 22,272 | (46 %) |
Profit for the period
Profit for the period totalled DKK 7.1 billion, DKK 4.6 billion higher than in H1 2020. The increase was primarily due to the gain from the 50 % farm-down of Borssele 1 & 2, and from lower net financial expenses and tax expenses.
Cash flows and net debt
Cash flows from operating activities
Cash flows from operating activities totalled DKK 11.2 billion in H1 2021 compared to DKK 7.8 billion in H1 2020. The increase of DKK 3.5 billion was mainly driven by a cash inflow
from work in progress in H1 2021 versus a cash outflow in H1 2020. This was partly offset by higher cash flow from tax equity contributions in H1 2020 which was positively impacted by Sage Draw and Plum Creek, while H1 2021 only saw an initial tax equity contribution for Permian Energy Center.
In H1 2021, we had a net cash inflow from work in progress of DKK 3.8 billion, mainly from the divestment of the Hornsea 1 offshore transmission asset (DKK 5.0 billion), partly offset by construction work on the offshore transmission asset at Hornsea 2. In
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H1 2020, we had a net cash outflow of DKK 2.0 billion, mainly from supplier payments related to the construction of Hornsea 1 for partners and the offshore transmission asset at Hornsea 2, partly offset by the divestment of the offshore transmission asset at Walney Extension.
Investments and divestments
Gross investments amounted to DKK 18.8 billion against DKK 9.1 billion in H1 2020. The main investments in H1 2021 were:
- offshore wind farms (DKK 10.4 billion), including Greater Changhua 1 & 2a in Taiwan, Hornsea 2 in the UK and our portfolio of US projects as well as payments related to Baltica 2 & 3 in Poland through the 50/50 joint venture with PGE.
- onshore wind and solar PV farms (DKK 8.3 billion), including the acquisition of Brookfield Renewable Ireland, and the construction of Permian Energy Center, Old 300, Muscle Shoals, Western Trail, Helena Energy Center, Haystack, and Kennoxhead 1.
Divestments amounted to DKK 10.6 billion in H1 2021 and were mainly related to the 50 % farm-down of Borssele 1 & 2 with proceeds (NIBD impact) of DKK 9.3 billion.
Furthermore, proceeds from the divestment of a 25 % ownership interest in Ocean Wind 1 to New Jersey's Public Service Enterprise Group (PSEG) and final settlement with Global Infrastructure Partners (GIP) regarding Hornsea 1 were included in divestments.
Interest-bearing net debt
Interest-bearing net debt totalled DKK 12.1 billion at the end of June 2021 against DKK 12.3 billion at the end of 2020. The slight decrease was mainly due to the positive free cash flow of DKK 3.0 billion and the issuance of new hybrid capital, almost offset by dividend and hybrid coupon payments of DKK 5.3 billion and exchange rate adjustments.
Equity
Equity was DKK 96.9 billion at the end of June 2021 against DKK 97.3 billion at the end of 2020.
Capital employed
Capital employed was DKK 109.0 billion at the end of June 2021 against DKK 109.7 billion at the end of 2020.
Financial ratios
Return on capital employed (ROCE)
Return on capital employed (ROCE, last 12 months) was 12.5 % at the end of H1 2021. The increase of 1.7 percentage points compared to the same period last year was attributable to the higher EBIT over the 12-month period.
Credit metric (FFO/adjusted net debt)
The funds from operations (FFO)/adjusted net debt credit metric was 63 % at the end of June 2021 against 43 % in the same period last year.
Non-financial results
Green share of heat and power generation
The green share of heat and power generation amounted to 89 % in H1 2021, up 1 percentage point relative to the same period last year. The slight increase was mainly due to higher generation from our operating offshore and onshore assets due to additional capacity, and from a higher share of biomass based thermal power generation. This was partly offset by lower wind speeds and increased thermal generation of heat and power driven by higher heat demand (due to colder weather) and regulatory obligations to make all our energy capacities available to the market.
Greenhouse gas emissions
Greenhouse gas intensity from our heat and power generation and other operating activities (scope 1 and 2) decreased to 56 g CO₂ e/kWh in H1 2021 against 64 g CO₂ e/kWh in H1 2020. Emissions per kWh decreased for the same reasons as mentioned above.
Greenhouse gas emissions from our supply chain and sales activities (scope 3) decreased by 25 % to 9.9 million tonnes in H1 2021, driven by lower gas sales volumes.
Safety
In H1 2021, we had 35 total recordable injuries (TRIs), of which 19 injuries were related to contractors' employees. This was a decrease of four injuries compared to the same period last year or a reduction of 10 %. The number of hours worked was 11.4 million hours, an increase of 9 % compared to H1 2020. During H1, the total recordable injury rate (TRIR) decreased from 3.7 in H1 2020 to 3.1 in H1 2021.
Capital employed, %
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Offshore
Highlights
- Installed the first turbines at our 1.3 GW offshore wind farm Hornsea 2.
- Ocean Wind 2 awarded 1,148 MW offshore wind contract in New Jersey, fully utilising our Ocean Wind lease area.
- Closed the agreement to enter into a 50/50 joint venture with PGE for the Baltica 2 & 3 projects in Poland.
- Closed the agreement with Norges Bank Investment Management to farm down 50 % of the 752 MW offshore wind farm Borssele 1 & 2.
- Submitted bids in the Maryland auction.
- Submitted bids in the Scotland lease auction.
- Submitted bids in the first-ever Japanese auction for bottom-fixed offshore wind.
- Entered into new strategic partnerships in the Norway, Korea, Scotland, and Japan.
Financial results Q2 2021
Power generation decreased by 4 % relative to Q2 2020, primarily due to significantly lower wind speeds and lower availability. This was partly offset by ramp-up of generation from Borssele 1 & 2.
Wind speeds amounted to a portfolio average of 7.8 m/s, which was lower than in Q2 2020 (8.4 m/s) and the normal wind speeds expected in the second quarter (8.6 m/s). Availability ended at 93 %, which was 2 percentage points lower than in Q2 2020 due to planned outages and maintenance.
Revenue decreased by 5 % to DKK 8.9 billion. Revenue from offshore wind farms in operation decreased by 8 % to DKK 3.3 billion, mainly driven by the lower power generation. Revenue from power sales increased by DKK 2.2 billion, mainly due to the higher power prices despite lower volumes sold.
There was no significant revenue from construction agreements in Q2 2021. In Q2 2020, revenue was primarily related to the divestment of the offshore transmission asset at Walney Extension, the construction of Virginia Coastal Wind, and the completion of Hornsea 1.
EBITDA increased by DKK 5.2 billion and amounted to DKK 7.5 billion.
EBITDA from Sites, O&M, and PPAs amounted to DKK 2.4 billion in Q2 2021. The 8 % decrease was due to the above-mentioned lower power generation following a second quarter with very low wind (approx. DKK -0.7 billion compared to Q2 2020 and approx. DKK -0.9 billion compared to a normal wind year). Furthermore, higher TNUoS tariffs following the divestment of the offshore transmission assets at Walney Extension in mid-2020 and Hornsea 1 in Q1 2021 as well as lower earnings from Horns Rev 2 due to the subsidy period ending in October 2020 contributed to the lower earnings. This was only partly offset by ramp-up of generation from Borssele 1 & 2 and the addition of the last 400 MW of Hornsea 1 receiving CfDs in April together with a positive effect of ceasing to report according to the business performance principle in 2021.
EBITDA from partnerships increased by DKK 5.3 billion, amounting to DKK 5.6 billion. In Q2 2021, earnings from construction agreements
| Financial results | Q2 2021 | Q2 2020 | % | H1 2021 | H1 2020 | % | |
|---|---|---|---|---|---|---|---|
| Business drivers | |||||||
| Decided (FID'ed) and installed capacity^{1} | GW | 9.8 | 9.9 | (1 %) | 9.8 | 9.9 | (1 %) |
| Installed capacity | GW | 7.6 | 6.8 | 12 % | 7.6 | 6.8 | 12 % |
| Generation capacity | GW | 4.0 | 3.8 | 5 % | 4.0 | 3.8 | 5 % |
| Wind speed^{2} | m/s | 7.8 | 8.4 | (7 %) | 9.2 | 10.4 | (12 %) |
| Load factor | % | 29 | 32 | (3 %p) | 39 | 46 | (7 %p) |
| Availability | % | 93 | 95 | (2 %p) | 94 | 93 | 1 %p |
| Power generation | TWh | 2.5 | 2.6 | (4 %) | 7.1 | 7.2 | (1 %) |
| Denmark | 0.4 | 0.4 | 0 % | 0.9 | 1.1 | (18 %) | |
| United Kingdom | 1.3 | 1.7 | (24 %) | 3.9 | 4.7 | (17 %) | |
| Germany | 0.3 | 0.4 | (25 %) | 0.9 | 1.2 | (25 %) | |
| The Netherlands | 0.5 | 0.1 | 400 % | 1.3 | 0.1 | n.a. | |
| Other | 0.0 | 0.0 | n.a. | 0.1 | 0.0 | n.a. | |
| Power sales | TWh | 4.5 | 5.5 | (18 %) | 11.4 | 14.3 | (20 %) |
| Power price, LEBA UK | GBP/MWh | 86.1 | 25.4 | 239 % | 82.3 | 29.5 | 179 % |
| British pound | DKK/GBP | 8.6 | 8.4 | 2 % | 8.6 | 8.5 | 1 % |
| Financial performance | |||||||
| Revenue | DKKm | 8,940 | 9,364 | (5 %) | 22,225 | 17,339 | 28 % |
| Sites, O&M and PPAs | 3,344 | 3,625 | (8 %) | 9,029 | 9,350 | (3 %) | |
| Power sales | 5,412 | 3,208 | 69 % | 7,859 | 4,872 | 61 % | |
| Construction agreements | 34 | 2,485 | (99 %) | 5,135 | 3,049 | 68 % | |
| Other | 150 | 46 | 226 % | 202 | 68 | 197 % | |
| EBITDA | DKKm | 7,527 | 2,361 | 219 % | 11,473 | 7,993 | 44 % |
| Sites, O&M, and PPAs | 2,368 | 2,578 | (8 %) | 7,254 | 7,514 | (3 %) | |
| Construction agreements and divestment gains | 5,648 | 396 | n.a. | 5,075 | 1,495 | 239 % | |
| Other, incl. project development | (489) | (613) | (20 %) | (856) | (1,016) | (16 %) | |
| Depreciation | DKKm | (1,502) | (1,452) | 3 % | (3,049) | (2,860) | 7 % |
| EBIT | DKKm | 6,025 | 909 | 563 % | 8,424 | 5,133 | 64 % |
| Cash flow from operating activities | DKKm | 1,301 | 4,338 | (70 %) | 6,507 | 2,785 | 134 % |
| Gross investments | DKKm | (5,793) | (2,802) | 107 % | (10,360) | (7,094) | 46 % |
| Divestments | DKKm | 10,702 | (150) | n.a. | 10,669 | (141) | n.a. |
| Free cash flow | DKKm | 6,210 | 1,386 | 348 % | 6,816 | (4,450) | n.a. |
| Capital employed | DKKm | 87,862 | 84,311 | 4 % | 87,862 | 84,311 | 4 % |
1
O&M: Operation and maintenance agreements, PPAs: Power purchase agreements
2 In Q2 2021, we aligned our definition of installed capacity, hence all assets (installed or FID'ed) are reported using nameplate capacity. Previously a few wind farms were reported using 'power optimised capacity' or 'export cable limit capacity'
3 2020 numbers have been restated. See note 2.5 in our ESG Performance Report.
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were primarily related to the 50 % farm-down of Borssele 1 & 2 resulting in a gain from new partnerships of DKK 5.4 billion. The remaining EBITDA in Q2 2021 was related to earnings from finalised construction projects.
EBITDA from other activities, including project development, amounted to DKK -0.5 billion and was slightly lower than in the same period last year.
Cash flow from operating activities amounted to DKK 1.3 billion, which was DKK 3.0 billion lower than in Q2 2020. The decrease was mainly due to the lower EBITDA (excluding the farm-down of Borssele 1 & 2, where the proceeds are included in the divestment cash flow), a change in the value of derivates and that Q2 2020 was positively impacted by the divestment of the offshore transmission asset at Walney Extension.
Gross investments amounted to DKK 5.8 billion and mainly related to Hornsea 2, Greater Changhua 1 & 2a, and Ocean Wind as well as the acquisition of Baltica 2 & 3.
Financial results H1 2021
Power generation decreased marginally by 0.1 TWh relative to H1 2020, as significantly lower wind speeds and curtailments were offset by high availability, especially at our new sites Hornsea 1 and Borssele 1 & 2, together with ramp-up of generation from Borssele 1 & 2.
Wind speeds amounted to a portfolio average of 9.2 m/s, which was below a normal wind year (9.8 m/s), with low wind in January and especially during Q2 2021. Availability ended at 94 %, which was 1 percentage point above H1 2020. This was mainly due to the addition of Borssele 1 & 2 performing with high availability.
Revenue increased by 28 % to DKK 22.2 billion. Revenue from construction agreements increased by DKK 2.1 billion, primarily due to the divestment of the offshore transmission asset at Hornsea 1 in H1 2021. In H1 2020, revenue was primarily related to the divestment of the offshore transmission asset at Walney Extension, the construction of Virginia Coastal Wind, and the completion of Hornsea 1.
Revenue from offshore wind farms in operation amounted to DKK 9.0 billion, a DKK 0.3 billion decrease compared to the same period last year, due to the above-mentioned lower power generation following a first half year with very low wind. Revenue from power sales increased by DKK 3.0 billion due to significantly higher power prices despite lower volumes sold.
EBITDA increased by 44 % relative to H1 2020 and amounted to DKK 11.5 billion.
EBITDA from Sites, O&M, and PPAs amounted to DKK 7.3 billion in H1 2021. The 3 % decrease was due to the above-mentioned lower power generation following a first half year with low wind (approx. DKK -1.8 billion compared to H1 2020 and approx. DKK -1.0 billion compared to a normal wind year). Furthermore, higher TNUoS tariffs following the divestment of the offshore transmission asset at Walney Extension in mid-2020 and Hornsea 1 in Q1 2021 (approx. DKK -0.2 billion) as well as lower earnings from Horns Rev 2 due to the subsidy period ending in October 2020 (approx. -DKK 0.1 billion) contributed to the lower earnings. Finally, H1 2021 saw lower ROC recycle prices than H1 2020 (approx. DKK -0.1 billion). This was only partly offset by ramp-up of generation from Borssele 1 & 2 and the addition of CfDs for the last 400 MW of generation from Hornsea 1 respectively, together with a positive effect of ceasing to report according to the business performance principle in 2021.
Wind speed, (m/s) for our offshore wind farms
2020 numbers have been restated. See note 2.5 in our ESG Performance Report.
The wind speed indicates how many metres per second the wind has blown in the areas where we have offshore wind farms. The weighting is based on our generation capacity.
- Indicates m/s for full year 2021 (if Q3 and Q4 follows the normal wind year)
EBITDA from partnerships amounted to DKK 5.1 billion and was primarily related to the 50 % farm-down of Borssele 1 & 2, resulting in a gain from new partnerships of DKK 5.4 billion and earnings from finalised construction projects. This was partly offset by a DKK 0.8 billion warranty provision towards our partners related to cable protection system issues at some of our offshore wind farms in Q1 2021.
EBITDA from other activities, including project development, amounted to DKK -0.9 billion, slightly lower than in the same period last year, and was mainly related to expensed project development costs.
Depreciation increased by 7 % and amounted to DKK 3.0 billion. The increase was mainly due to the commissioning of Borssele 1 & 2.
Cash flow from operating activities amounted to DKK 6.5 billion, which was DKK 3.7 billion higher than in H1 2020. The significant increase was mainly driven by the divestment of the Hornsea 1 offshore transmission assets in March 2021. In H1 2021, we had a net cash inflow from work in progress of DKK 3.8 billion, mainly from the above-mentioned divestment. In H1 2020, we had a net cash outflow of DKK 2.0 billion, mainly from supplier payments related to the construction of Hornsea 1 for partners, the offshore transmission assets at Hornsea 2, and from the divestment of the offshore transmission asset at Walney Extension.
Gross investments amounted to DKK 10.4 billion and were mainly related to Greater Changhua 1 & 2a, Hornsea 2, our US portfolio as well as Baltica 2 & 3.
Divestments amounted to DKK 10.7 billion in H1 2021 and were mainly related to the 50 % farm-down of Borssele 1 & 2 with proceeds (NIBD impact) of DKK 9.3 billion. Furthermore, proceeds from the divestment of a 25 % ownership interest in Ocean Wind 1 to New Jersey's Public Service Enterprise Group (PSEG) and final settlement with Global Infrastructure Partners (GIP) regarding Hornsea 1 were included in divestments.
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Onshore
Highlights
- Commissioned Permian Energy Center in Texas, our first combined solar PV and storage facility.
- Western Trail wind farm in Texas was commissioned in August.
- Closed the agreement to acquire Brookfield Renewable Ireland, a European onshore wind platform.
- Signed PPAs with NIMECA, Microsoft Corporation, and Royal DSM.
Financial results Q2 2021
Power generation from our operating onshore assets increased by 25 % relative to Q2 2020. The increase was due to the commissioning of the wind farms Plum Creek and Willow Creek, and the solar PV farm Permian Energy Center. In Q2 2021, the wind speed across the portfolio was 7.3 m/s, which was significantly lower than both last year (8.0 m/s) and in a normal wind year in Q2 (8.1 m/s).
Revenue was down DKK 0.1 billion relative to Q2 2020 and amounted to DKK 0.1 billion. The decrease was mainly due to a minor subsequent credit loss in Q2 2021 regarding the winter storm period in February 2021, negative effects from ceasing to report according to the business performance principle in 2021, and lower wind speeds. This was only partly offset by higher power generation and higher realised prices together with more assets in operation.
EBITDA for Q2 2021 amounted to DKK 0.2 billion, DKK 0.1 billion lower than in the same period last year. The decrease was caused by the lower revenue as described above and higher fixed costs due to the acquisition of Brookfield Renewable Ireland (BRI) in June. Additionally, Q2 2020 was positively impacted by a gain from the divestment of Oak Solar.
Cash flow from operating activities decreased by DKK 2.4 billion compared to the same period last year. The decrease was mainly due to large tax equity contributions in Q2 2020 for Sage Draw and Plum Creek, only partly offset by an initial tax equity contribution for Permian Energy Center in Q2 2021.
Gross investments amounted to DKK 6.3 billion in Q2 2021 and were related to the acquisition of BRI as well as the construction of Permian Energy Center, Old 300, Muscle Shoals, Western Trail, Helena Energy Center, Haystack, and Kennoxhead 1.
Financial results H1 2021
In H1 2021, power generation from our operating onshore assets increased by 33 % compared to H1 2020, amounting to 3.6 TWh. The increase was driven by the commissioning of our wind farms Sage Draw, Plum Creek, and Willow Creek, and the solar PV farm Permian Energy Center. Wind speeds across the portfolio amounted to 7.5 m/s, which was both lower than in the same period last year (7.8 m/s), and in a normal wind year (8.0 m/s).
Availability for our wind assets ended at 95 %, down 1 percentage point compared to the same period last year. The decrease was driven by the commissioning of our wind farms Sage Draw, Plum Creek, and Willow Creek, and the solar PV farm Permian Energy Center. Wind speeds across the portfolio amounted to 7.5 m/s, which was both lower than in the same period last year (7.8 m/s).
| Financial results | Q2 2021 | Q2 2020 | % | H1 2021 | H1 2020 | % | |
|---|---|---|---|---|---|---|---|
| Business drivers | |||||||
| Decided (FID'ed) and installed capacity | GW | 4.6 | 2.1 | 119 % | 4.6 | 2.1 | 119 % |
| Installed capacity | GW | 2.5 | 1.6 | 56 % | 2.5 | 1.6 | 56 % |
| Wind speed¹ | m/s | 7.3 | 8.0 | (9 %) | 7.5 | 7.8 | (4 %) |
| Load factor, wind¹ | % | 45 | 49 | (4 %p) | 45 | 47 | (2 %p) |
| Load factor, solar PV | % | 29 | 31 | (2 %p) | 29 | 20 | 9 %p |
| Availability, wind¹ | % | 97 | 96 | 1 %p | 95 | 96 | (1 %p) |
| Availability, solar PV | % | 90 | - | n.a. | 90 | - | n.a. |
| Power generation | TWh | 2.0 | 1.6 | 25 % | 3.6 | 2.7 | 33 % |
| US, wind | 1.6 | 1.6 | 0 % | 3.2 | 2.7 | 19 % | |
| US, solar PV | 0.4 | 0.0 | n.a. | 0.4 | 0.0 | n.a. | |
| Europe | 0.0 | 0.0 | n.a. | 0.0 | 0.0 | n.a. | |
| US dollar | DKK/USD | 6.2 | 6.8 | (9 %) | 6.2 | 6.8 | (9 %) |
| Financial performance | |||||||
| Revenue | DKKm | 107 | 160 | (33 %) | 227 | 297 | (24 %) |
| EBITDA | DKKm | 178 | 312 | (43 %) | 406 | 499 | (19 %) |
| Sites | (5) | 103 | n.a. | 39 | 176 | (78 %) | |
| Production tax credits and tax attributes | 312 | 268 | 16 % | 595 | 477 | 25 % | |
| Other, incl. project development | (129) | (59) | 119 % | (228) | (154) | 48 % | |
| Depreciation | DKKm | (201) | (109) | 84 % | (329) | (207) | 59 % |
| EBIT | DKKm | (23) | 203 | n.a. | 77 | 292 | (74 %) |
| Cash flow from operating activities | DKKm | 857 | 3,209 | (73 %) | 411 | 3,162 | (87 %) |
| Gross investments | DKKm | (6,275) | (733) | 756 % | (8,280) | (1,481) | 459 % |
| Divestments | DKKm | (1) | 114 | n.a. | - | 114 | n.a. |
| Free cash flow | DKKm | (5,419) | 2,590 | n.a. | (7,869) | 1,795 | n.a. |
| Capital employed | DKKm | 17,968 | 8,608 | 109 % | 17,968 | 8,608 | 109 % |
¹ US only.
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en by the unprecedented winter storm in February in Texas. In H1 2021, availability for our solar asset was 90 %, adversely impacted by substation outages and testing at Permian Energy Center.
Revenue was down DKK 0.1 billion relative to H1 2020 and amounted to DKK 0.2 billion. The decrease was due to lower prices for the part of the portfolio not covered by PPAs and the winter storm period in Q1 2021. Furthermore, a negative effect from ceasing to report according to the business performance principle in 2021, and lower wind speeds contributed to the lower revenue. This was partly offset by more assets in operation and generally higher realised prices.
EBITDA for H1 2021 decreased by DKK 0.1 billion compared to the same period last year and amounted to DKK 0.4 billion. The decrease was caused by the lower revenue as described above and higher fixed costs due to the acquisition of BRI. Additionally, H1 2020 was positively impacted by a gain from the divestment of Oak Solar.
Cash flow from operating activities decreased by DKK 2.8 billion compared to the same period last year. The decrease was mainly due to large tax equity contributions for Sage Draw and Plum Creek in H1 2020 as well as more funds tied up in net working capital, only partly offset by a tax equity contribution for Permian Energy Center in H1 2021.
Gross investments amounted to DKK 8.3 billion in H1 2021 and were related to the acquisition of BRI as well as the construction of Permian Energy Center, Old 300, Muscle Shoals, Western Trail, Helena Energy Center, Haystack, and Kennoxhead 1.
Wind speed, (m/s) for our onshore wind farms
The wind speed indicates how many metres per second the wind has blown in the areas where we have onshore wind farms. The weighting is based on our generation capacity.
- Indicates m/s for full year 2021 (if Q3 and Q4 follows the normal wind year)
Willow Creek, Butte County, South Dakota, US
Örsted Interim financial report First half year 2021
Management's review
Bioenergy & Other
Financial results Q2 2021
Power generation was 67 % higher than in Q2 2020, primarily driven by higher realised prices and higher sales of ancillary services. Heat generation increased by 10 % in Q2 2021, mainly due to colder weather in the beginning of the quarter.
Revenue increased by 43 % compared to Q2 2020 and amounted to DKK 5.6 billion. The increase was driven by significantly higher gas prices, which led to higher revenue in our gas business despite lower volumes sold, mainly due to the divestment of our LNG activities. Furthermore, we had higher revenue from our CHP plants due to the higher power generation and higher Danish power prices. This was partly offset by the divestment of our RBC businesses in August 2020.
EBITDA amounted to DKK 0.5 billion compared to DKK 0.2 billion in Q2 2020.
EBITDA from CHP plants was DKK 0.2 billion higher than in the same period last year, totalling DKK 0.4 billion in Q2 2021. The increase was mainly due to higher power prices in Denmark combined with higher earnings from the sale of ancillary services.
EBITDA from Gas Markets & Infrastructure increased by DKK 0.4 billion relative to the same period last year, amounting to DKK 0.2 billion in Q2 2021. The positive effect was driven by significant increases in gas prices throughout Q2 2021, whereas gas prices fell during Q2 2020. This led to a net positive effect from
revaluating our gas at storage and storage hedges.
EBITDA from our distribution, residential customer, and city light businesses amounted to DKK 0.3 billion in Q2 2020, which has not been repeated due to the divestment in August 2020 to Andel.
Cash flow from operating activities amounted to DKK 1.3 billion in Q2 2021. The increase of DKK 0.5 billion was mainly due to a significant change in the value of derivatives and the higher EBITDA. This was partly offset by more funds tied up in net working capital due to increasing trade receivables during Q2 2021 versus decreasing trade receivables during Q2 2020.
Financial results H1 2021
Power generation was 53 % higher than in H1 2020, driven by higher realised prices as well as increased demand for ancillary services. Heat generation increased by 22 % in H1 2021 mainly due to colder weather in January and April.
Revenue increased by 10 % compared to H1 2020 and amounted to DKK 12.6 billion. The increase was driven by a significant increase in the average gas price leading to higher revenue in our gas business, partly offset by lower gas volumes sold, mainly due to the divestment of our LNG activities. Further, we saw higher revenue from our CHP plants due to higher power prices in Denmark, which was partly offset by the divestment of our distribu
| Financial results | Q2 2021 | Q2 2020 | % | H1 2021 | H1 2020 | % | |
|---|---|---|---|---|---|---|---|
| Business drivers | |||||||
| Degree days | Number | 487 | 436 | 12 % | 1,812 | 1,501 | 21 % |
| Heat generation | TWh | 1.1 | 1.0 | 10 % | 5.0 | 4.1 | 22 % |
| Power generation | TWh | 1.5 | 0.9 | 67 % | 3.8 | 2.5 | 53 % |
| Gas sales | TWh | 15.1 | 20.1 | (25 %) | 34.0 | 46.7 | (27 %) |
| Power sales | TWh | 2.2 | 3.0 | (27 %) | 4.5 | 6.6 | (32 %) |
| Gas price, TTF | EUR/MWh | 24.8 | 5.3 | 368 % | 21.6 | 7.5 | 187 % |
| Power price, DK | EUR/MWh | 58.8 | 20.5 | 187 % | 53.9 | 20.8 | 159 % |
| Green dark spread, DK | EUR/MWh | (8.3) | (12.2) | (32 %) | (6.3) | (13.7) | (54 %) |
| Green spark spread, DK | EUR/MWh | (9.4) | 1.2 | n.a. | (5.6) | (3.2) | 71 % |
| Financial performance | |||||||
| Revenue | DKKm | 5,567 | 3,895 | 43 % | 12,587 | 11,404 | 10 % |
| EBITDA | DKKm | 503 | 185 | 172 % | 1,125 | 1,118 | 1 % |
| CHP plants | 351 | 152 | 131 % | 1,027 | 672 | 53 % | |
| Gas Markets & Infrastructure | 232 | (190) | n.a. | 251 | (179) | n.a. | |
| Distribution, B2C, and city light | - | 305 | n.a. | - | 781 | n.a. | |
| Other, incl. project development | (80) | (82) | (2 %) | (153) | (156) | (2 %) | |
| Depreciation | DKKm | (194) | (208) | (7 %) | (394) | (400) | (2 %) |
| EBIT | DKKm | 309 | (23) | n.a. | 731 | 718 | 2 % |
| Cash flow from operating activities | DKKm | 1,275 | 817 | 56 % | 4,293 | 2,374 | 81 % |
| Gross investments | DKKm | (30) | (179) | (83 %) | (89) | (423) | (79 %) |
| Divestments | DKKm | (174) | 81 | n.a. | (203) | 80 | n.a. |
| Free cash flow | DKKm | 1,071 | 719 | 49 % | 4,001 | 2,031 | 97 % |
| Capital employed | DKKm | 1,727 | 13,670 | (87 %) | 1,727 | 13,670 | (87 %) |
Örsted Interim financial report First half year 2021
Management's review
tion, residential customer, and city light businesses in August 2020 and part of our B2B business on 1 March 2021.
EBITDA amounted to DKK 1.1 billion, in line with H1 2020.
EBITDA from CHP plants was DKK 0.4 billion higher than in the same period last year, totalling DKK 1.0 billion in H1 2021. The increase was mainly due to higher power prices in Denmark combined with higher earnings from ancillary services and a positive effect from ceasing to report according to the business performance principle in 2021.
EBITDA from Gas Markets & Infrastructure amounted to DKK 0.3 billion in H1 2021, a DKK 0.4 billion increase relative to the same period last year. This was a result of a higher net positive effect from revaluating our gas at storage and storage hedges as prices in Q2 2021 saw a steep increase versus a decrease in Q2 2020. This was combined with a provision for bad debt in our B2B business in Q1 2020 to cover the COVID-19-related default risk among our customers as well as a positive effect from ceasing to report according to the business performance principle in 2021.
EBITDA from our RBC businesses amounted to DKK 0.8 billion in H1 2020, which has not been repeated due to the divestment in August 2020 to Andel.
Cash flow from operating activities amounted to DKK 4.3 billion in H1 2021. The increase of DKK 1.9 billion was mainly due to a positive effect from the change in the value of derivatives. This was partly offset by on-account taxes paid in H1 2021 versus receipt of on-account taxes in H1 2020 and generally more
funds tied up in net working capital.
Gross investments amounted to DKK 0.1 billion in H1 2021 and mainly related to reinvestments at our CHP plants.
Asnæs bioplant, Kalundborg, Denmark
Örsted Interim financial report First half year 2021
Management's review
Performance highlights
| Financials, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 | 2020 |
|---|---|---|---|---|---|
| Income statement (BP¹ comparables) | |||||
| Revenue | 32,497 | 27,001 | 13,553 | 11,625 | 52,601 |
| EBITDA | 13,059 | 9,761 | 8,196 | 2,956 | 18,124 |
| Offshore | 11,473 | 7,993 | 7,527 | 2,361 | 14,750 |
| Sites, O&M and PPAs | 7,254 | 7,514 | 2,368 | 2,578 | 15,476 |
| Construction agreements and divestment gains | 5,075 | 1,495 | 5,648 | 396 | 1,593 |
| Other, incl. project development | (856) | (1,016) | (489) | (613) | (2,319) |
| Onshore | 406 | 499 | 178 | 312 | 1,131 |
| Bioenergy & Other | 1,125 | 1,118 | 503 | 185 | 2,136 |
| Other activities | 55 | 151 | (12) | 98 | 107 |
| Operating profit (loss) (EBIT) | 9,170 | 6,180 | 6,237 | 1,129 | 10,536 |
| Profit (loss) for the period | 7,142 | 2,493 | 5,544 | (825) | 16,716 |
| Income statement (IFRS comparables) | |||||
| Revenue | 32,497 | 28,194 | 13,553 | 9,962 | 50,151 |
| EBITDA | 13,059 | 11,041 | 8,196 | 1,592 | 16,598 |
| Depreciation and amortisation | (3,889) | (3,581) | (1,959) | (1,827) | (7,588) |
| Operating profit (loss) (EBIT) | 9,170 | 7,460 | 6,237 | (235) | 9,010 |
| Gain (loss) on divestment of enterprises | (36) | (17) | (72) | (3) | 10,831 |
| Net financial income and expenses | (885) | (1,786) | (466) | (1,010) | (2,524) |
| Profit (loss) before tax | 8,245 | 5,663 | 5,698 | (1,245) | 17,324 |
| Tax | (1,103) | (2,126) | (154) | (625) | (1,776) |
| Profit (loss) for the period | 7,142 | 3,493 | 5,544 | (1,886) | 15,537 |
| Balance sheet | |||||
| Assets | 223,791 | 193,124 | 223,791 | 193,124 | 196,719 |
| Equity | 96,910 | 85,930 | 96,910 | 85,930 | 97,329 |
| Shareholders in Ørsted A/S | 75,842 | 69,789 | 75,842 | 69,789 | 81,376 |
| Non-controlling interests | 3,084 | 2,909 | 3,084 | 2,909 | 2,721 |
| Hybrid capital | 17,984 | 13,232 | 17,984 | 13,232 | 13,232 |
| Interest-bearing net debt | 12,067 | 22,272 | 12,067 | 22,272 | 12,343 |
| Capital employed | 108,977 | 108,203 | 108,977 | 108,203 | 109,672 |
| Additions to property, plant, and equipment | 15,423 | 14,844 | 8,954 | 10,011 | 28,442 |
| Cash flow | |||||
| Cash flow from operating activities | 11,234 | 7,769 | 3,147 | 8,197 | 16,466 |
| Gross investments | (18,798) | (9,065) | (12,133) | (3,757) | (26,967) |
| Divestments | 10,560 | 52 | 10,591 | 45 | 19,039 |
| Free cash flow | 2,996 | (1,244) | 1,605 | 4,485 | 8,538 |
| Financial ratios | |||||
| Return on capital employed (ROCE)², % | 12.5 | 10.8 | 12.5 | 10.8 | 9.7 |
| FFO/adjusted net debt³, % | 62.9 | 43.4 | 62.9 | 43.4 | 65.0 |
| Number of outstanding shares, end of period, '000 | 420,175 | 419,985 | 420,175 | 419,985 | 420,068 |
| Share price, end of period, DKK | 880 | 765 | 880 | 765 | 1,244 |
| Market capitalisation, end of period, DKK billion | 370 | 321 | 370 | 321 | 522 |
| Earnings per share (EPS) (BP¹), DKK | 15.7 | 5.2 | 12.9 | (2.7) | 38.8 |
| Dividend yield, % | 0.9 | ||||
| Business drivers | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 | 2020 |
| --- | --- | --- | --- | --- | --- |
| Offshore | |||||
| Decided (FID'ed) and installed capacity⁴, GW | 9.8 | 9.9 | 9.8 | 9.9 | 9.9 |
| Installed capacity, GW | 7.6 | 6.8 | 7.6 | 6.8 | 7.6 |
| Generation capacity, GW | 4.0 | 3.8 | 4.0 | 3.8 | 4.4 |
| Wind speed⁵, m/s | 9.2 | 10.4 | 7.8 | 8.4 | 9.8 |
| Load factor, % | 39 | 46 | 29 | 32 | 45 |
| Availability, % | 94 | 93 | 93 | 95 | 94 |
| Power generation, TWh | 7.1 | 7.2 | 2.5 | 2.6 | 15.2 |
| Power sales, TWh | 11.4 | 14.3 | 4.5 | 5.5 | 29.2 |
| Onshore | |||||
| Decided (FID'ed) and installed capacity, GW | 4.6 | 2.1 | 4.6 | 2.1 | 3.4 |
| Installed capacity, GW | 2.5 | 1.6 | 2.5 | 1.6 | 1.7 |
| Wind speed⁵, m/s | 7.5 | 7.8 | 7.3 | 8.0 | 7.6 |
| Load factor, wind⁵, % | 45 | 47 | 45 | 49 | 45 |
| Load factor, solar PV, % | 29 | 20 | 29 | 31 | 20 |
| Availability, wind⁵, % | 95 | 96 | 97 | 96 | 96 |
| Availability, solar PV, % | 90 | 0 | 90 | 0 | 0 |
| Power generation, TWh | 3.6 | 2.7 | 2.0 | 1.6 | 5.7 |
| Bioenergy & Other | |||||
| Degree days, number | 1,812 | 1,501 | 487 | 436 | 2,432 |
| Heat generation, TWh | 5.0 | 4.1 | 1.1 | 1.0 | 6.7 |
| Power generation, TWh | 3.8 | 2.5 | 1.5 | 0.9 | 4.4 |
| Power sales, TWh | 4.5 | 6.6 | 2.2 | 3.0 | 11.6 |
| Gas sales, TWh | 34.0 | 46.7 | 15.1 | 20.1 | 90.3 |
| People and environment | |||||
| Employees (FTE), end of period number | 6,472 | 6,731 | 6,472 | 6,731 | 6,179 |
| Total recordable injury rate (TRIR)⁷ | 3.1 | 3.7 | 3.1 | 3.7 | 3.6 |
| Fatalities, number | 0 | 0 | 0 | 0 | 0 |
| Green share of heat and power generation, % | 89 | 88 | 93 | 86 | 90 |
| GHG intensity, g CO₂e/kWh (scopes 1 & 2) | 56 | 64 | 51 | 84 | 58 |
| GHG emissions, Mtonnes (scope 3) | 9.9 | 13.1 | 4.6 | 5.5 | 25.3 |
Income statement
The income statement (BP¹ comparables) shows business performance numbers for 2020 to form a better like-for-like comparison, in line with the comparison numbers used throughout the management's review.
¹ Business performance.
² EBIT (last 12 months)/average capital employed.
³ FFO last 12 months. Net debt including 50% of hybrid capital and cash and securities not available for use (with the exception of repo transactions). Numbers for 2020 and 2021 have been restated. See note 13 for adjusted definition.
⁴ Nameplate capacity from Q2 2021.
⁵ 2020 numbers restated. See note 2.5 in our ESG Performance Report.
⁶ US only.
⁷ YTD.
Örsted Interim financial report First half year 2021
Management's review
Quarterly overview
| Financials, DKKm | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2019 |
|---|---|---|---|---|---|---|---|---|
| Income statement (BP¹ comparables) | ||||||||
| Revenue | 13,553 | 18,944 | 15,559 | 10,041 | 11,625 | 15,376 | 18,679 | 15,481 |
| EBITDA | 8,196 | 4,863 | 5,003 | 3,360 | 2,956 | 6,805 | 4,613 | 4,116 |
| Offshore | 7,527 | 3,946 | 4,128 | 2,629 | 2,361 | 5,632 | 4,048 | 3,223 |
| Sites, O&M and PPAs | 2,368 | 4,886 | 4,950 | 3,012 | 2,578 | 4,936 | 4,626 | 2,612 |
| Construction agreements and divestment gains | 5,648 | (573) | (149) | 247 | 396 | 1,099 | 51 | 1,188 |
| Other incl. project development | (489) | (367) | (673) | (630) | (613) | (403) | (629) | (577) |
| Onshore | 178 | 228 | 324 | 308 | 312 | 187 | 165 | 308 |
| Bioenergy & Other | 503 | 622 | 643 | 375 | 185 | 933 | 490 | 436 |
| Other activities | (12) | 67 | (92) | 48 | 98 | 53 | (90) | 149 |
| Operating profit (loss) (EBIT) | 6,237 | 2,933 | 3,091 | 1,265 | 1,129 | 5,051 | 2,169 | 2,435 |
| Profit (loss) for the period | 5,544 | 1,598 | 2,189 | 12,034 | (825) | 3,318 | 896 | 1,477 |
| Income statement (IFRS comparables) | ||||||||
| Revenue | 13,553 | 18,944 | 13,195 | 8,762 | 9,962 | 18,232 | 19,815 | 14,543 |
| EBITDA | 8,196 | 4,863 | 3,102 | 2,455 | 1,592 | 9,449 | 5,260 | 3,328 |
| Depreciation and amortisation | (1,959) | (1,930) | (1,912) | (2,095) | (1,827) | (1,754) | (1,876) | (1,681) |
| Impairment losses | - | - | - | - | - | - | (568) | - |
| Operating profit (loss) (EBIT) | 6,237 | 2,933 | 1,190 | 360 | (235) | 7,695 | 2,816 | 1,647 |
| Gain (loss) on divestment of enterprises | (72) | 36 | (291) | 11,139 | (3) | (14) | (13) | (15) |
| Net financial income and expenses | (466) | (419) | (456) | (282) | (1,010) | (776) | (644) | (47) |
| Profit (loss) before tax | 5,698 | 2,547 | 442 | 11,219 | (1,245) | 6,908 | 2,162 | 1,580 |
| Tax | (154) | (949) | 258 | 92 | (625) | (1,501) | (733) | (758) |
| Profit (loss) for the period | 5,544 | 1,598 | 715 | 11,329 | (1,886) | 5,379 | 1,400 | 856 |
| Balance sheet | ||||||||
| Assets | 223,791 | 210,972 | 196,719 | 194,567 | 193,124 | 193,636 | 192,860 | 194,521 |
| Equity | 96,910 | 96,541 | 97,329 | 96,472 | 85,930 | 89,015 | 89,562 | 87,369 |
| Shareholders in Ørsted A/S | 75,842 | 75,835 | 81,376 | 80,450 | 69,789 | 72,728 | 73,082 | 70,977 |
| Non-controlling interests | 3,084 | 2,722 | 2,721 | 2,790 | 2,909 | 3,055 | 3,248 | 3,153 |
| Hybrid capital | 17,984 | 17,984 | 13,232 | 13,232 | 13,232 | 13,232 | 13,232 | 13,239 |
| Interest-bearing net debt | 12,067 | 13,190 | 12,343 | 8,216 | 22,272 | 27,084 | 17,230 | 12,082 |
| Capital employed | 108,977 | 109,731 | 109,672 | 104,688 | 108,203 | 116,098 | 106,792 | 99,451 |
| Additions to property, plant, equipment | 8,954 | 6,469 | 8,121 | 5,477 | 10,011 | 4,833 | 6,560 | 8,449 |
| Cash flow | ||||||||
| Cash flow from operating activities | 3,147 | 8,087 | 6,756 | 1,941 | 8,197 | (428) | 4,816 | 871 |
| Gross investments | (12,133) | (6,665) | (8,639) | (9,263) | (3,757) | (5,308) | (8,816) | (7,222) |
| Divestments | 10,591 | (31) | (1,519) | 20,506 | 45 | 7 | 402 | 260 |
| Free cash flow | 1,605 | 1,391 | (3,402) | 13,184 | 4,485 | (5,729) | (3,598) | (6,091) |
| Financial ratios | ||||||||
| Return on capital employed (ROCE)², % | 12.5 | 7.5 | 9.7 | 9.4 | 10.8 | 11.0 | 10.6 | 29.3 |
| FFO/adjusted net debt³, % | 62.9 | 59.4 | 65.0 | 35.6 | 43.4 | 37.8 | 31.0 | 47.4 |
| Number of outstanding shares, end of period, '000 | 420,175 | 420,068 | 420,068 | 420,066 | 419,985 | 419,985 | 419,985 | 419,985 |
| Share price, end of period, DKK | 880 | 1,025 | 1,244 | 875 | 765 | 666 | 689 | 637 |
| Market capitalisation, end of period, DKK billion | 370 | 430 | 522 | 368 | 321 | 280 | 290 | 267 |
| Earnings per share (EPS) (BP¹), DKK | 12.9 | 2.8 | 4.9 | 28.6 | (2.7) | 8.0 | 1.1 | 3.5 |
| Business drivers | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2019 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Offshore | ||||||||
| Decided (FID'ed) and installed capacity⁴, GW | 9.8 | 9.9 | 9.9 | 9.9 | 9.9 | 9.9 | 9.9 | 9.9 |
| Installed capacity, GW | 7.6 | 7.6 | 7.6 | 6.8 | 6.8 | 6.8 | 6.8 | 5.6 |
| Generation capacity, GW | 4.0 | 4.4 | 4.4 | 4.1 | 3.8 | 3.6 | 3.6 | 3.6 |
| Wind speed⁵, m/s | 7.8 | 10.5 | 9.9 | 8.6 | 8.4 | 12.5 | 10.0 | 8.5 |
| Load factor, % | 29 | 50 | 53 | 35 | 32 | 60 | 50 | 37 |
| Availability, % | 93 | 95 | 94 | 94 | 95 | 93 | 93 | 93 |
| Power generation, TWh | 2.5 | 4.5 | 4.8 | 3.2 | 2.6 | 4.6 | 3.9 | 2.8 |
| Power sales, TWh | 4.5 | 6.9 | 8.6 | 6.3 | 5.5 | 8.8 | 7.7 | 7.0 |
| Onshore | ||||||||
| Decided (FID'ed) and installed capacity, GW | 4.6 | 3.9 | 3.4 | 2.7 | 2.1 | 2.1 | 2.1 | 1.7 |
| Installed capacity, GW | 2.5 | 1.7 | 1.7 | 1.7 | 1.6 | 1.3 | 1.0 | 1.0 |
| Wind speed⁵, m/s | 7.3 | 7.7 | 8.0 | 6.7 | 8.0 | 7.5 | 7.3 | 6.6 |
| Load factor, wind⁶, % | 45 | 45 | 50 | 36 | 49 | 44 | 46 | 39 |
| Load factor, solar PV, % | 29 | - | - | - | - | - | - | - |
| Availability, wind⁶, % | 97 | 93 | 95 | 97 | 96 | 95 | 98 | 98 |
| Availability, solar PV, % | 90 | - | - | - | - | - | - | - |
| Power generation, TWh | 2.0 | 1.6 | 1.8 | 1.2 | 1.6 | 1.1 | 1.0 | 0.9 |
| Bioenergy & Other | ||||||||
| Degree days, number | 487 | 1,325 | 825 | 106 | 436 | 1,065 | 882 | 108 |
| Heat generation, TWh | 1.1 | 3.9 | 2.3 | 0.3 | 1.0 | 3.1 | 3.0 | 0.5 |
| Power generation, TWh | 1.5 | 2.3 | 1.3 | 0.6 | 0.9 | 1.6 | 1.6 | 0.4 |
| Power sales, TWh | 2.2 | 2.3 | 2.6 | 2.4 | 3.0 | 3.6 | 4.1 | 3.3 |
| Gas sales, TWh | 15.1 | 18.9 | 20.3 | 23.2 | 20.1 | 26.7 | 36.7 | 30.8 |
| People and environment | ||||||||
| Employees (FTE) end of period, number | 6,472 | 6,311 | 6,179 | 6,120 | 6,731 | 6,608 | 6,526 | 6,454 |
| Total recordable injury rate (TRIR)⁷ | 3.1 | 3.0 | 3.6 | 3.8 | 3.7 | 3.6 | 4.9 | 4.7 |
| Fatalities, number | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Green share of heat and power generation, % | 93 | 87 | 93 | 90 | 86 | 90 | 90 | 87 |
| GHG intensity, g CO.e/kWh (scopes 1 & 2) | 51 | 59 | 34 | 83 | 84 | 53 | 44 | 62 |
| GHG emissions, Mtonnes (scope 3) | 4.6 | 5.3 | 5.9 | 6.3 | 5.5 | 7.6 | 10.7 | 8.2 |
Income statement
The income statement (BP¹ comparables) shows business performance numbers for 2020 to form a better like-for-like comparison, in line with the comparison numbers used throughout the management's review.
¹ Business performance.
² EBIT (last 12 months)/average capital employed.
³ FFO (last 12 months). Net debt including 50% of hybrid capital and cash and securities not available for use (with the exception of repo transactions). Numbers for 2020 and 2021 have been restated. See note 13 for adjusted definition.
⁴ Nameplate capacity from Q2 2021.
⁵ 2020 numbers restated. See note 2.5 in our ESG Performance Report.
⁶ US only.
⁷ YTD.
Örsted Interim financial report First half year 2021
Consolidated financial statements
First half 2021
1 January – 30 June
22/43
Örsted Interim financial report First half year 2021
Consolidated financial statements
Consolidated statements of income
1 January – 30 June
| Note | Income statement, DKKm | H1 2021 | H1 2020 |
|---|---|---|---|
| 4 | Revenue | 32,497 | 28,194 |
| Cost of sales | (21,754) | (14,536) | |
| Other external expenses | (2,106) | (2,467) | |
| Employee costs | (2,215) | (2,115) | |
| Share of profit (loss) in associates and joint ventures | 59 | 11 | |
| 5 | Other operating income | 6,730 | 2,101 |
| 5 | Other operating expenses | (152) | (147) |
| Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA) | 13,059 | 11,041 | |
| Amortisation, depreciation, and impairment losses on intangible assets, and property, plant, and equipment | (3,889) | (3,581) | |
| Operating profit (loss) (EBIT) | 9,170 | 7,460 | |
| Gain (loss) on divestment of enterprises | (36) | (17) | |
| Share of profit (loss) in associates and joint ventures | (4) | 6 | |
| 6 | Financial income | 1,970 | 1,357 |
| 6 | Financial expenses | (2,855) | (3,143) |
| Profit (loss) before tax | 8,245 | 5,663 | |
| 10 | Tax on profit (loss) for the period | (1,103) | (2,126) |
| Profit (loss) for the period from continuing operations | 7,142 | 3,537 | |
| Profit (loss) for the period from discontinued operations | - | (44) | |
| Profit (loss) for the period | 7,142 | 3,493 | |
| Profit (loss) for the period is attributable to: | |||
| Shareholders in Ørsted A/S | 6,584 | 3,178 | |
| Interests and costs, hybrid capital owners of Ørsted A/S | 575 | 326 | |
| Non-controlling interests | (17) | (11) | |
| Profit (loss) per share¹, DKK: | |||
| From continuing operations | 15.7 | 7.7 | |
| From discontinued operations | - | (0.1) | |
| Total profit (loss) per share | 15.7 | 7.6 |
¹ Diluted profit (loss) per share corresponds to profit (loss) per share, as the dilutive effect of the share incentive programme is less than 0.1% of the share capital.
† Discontinued operations related to our Oil & Gas business which was sold to INEOS in 2017. We ended the reporting on discontinued operations as of 31 December 2020. Provisions regarding tax indemnifications and payments related to the Fredericia stabilisation plant (DKK 705 million) were transferred to continuing operations at 31 December 2020.
1 January – 30 June
| Statement of comprehensive income, DKKm | H1 2021 | H1 2020 |
|---|---|---|
| Profit (loss) for the period | 7,142 | 3,493 |
| Other comprehensive income: | ||
| Cash flow hedging: | ||
| Value adjustments for the period | (12,759) | (1,081) |
| Value adjustments transferred to income statement | 2,383 | 514 |
| Value adjustments transferred to balance sheet | (48) | - |
| Exchange rate adjustments: | ||
| Exchange rate adjustments relating to net investments in foreign enterprises | 3,357 | (4,260) |
| Value adjustment of net investment hedges | (1,977) | 2,111 |
| Tax: | ||
| Tax on hedging instruments | 1,846 | 97 |
| Tax on exchange rate adjustments | (84) | 476 |
| Other: | ||
| Share of other comprehensive income of associated companies, after tax | 9 | (7) |
| Other comprehensive income | (7,273) | (2,150) |
| Total comprehensive income | (131) | 1,343 |
| Comprehensive income for the period is attributable to: | ||
| Shareholders in Ørsted A/S | (800) | 1,173 |
| Interest payments and costs, hybrid capital owners of Ørsted A/S | 575 | 326 |
| Non-controlling interests | 94 | (156) |
| Total comprehensive income | (131) | 1,343 |
† Value adjustments for the period in H1 2021 are mainly due to losses on power hedges due to the increase in power prices and to a lesser extent losses on currency and inflation hedges.
Accounting policies
Cease the use of business performance as of 1 January 2021
From 1 January 2021, we only report IFRS numbers. Thus, the business performance and adjustment columns are no longer included in our financial reporting.
Compared with the business performance principle, the H1 2021 IFRS EBITDA was positively impacted by DKK 645 million from hedge values that would have been recognised as a loss under business performance. However, as this loss has already been recognised in prior periods under IFRS, H1 2021 was not impacted.
See note 2 'Business performance' for more information.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
Consolidated statements of income
1 April – 30 June
| Note | Income statement, DKKm | Q2 2021 | Q2 2020 |
|---|---|---|---|
| 4 | Revenue | 13,553 | 9,962 |
| Cost of sales | (8,843) | (6,517) | |
| Other external expenses | (1,175) | (1,208) | |
| Employee costs | (1,176) | (1,092) | |
| Share of profit (loss) in associates and joint ventures | 21 | 7 | |
| 5 | Other operating income | 5,907 | 514 |
| 5 | Other operating expenses | (91) | (74) |
| Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA) | 8,196 | 1,592 | |
| Amortisation, depreciation, and impairment losses on intangible assets, and property, plant, and equipment | (1,959) | (1,827) | |
| Operating profit (loss) (EBIT) | 6,237 | (235) | |
| Gain (loss) on divestment of enterprises | (72) | (3) | |
| Share of profit (loss) in associates and joint ventures | (1) | 3 | |
| Financial income | 1,485 | 552 | |
| Financial expenses | (1,951) | (1,562) | |
| Profit (loss) before tax | 5,698 | (1,245) | |
| Tax on profit (loss) for the period | (154) | (625) | |
| 10 | Profit (loss) for the period from continuing operations | 5,544 | (1,870) |
| Profit (loss) for the period from discontinued operations | - | (16) | |
| Profit (loss) for the period | 5,544 | (1,886) | |
| Profit (loss) for the period is attributable to: | |||
| Shareholders in Ørsted A/S | 5,410 | (2,201) | |
| Interests and costs, hybrid capital owners of Ørsted A/S | 160 | 326 | |
| Non-controlling interests | (26) | (11) | |
| Profit (loss) per share, DKK: | |||
| From continuing operations | 12.9 | (5.2) | |
| From discontinued operations | 0.0 | 0.0 | |
| Total profit (loss) per share | 12.9 | (5.2) |
1 April – 30 June
| Statement of comprehensive income, DKKm | Q2 2021 | Q2 2020 |
|---|---|---|
| Profit (loss) for the period | 5,544 | (1,886) |
| Other comprehensive income: | ||
| Cash flow hedging: | ||
| Value adjustments for the period | (6,903) | (471) |
| Value adjustments transferred to income statement | 365 | 448 |
| Value adjustments transferred to balance sheet | (4) | - |
| Exchange rate adjustments: | ||
| Exchange rate adjustments relating to net investment in foreign enterprises | (417) | (1,991) |
| Value adjustment of net investment hedges | 159 | 963 |
| Tax: | ||
| Tax on hedging instruments | 1,222 | 85 |
| Tax on exchange rate adjustments | 61 | 203 |
| Other: | ||
| Share of other comprehensive income of associated companies, after tax | - | 3 |
| Other comprehensive income | (5,517) | (760) |
| Total comprehensive income | 27 | (2,646) |
| Comprehensive income for the period is attributable to: | ||
| Shareholders in Ørsted A/S | (83) | (2,877) |
| Interest payments and costs after tax, hybrid capital owners of Ørsted A/S | 160 | 326 |
| Non-controlling interests | (50) | (95) |
| Total comprehensive income | 27 | (2,646) |
Örsted Interim financial report First half year 2021
Consolidated financial statements
Consolidated balance sheet
| Note | Assets, DKKm | 30 June 2021 | 31 December 2020 | 30 June 2020 |
|---|---|---|---|---|
| Intangible assets | 1,037 | 639 | 504 | |
| Land and buildings | 6,095 | 5,574 | 5,073 | |
| Production assets | 86,533 | 86,184 | 80,463 | |
| Fixtures and fittings, tools, and equipment | 529 | 507 | 588 | |
| Property, plant, and equipment under construction | 44,265 | 29,345 | 27,868 | |
| Property, plant, and equipment | 137,422 | 121,610 | 113,992 | |
| Investments in associates and joint ventures | 668 | 555 | 542 | |
| Other securities and equity investments | 222 | 209 | 227 | |
| Deferred tax | 6,437 | 6,784 | 8,441 | |
| Other receivables | 2,416 | 1,925 | 3,019 | |
| Other non-current assets | 9,743 | 9,473 | 12,229 | |
| Non-current assets | 148,202 | 131,722 | 126,725 | |
| Inventories | 10,091 | 14,739 | 11,417 | |
| 12 | Derivatives | 11,794 | 6,109 | 7,841 |
| Contract assets | 2 | 30 | 1,216 | |
| Trade receivables | 6,073 | 6,732 | 4,723 | |
| Other receivables | 5,073 | 3,720 | 4,294 | |
| Income tax | 3,104 | 852 | 1,176 | |
| 12 | Securities | 30,401 | 25,173 | 12,327 |
| Cash | 7,724 | 6,178 | 6,754 | |
| Current assets | 74,262 | 63,533 | 49,748 | |
| Assets classified as held for sale | 1,327 | 1,464 | 16,651 | |
| Assets | 223,791 | 196,719 | 193,124 |
Assets and liabilities classified as held for sale
Assets classified as held for sale at 30 June 2021
comprised our oil pipe system in Denmark.
| Note | Equity and liabilities, DKKm | 30 June 2021 | 31 December 2020 | 30 June 2020 |
|---|---|---|---|---|
| 9 | Share capital | 4,204 | 4,204 | 4,204 |
| Reserves | (9,349) | (1,956) | (1,585) | |
| Retained earnings | 80,987 | 74,294 | 67,170 | |
| Proposed dividends | - | 4,834 | - | |
| Equity attributable to shareholders in Ørsted A/S | 75,842 | 81,376 | 69,789 | |
| Hybrid capital | 17,984 | 13,232 | 13,232 | |
| Non-controlling interests | 3,084 | 2,721 | 2,909 | |
| Equity | 96,910 | 97,329 | 85,930 | |
| Deferred tax | 3,581 | 2,187 | 3,903 | |
| Provisions | 14,002 | 12,475 | 12,203 | |
| Lease liabilities | 4,885 | 4,455 | 4,444 | |
| 13 | Bond and bank debt | 34,565 | 34,374 | 32,975 |
| Contract liabilities | 3,317 | 3,650 | 3,703 | |
| Tax equity liabilities | 7,876 | 6,780 | 7,595 | |
| Other payables | 763 | 374 | 463 | |
| Non-current liabilities | 68,989 | 64,295 | 65,286 | |
| Provisions | 577 | 1,388 | 455 | |
| Lease liabilities | 653 | 599 | 653 | |
| 13 | Bond and bank debt | 9,884 | 2,392 | 2,052 |
| 12 | Derivatives | 23,260 | 6,318 | 5,387 |
| Contract liabilities | 386 | 480 | 435 | |
| Trade payables | 10,943 | 9,742 | 12,933 | |
| Tax equity liabilities | 1,298 | 1,187 | 630 | |
| Other payables | 4,694 | 6,082 | 4,846 | |
| Income tax | 5,509 | 6,220 | 6,048 | |
| Current liabilities | 57,204 | 34,408 | 33,439 | |
| Liabilities | 126,193 | 98,703 | 98,725 | |
| Liabilities relating to assets classified as held for sale | 688 | 687 | 8,469 | |
| Equity and liabilities | 223,791 | 196,719 | 193,124 |
Örsted Interim financial report First half year 2021
Consolidated financial statements
Consolidated statement of shareholders equity
| DKKm | 2021 | 2020 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share capital | Reserves* | Retained earnings | Proposed dividends | Share-holders in Ørsted A/S | Hybrid capital | Non-controlling interests | Total Group | Share capital | Reserves* | Retained earnings | Proposed dividends | Share-holders in Ørsted A/S | Hybrid capital | Non-controlling interests | Total Group | |
| Equity at 1 January | 4,204 | (1,956) | 74,294 | 4,834 | 81,376 | 13,232 | 2,721 | 97,329 | 4,204 | 413 | 64,051 | 4,414 | 73,082 | 13,232 | 3,248 | 89,562 |
| Comprehensive income for the period: | ||||||||||||||||
| Profit (loss) for the period | - | - | 6,584 | - | 6,584 | 575 | (17) | 7,142 | - | - | 3,178 | - | 3,178 | 326 | (11) | 3,493 |
| Other comprehensive income: | ||||||||||||||||
| Cash-flow hedging | - | (10,424) | - | - | (10,424) | - | - | (10,424) | - | (567) | - | - | (567) | - | - | (567) |
| Exchange rate adjustments | - | 1,269 | - | - | 1,269 | - | 111 | 1,380 | - | (2,004) | - | - | (2,004) | - | (145) | (2,149) |
| Tax on other comprehensive income | - | 1,762 | - | - | 1,762 | - | - | 1,762 | - | 573 | - | - | 573 | - | - | 573 |
| Share of other comprehensive income of associated companies, after tax | - | - | 9 | - | 9 | - | - | 9 | - | - | (7) | - | (7) | - | - | (7) |
| Total comprehensive income | - | (7,393) | 6,593 | - | (800) | 575 | 94 | (131) | - | (1,998) | 3,171 | - | 1,173 | 326 | (156) | 1,343 |
| Coupon payments, hybrid capital | - | - | - | - | - | (268) | - | (268) | - | - | - | - | - | (326) | - | (326) |
| Tax, hybrid capital | - | - | - | - | - | 89 | - | 89 | - | - | - | - | - | - | - | - |
| Additions, hybrid capital | - | - | - | - | - | 7,327 | - | 7,327 | - | - | - | - | - | - | - | - |
| Disposals, hybrid capital | - | - | - | - | - | (2,971) | - | (2,971) | - | - | - | - | - | - | - | - |
| Dividends paid | - | - | 4 | (4,834) | (4,830) | - | (183) | (5,013) | - | - | 4 | (4,414) | (4,410) | - | (185) | (4,595) |
| Purchases of treasury shares | - | - | - | - | - | - | - | - | - | - | (58) | - | (58) | - | - | (58) |
| Additions, non-controlling interests | - | - | 83 | - | 83 | - | 450 | 533 | - | - | - | - | - | - | - | - |
| Other changes | - | - | 13 | - | 13 | - | 2 | 15 | - | - | 2 | - | 2 | - | 2 | 4 |
| Equity at 30 June | 4,204 | (9,349) | 80,987 | - | 75,842 | 17,984 | 3,084 | 96,910 | 4,204 | (1,585) | 67,170 | - | 69,789 | 13,232 | 2,909 | 85,930 |
- See note 9 'Reserves' for more information about reserves.
In February 2021, we issued two new hybrid capital bonds with a nominal amount of EUR 500 million and GBP 425 million with a fixed annual coupon of 1.50 % (until 2031) and 2.50 % (until 2033), respectively. Both maturing in 2021.
In addition, we redeemed EUR 350 million of our 3013 hybrid capital bond in February 2021.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
Consolidated statement of cash flows
| Note | Statement of cash flows, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
|---|---|---|---|---|---|
| 2 | Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA), IFRS | 13,059 | 11,041 | 8,196 | 1,592 |
| Change in derivatives, business performance adjustments | - | (1,280) | - | 1,364 | |
| Change in derivatives, other adjustments | (475) | (514) | 336 | 680 | |
| Change in provisions | 645 | (365) | 15 | (349) | |
| Reversal of gain (loss) on divestment of assets | (5,678) | (1,288) | (5,458) | (71) | |
| Other items | (46) | (7) | 15 | (43) | |
| Change in work in progress | 3,754 | (2,015) | (857) | (177) | |
| Change in tax equity partner liabilities | 619 | 2,892 | 866 | 3,017 | |
| Change in other working capital | 1,178 | 1,821 | 729 | 2,904 | |
| Interest received and similar items | 933 | 2,326 | 610 | 694 | |
| Interest paid and similar items | (1,569) | (3,489) | (992) | (1,328) | |
| Income tax paid | (1,186) | (1,353) | (313) | (86) | |
| Cash flows from operating activities | 11,234 | 7,769 | 3,147 | 8,197 | |
| 7 | Purchase of intangible assets, and property, plant, and equipment | (14,129) | (9,008) | (7,481) | (3,770) |
| Sale of intangible assets, and property, plant, and equipment | 10,177 | 80 | 10,202 | 57 | |
| Acquisition of enterprises | (2,359) | 1 | (2,348) | (3) | |
| Divestment of enterprises | (145) | (22) | (114) | (5) | |
| Purchase of other equity investments | (15) | (11) | (11) | (2) | |
| Purchase of securities | (7,065) | (4,133) | (1,025) | (593) | |
| Sale/maturation of securities | 1,646 | 8,250 | 663 | 1,373 | |
| Change in other non-current assets | 25 | - | 2 | - | |
| Transactions with associates and joint ventures | (26) | (47) | (26) | 18 | |
| Dividends received and capital reduction | 28 | - | 28 | - | |
| Cash flows from investing activities | (11,863) | (4,890) | (110) | (2,925) | |
| Note | Statement of cash flows, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
| --- | --- | --- | --- | --- | --- |
| Proceeds from raising of loans | 6,865 | 328 | (952) | (3,311) | |
| Instalments on loans | (1,329) | (977) | (1,713) | (407) | |
| Instalments on leases | (184) | (226) | (111) | (112) | |
| Coupon payments on hybrid capital | (268) | (326) | (162) | (326) | |
| Repurchase of hybrid capital | (2,971) | - | - | - | |
| Proceeds from issuance of hybrid capital | 7,327 | - | - | - | |
| Dividends paid to shareholders in Ørsted A/S | (4,830) | (4,410) | - | - | |
| Purchase of own shares | - | (58) | - | (58) | |
| Transactions with non-controlling interests | 330 | (228) | 471 | (89) | |
| Net proceeds from tax equity partners | 25 | 3 | (95) | 23 | |
| Change in collateral related to derivatives | (2,177) | 2,376 | (408) | 586 | |
| Cash flows from financing activities | 2,788 | (3,518) | (2,970) | (3,694) | |
| Cash flows from continuing operations | 2,159 | (639) | 67 | 1,578 | |
| Cash flows from discontinued operations | - | (44) | - | 102 | |
| Total net change in cash and cash equivalents for the period | 2,159 | (683) | 67 | 1,680 | |
| Cash and cash equivalents at the beginning of the period | 5,210 | 6,459 | 7,478 | 4,223 | |
| Total net change in cash and cash equivalents | 2,159 | (683) | 67 | 1,680 | |
| Exchange rate adjustments of cash and cash equivalents | 182 | 103 | 6 | (24) | |
| Cash and cash equivalents at 30 June | 7,551 | 5,879 | 7,551 | 5,879 |
Change in work in progress
'Change in work in progress' consists of elements in contract assets, contract liabilities, and construction management agreements related to construction of offshore wind farms and construction of offshore transmission assets as well as the related trade payables.
Statement of cash flows
Our supplementary statement of gross and net investments appears from note 8 'Gross and net investments' and free cash flows (FCF) from note 3 'Segment information'.
'Cash' according to the balance sheet as at 30 June 2021 includes 'Cash, not available for use', amounting to DKK 164 million and 'Bank overdrafts that are part of the ongoing cash management' amounting to DKK 9 million.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
1. Basis of reporting
This section provides an overall description of our accounting policies as well as an overview of the impact of new and amended accounting standards and interpretations.
Accounting policies
Ørsted is a listed public company, headquartered in Denmark.
This interim financial report for the first half-year of 2021 comprises the interim financial statements of Ørsted A/S (the parent company) and any subsidiaries controlled by Ørsted A/S.
The interim financial report has been prepared in accordance with the International Financial Reporting Standards (IFRS), IAS 34 'Interim Financial Reporting' as adopted by the EU, and further requirements in the Danish Financial Statements Act (Årsregnskabsloven) for the presentation of quarterly interim reports by listed companies.
The interim financial report for the first half year of 2021 follows the same accounting policies as the annual report for 2020, except for any new, amended, or revised accounting standards and interpretations (IFRSs) endorsed by the EU, effective for the accounting period beginning on 1 January 2021.
Any new or amended standards and interpretations that may impact Ørsted are presented in the section below.
Definitions of alternative performance measures can be found on page 89 of the annual report for 2020.
This interim financial report contains selected accounting policies and should therefore be read in conjunction with the annual report for 2020.
Cease the use of business performance as of 1 January 2021
From 1 January 2021, we only report IFRS numbers. Thus, the business performance and adjustment columns are no longer included in our financial reporting. This will simplify our reporting and avoid potential conflicts with future reporting requirements for alternative performance measures.
See note 2 'Business performance' for more information.
Implementation of new or changed accounting standards and interpretations
Effective from 1 January 2021, we implemented the following changed accounting standard (IAS and IFRS) and interpretations:
- Amendments to IFRS 9 and IFRS 7: Interest Rate Benchmark Reform — phase 2.
The adoption of the changed accounting standard has not impacted our interim financial report and is not expected to impact the consolidated financial statements for 2021.
Key accounting estimates and judgements
On 9 June 2021, we acquired all of the membership interests in Brookfield Renewable Ireland, effectively gaining control of the company, which has been incorporated in our Onshore business area.
We have made a number of estimates and judgements when we recognised the assets and liabilities as a result of the acquisition. The accounting estimates and judgements, which may entail a risk of material adjustments in subsequent years, are listed below. Except for the below mentioned accounting estimate for purchase price allocations in business combinations, the assessment of the key accounting estimates and judgements are the same as in the annual report for 2020.
Purchase price allocations in business combinations
When we apply the acquisition method for business combinations, by nature this involves judgement in assessing the fair value of identifiable assets and liabilities. Fair value calculations are based on a number of estimates regarding WACC and expected future cash flows from financial budgets and forecasts which include a number of assumptions and estimates. These assumptions include future market conditions, market prices of power, estimated discount rates, estimated useful lives of the projects, etc. The market prices applied are based on available forward prices for a period of up to five years and our best estimate of long-term prices for the remainder of the period.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
2. Business performance
| DKKm | H1 2020 | ||
|---|---|---|---|
| Business performance | Adjustments | IFRS | |
| Revenue | 27,001 | 1,193 | 28,194 |
| Cost of sales | (14,623) | 87 | (14,536) |
| Operating profit (loss) before depreciation, amortisation, and impairment losses (EBITDA) | 9,761 | 1,280 | 11,041 |
| EBIT | 6,180 | 1,280 | 7,460 |
| Tax on profit (loss) for the period | (1,846) | (280) | (2,126) |
| Profit for the year | 2,493 | 1,000 | 3,493 |
With the implementation of IFRS 9 in 2018, it has become significantly easier to apply IFRS hedge accounting to our commodity hedges. We have concluded that IFRS 9 can replace our business performance principle, and we have therefore reported based on IFRS only from 1 January 2021.
Among other things, IFRS 9 has made it easier to apply hedge accounting by the removal of the 80-125 % effectiveness requirement, as compliance can be difficult in connection with proxy hedging. For example, we use proxy hedging to hedge our power exposure 4-5 years into the future with gas hedges due to illiquidity in the market for power hedges with this time horizon.
Since we did not apply IFRS hedge accounting in 2020, the IFRS 2021 numbers are not fully comparable to the IFRS 2020 numbers. Therefore, we use EBITDA according to the business performance principle in 2020 as comparable for EBITDA in the 'Management's review' for 2021.
At the end of 2020, the value of our business performance hedges deferred to a future period was DKK -2.7 billion, of which DKK -1.1 billion relate to 2021. This net loss was recognised in the income statement under IFRS in previous years, as we have not previously applied hedge accounting.
Consequently, for the period 2021-2025, EBITDA (according to IFRS) will be higher by a similar amount compared to what the business performance EBITDA would have been if we had continued to report based on this principle. For H1 2021, EBITDA according to IFRS was DKK 645 million higher than if we had kept reporting according to the business performance principle. This amount primarily related to site EBITDA in Offshore and the remaining part related to our CHP plants and gas activities in Bioenergy & Other.
The installation of the 16th turbine at Hornsea 2 which also marked Ørsted's 1,000th offshore wind turbine in UK waters, UK.
Örsted Interim financial report First half year 2021
Consolidated financial statements
3. Segment information
| H1 2021 | ||||||
|---|---|---|---|---|---|---|
| Income statement, DKKm | Offshore | Onshore | Bioenergy & Other | Reportable segments | Other activities/ eliminations | Total |
| External revenue | 19,284 | 227 | 12,992 | 32,503 | (6) | 32,497 |
| Intra-group revenue | 2,941 | - | (405) | 2,536 | (2,536) | - |
| Revenue | 22,225 | 227 | 12,587 | 35,039 | (2,542) | 32,497 |
| Cost of sales | (13,801) | (9) | (10,438) | (24,248) | 2,494 | (21,754) |
| Employee costs and other external expenses | (2,978) | (422) | (1,026) | (4,426) | 105 | (4,321) |
| Gain (loss) on disposal of non-current assets | 5,678 | - | - | 5,678 | - | 5,678 |
| Additional other operating income and expenses | 291 | 610 | 1 | 902 | (2) | 900 |
| Share of profit (loss) in associates and joint ventures | 58 | - | 1 | 59 | - | 59 |
| EBITDA | 11,473 | 406 | 1,125 | 13,004 | 55 | 13,059 |
| Depreciation and amortisation | (3,049) | (329) | (394) | (3,772) | (117) | (3,889) |
| Impairment losses | - | - | - | - | - | - |
| Operating profit (loss) (EBIT) | 8,424 | 77 | 731 | 9,232 | (62) | 9,170 |
| Key ratios | ||||||
| Intangible assets, and property, plant, and equipment | 94,777 | 34,380 | 7,901 | 137,058 | 1,401 | 138,459 |
| Equity investments and non-current receivables | 543 | 35 | 157 | 735 | 167 | 902 |
| Net working capital, work in progress | 6,463 | - | - | 6,463 | - | 6,463 |
| Net working capital, tax equity | - | (8,338) | - | (8,338) | - | (8,338) |
| Net working capital, capital expenditures | (3,764) | (1,203) | (24) | (4,991) | - | (4,991) |
| Net working capital, other items | 3,161 | 367 | (2,008) | 1,520 | 179 | 1,699 |
| Derivatives, net | (6,594) | (3,223) | (2,790) | (12,607) | 1,141 | (11,466) |
| Assets classified as held for sale, net | - | - | 654 | 654 | - | 654 |
| Decommissioning obligations | (5,482) | (1,003) | (1,283) | (7,768) | - | (7,768) |
| Other provisions | (3,928) | (105) | (1,946) | (5,979) | (832) | (6,811) |
| Tax, net | 2,347 | (2,902) | 1,064 | 509 | (58) | 451 |
| Other receivables and other payables, net | 339 | (40) | 2 | 301 | (578) | (277) |
| Capital employed at 30 June | 87,862 | 17,968 | 1,727 | 107,557 | 1,420 | 108,977 |
| Return on capital employed (ROCE), % | - | - | - | - | - | 12.5 |
| Cash flow from operating activities | 6,507 | 411 | 4,293 | 11,211 | 23 | 11,234 |
| Gross investments | (10,360) | (8,280) | (89) | (18,729) | (69) | (18,798) |
| Divestments | 10,669 | - | (203) | 10,466 | 94 | 10,560 |
| Free cash flow (FCF) | 6,816 | (7,869) | 4,001 | 2,948 | 48 | 2,996 |
New corporate structure
On 28 January 2021, we announced a change to our organisational structure effective from 4 February 2021. The change entails moving from a business unit structure to a more functional structure where the commercially focused functions from the former business units Offshore and Markets & Bioenergy will be brought together. Onshore will remain a separate business unit. We are making these changes in our organisation to establish an even stronger customer and market focus, to further strengthen the focus on EPC and operations, and to support the scaling of our organisation as we continue our strong growth trajectory.
Extremally, we will continue to report Offshore and Onshore financials as we have done previously. Our former Markets & Bioenergy will be named 'Bioenergy & Other' going forward and will, as previously, include our CHP plants, legacy gas activities, B2B activities and Renescience activities.
The column 'Other activities/eliminations' primarily covers the elimination of inter-segment transactions. It also includes income and costs, assets and liabilities, investment activity, taxes, etc., handled at Group level.
Including the elimination of other activities, the total elimination of intra-group revenue amounts to DKK 3,824 million, which primarily relates to our Shared Functions services as well as our B2B business activities.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
3. Segment information (continued)
| H1 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Income statement, DKKm | Offshore | Onshore | Bioenergy & Other | Reportable segments | Other activities/ eliminations | Business performance | Adjustments | IFRS |
| External revenue | 15,066 | 302 | 11,627 | 26,995 | 6 | 27,001 | 1,193 | 28,194 |
| Intra-group revenue | 2,273 | (5) | (223) | 2,045 | (2,045) | - | - | - |
| Revenue | 17,339 | 297 | 11,404 | 29,040 | (2,039) | 27,001 | 1,193 | 28,194 |
| Cost of sales | (7,853) | 5 | (8,706) | (16,554) | 1,931 | (14,623) | 87 | (14,536) |
| Employee costs and other external expenses | (2,892) | (315) | (1,635) | (4,842) | 260 | (4,582) | - | (4,582) |
| Gain (loss) on disposal of non-current assets | 1,217 | 34 | 37 | 1,288 | - | 1,288 | - | 1,288 |
| Additional other operating income and expenses | 171 | 478 | 18 | 667 | (1) | 666 | - | 666 |
| Share of profit (loss) in associates and joint ventures | 11 | - | - | 11 | - | 11 | - | 11 |
| EBITDA | 7,993 | 499 | 1,118 | 9,610 | 151 | 9,761 | 1,280 | 11,041 |
| Depreciation and amortisation | (2,860) | (207) | (400) | (3,467) | (114) | (3,581) | - | (3,581) |
| Impairment losses | - | - | - | - | - | - | - | - |
| Operating profit (loss) (EBIT) | 5,133 | 292 | 718 | 6,143 | 37 | 6,180 | 1,280 | 7,460 |
| Key ratios | ||||||||
| Intangible assets, and property, plant, and equipment | 85,620 | 18,819 | 8,306 | 112,745 | 1,751 | 114,496 | - | 114,496 |
| Equity investments and non-current receivables | 1,849 | - | 239 | 2,088 | 153 | 2,241 | - | 2,241 |
| Net working capital, work in progress | 10,029 | - | 1 | 10,030 | - | 10,030 | - | 10,030 |
| Net working capital, tax equity | - | (7,588) | - | (7,588) | - | (7,588) | - | (7,588) |
| Net working capital, capital expenditures | (9,006) | (89) | (26) | (9,121) | - | (9,121) | - | (9,121) |
| Net working capital, other items | 3,777 | 80 | (2,964) | 893 | 199 | 1,092 | - | 1,092 |
| Derivatives, net | 552 | (241) | 2,007 | 2,318 | 136 | 2,454 | - | 2,454 |
| Assets classified as held for sale, net | - | - | 8,182 | 8,182 | - | 8,182 | - | 8,182 |
| Decommissioning obligations | (4,797) | (383) | (1,310) | (6,490) | - | (6,490) | - | (6,490) |
| Other provisions | (3,797) | - | (1,639) | (5,436) | (732) | (6,168) | - | (6,168) |
| Tax, net | 717 | (1,990) | 856 | (417) | 83 | (334) | - | (334) |
| Other receivables and other payables, net | (633) | - | 18 | (615) | 24 | (591) | - | (591) |
| Capital employed at 30 June | 84,311 | 8,608 | 13,670 | 106,589 | 1,614 | 108,203 | - | 108,203 |
| Of which, capital employed for discontinued operations | (34) | - | (34) | |||||
| Of which, capital employed for continuing operations | 108,237 | - | 108,237 | |||||
| Return on capital employed (ROCE), % | - | - | - | - | - | 10.8 | - | - |
| Cash flow from operating activities | 2,785 | 3,162 | 2,374 | 8,321 | (552) | 7,769 | - | 7,769 |
| Gross investments | (7,094) | (1,481) | (423) | (8,998) | (67) | (9,065) | - | (9,065) |
| Divestments | (141) | 114 | 80 | 53 | (1) | 52 | - | 52 |
| Free cash flow (FCF) | (4,450) | 1,795 | 2,031 | (624) | (620) | (1,244) | - | (1,244) |
Profit (loss) and cash flows are shown only for continuing operations.
The column 'Other activities/ eliminations' primarily covers the elimination of inter-segment transactions. It also includes income and costs, assets and liabilities, investment activity, taxes, etc., handled at Group level.
1 Including the elimination of other activities, the total elimination of intra-group revenue amounts to DKK 3,440 million, which primarily relates to our Shared Functions services as well as our B2B, B2C, and power distribution businesses activities.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
3. Segment information (continued)
| Q2 2021, Income statement and FCF, DKKm | Offshore | Onshore | Bioenergy & Other | Reporting segments | Other activities/ eliminations | Business performance | Adjustments | IFRS |
|---|---|---|---|---|---|---|---|---|
| External revenue | 7,565 | 93 | 5,709 | 13,367 | 186 | 13,553 | ||
| Intra-group revenue | 1,375 | 14 | (142) | 1,247 | (1,247) | - | ||
| Revenue | 8,940 | 107 | 5,567 | 14,614 | (1,061) | 13,553 | ||
| Cost of sales | (5,306) | (4) | (4,556) | (9,866) | 1,023 | (8,843) | ||
| Employee costs and other external expenses | (1,618) | (249) | (512) | (2,379) | 28 | (2,351) | ||
| Gain (loss) on disposal of non-current assets | 5,458 | - | - | 5,458 | - | 5,458 | ||
| Additional other operating income and expenses | 33 | 324 | 3 | 360 | (2) | 358 | ||
| Share of profit (loss) in associates and joint ventures | 20 | - | 1 | 21 | - | 21 | ||
| EBITDA | 7,527 | 178 | 503 | 8,208 | (12) | 8,196 | ||
| Depreciation and amortisation | (1,502) | (201) | (194) | (1,897) | (62) | (1,959) | ||
| Impairment losses | - | - | - | - | - | - | ||
| Operating profit (loss) (EBIT) | 6,025 | (23) | 309 | 6,311 | (74) | 6,237 | ||
| Cash flow from operating activities | 1,301 | 857 | 1,275 | 3,433 | (286) | 3,147 | ||
| Gross investments | (5,793) | (6,275) | (30) | (12,098) | (35) | (12,133) | ||
| Divestments | 10,702 | (1) | (174) | 10,527 | 64 | 10,591 | ||
| Free cash flow (FCF) | 6,210 | (5,419) | 1,071 | 1,862 | (257) | 1,605 | ||
| Q2 2020, Income statement and FCF, DKKm | ||||||||
| External revenue | 8,377 | 165 | 4,003 | 12,545 | (920) | 11,625 | (1,663) | 9,962 |
| Intra-group revenue | 987 | (5) | (108) | 874 | (874) | - | - | - |
| Revenue | 9,364 | 160 | 3,895 | 13,419 | (1,794) | 11,625 | (1,663) | 9,962 |
| Cost of sales | (5,594) | 5 | (2,985) | (8,574) | 1,758 | (6,816) | 299 | (6,517) |
| Employee costs and other external expenses | (1,512) | (157) | (767) | (2,436) | 136 | (2,300) | - | (2,300) |
| Gain (loss) on disposal of non-current assets | - | 34 | 37 | 71 | - | 71 | - | 71 |
| Additional other operating income and expenses | 95 | 270 | 6 | 371 | (2) | 369 | - | 369 |
| Share of profit (loss) in associates and joint ventures | 8 | - | (1) | 7 | - | 7 | - | 7 |
| EBITDA | 2,361 | 312 | 185 | 2,858 | 98 | 2,956 | (1,364) | 1,592 |
| Depreciation and amortisation | (1,452) | (109) | (208) | (1,769) | (58) | (1,827) | - | (1,827) |
| Impairment losses | - | - | - | - | - | - | - | - |
| Operating profit (loss) (EBIT) | 909 | 203 | (23) | 1,089 | 40 | 1,129 | (1,364) | (235) |
| Cash flow from operating activities | 4,338 | 3,209 | 817 | 8,364 | (167) | 8,197 | - | 8,197 |
| Gross investments | (2,802) | (733) | (179) | (3,714) | (43) | (3,757) | - | (3,757) |
| Divestments | (150) | 114 | 81 | 45 | - | 45 | - | 45 |
| Free cash flow (FCF) | 1,386 | 2,590 | 719 | 4,695 | (210) | 4,485 | - | 4,485 |
Profit (loss) and cash flows are shown only for continuing operations.
The column 'Other activities/ eliminations' primarily covers the elimination of inter-segment transactions. It also includes income and costs, assets and liabilities, investment activity, taxes, etc., handled at Group level.
1 Including the elimination of other activities, the total elimination of intra-group revenue amounts to DKK 1,892 million (Q2 2020: DKK 1,560 million), which primarily relates to our Shared Functions services as well as our B2B businesses and for Q2 2020 our B2C, and power distribution business activities as well.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
4. Revenue
| Revenue, DKKm | Offshore | Onshore | Bioenergy & Other | Other activities/ eliminations | H1 2021 total | Offshore | Onshore | Bioenergy & Other | Other activities/ eliminations | H1 2020 total |
|---|---|---|---|---|---|---|---|---|---|---|
| Sale of gas | - | - | 5,424 | 4 | 5,428 | - | - | 3,915 | 5 | 3,920 |
| Generation of power | 3,376 | 349 | 2,306 | - | 6,031 | 2,023 | 222 | 840 | - | 3,085 |
| Sale of power | 7,540 | - | 2,521 | (2,398) | 7,663 | 4,684 | - | 3,059 | (2,070) | 5,673 |
| Revenue from construction of offshore wind farms | 5,135 | - | - | - | 5,135 | 3,049 | - | - | - | 3,049 |
| Generation and sale of heat and steam | - | - | 1,609 | - | 1,609 | - | - | 1,602 | - | 1,602 |
| Distribution and transmission | - | - | 157 | (1) | 156 | - | - | 1,128 | (2) | 1,126 |
| Other revenue | 1,193 | - | 111 | (23) | 1,281 | 931 | 26 | 453 | (39) | 1,371 |
| Total revenue from customers, IFRS | 17,244 | 349 | 12,128 | (2,418) | 27,303 | 10,687 | 248 | 10,997 | (2,106) | 19,826 |
| Government grants | 4,661 | 5 | 393 | - | 5,059 | 6,121 | 17 | 204 | - | 6,342 |
| Economic hedging | - | - | - | - | - | 2,307 | 32 | (280) | 216 | 2,275 |
| Miscellaneous revenue | 320 | (127) | 66 | (124) | 135 | (12) | (24) | (329) | 116 | (249) |
| Total revenue, IFRS | 22,225 | 227 | 12,587 | (2,542) | 32,497 | 19,103 | 273 | 10,592 | (1,774) | 28,194 |
| Adjustments | (1,764) | 24 | 812 | (265) | (1,193) | |||||
| Total revenue, business performance | 17,339 | 297 | 11,404 | (2,039) | 27,001 | |||||
| Timing of revenue recognition from customers, IFRS | ||||||||||
| At a point in time | 13,123 | 349 | 4,160 | (2,418) | 15,214 | 5,576 | 248 | 1,635 | (2,106) | 5,353 |
| Over time | 4,121 | - | 7,968 | - | 12,089 | 5,111 | - | 9,362 | - | 14,473 |
| Total revenue from customers, IFRS | 17,244 | 349 | 12,128 | (2,418) | 27,303 | 10,687 | 248 | 10,997 | (2,106) | 19,826 |
Revenue increased by 15 % relative to H1 2020 and was DKK 32,497 million in H1 2021. The increase was mainly due to the divestment of the offshore transmission asset at Hornsea 1 in H1 2021 and higher gas and power prices across all markets. This was partly offset by lower wind speeds in H1 2021, the divestments of the LNG business, the Danish distribution, residential customer, and city light businesses in 2020, and the divestment of the offshore transmission asset for Walney Extension in H1 2020.
On 1 January 2021, we implemented hedge accounting on our commodity and related currency hedges. Accordingly, our hedges are presented in the same line item as the hedged exposure. For example, when we hedge generation of power, any gain (loss) related to the hedges is presented in the line item 'Generation of power'.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
4. Revenue (continued)
| Revenue, DKKm | Offshore | Onshore | Bioenergy & Other | Other activities/ eliminations | Q2 2021 total | Offshore | Onshore | Bioenergy & Other | Other activities/ eliminations | Q2 2020 total |
|---|---|---|---|---|---|---|---|---|---|---|
| Sale of gas | 2,456 | 97 | 2,553 | - | - | 1,245 | (2) | 1,243 | ||
| Generation of power | 1,207 | 104 | 1,172 | - | 2,483 | 687 | 123 | 323 | - | 1,133 |
| Sale of power | 5,186 | - | 1,104 | (1,049) | 5,241 | 3,146 | - | 1,365 | (1,848) | 2,663 |
| Revenue from construction of offshore wind farms | 34 | - | - | - | 34 | 2,486 | - | - | - | 2,486 |
| Generation and sale of heat and steam | - | - | 416 | - | 416 | - | - | 454 | - | 454 |
| Distribution and transmission | - | - | 76 | - | 76 | - | - | 468 | (1) | 467 |
| Other revenue | 623 | - | 74 | (16) | 681 | 511 | 13 | 164 | (31) | 657 |
| Total revenue from customers, IFRS | 7,050 | 104 | 5,298 | (968) | 11,484 | 6,830 | 136 | 4,019 | (1,882) | 9,103 |
| Government grants | 1,663 | 3 | 166 | - | 1,832 | 2,296 | 6 | 40 | - | 2,342 |
| Economic hedging | - | - | - | - | - | (636) | 8 | (329) | 489 | (468) |
| Miscellaneous revenue | 227 | - | 103 | (93) | 237 | (19) | (16) | (1,068) | 88 | (1,015) |
| Total revenue, IFRS | 8,940 | 107 | 5,567 | (1,061) | 13,553 | 8,471 | 134 | 2,662 | (1,305) | 9,962 |
| Adjustments | 893 | 26 | 1,233 | (489) | 1,663 | |||||
| Total revenue, business performance | 9,364 | 160 | 3,895 | (1,794) | 11,625 | |||||
| Timing of revenue recognition from customers, IFRS | ||||||||||
| At a point in time | 3,334 | 104 | 2,093 | (968) | 4,563 | 2,696 | 136 | (529) | (1,882) | 421 |
| Over time | 3,716 | - | 3,205 | - | 6,921 | 4,134 | - | 4,548 | - | 8,682 |
| Total revenue from customers, IFRS | 7,050 | 104 | 5,298 | (968) | 11,484 | 6,830 | 136 | 4,019 | (1,882) | 9,103 |
Örsted Interim financial report First half year 2021
Consolidated financial statements
5. Other operating income and expenses
| Other operating income, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
|---|---|---|---|---|
| Gain on divestment of assets | 5,754 | 1,332 | 5,499 | 99 |
| Other compensation | 229 | 127 | 66 | 10 |
| US tax credits and tax equity income | 595 | 477 | 312 | 269 |
| Miscellaneous operating income | 152 | 165 | 30 | 136 |
| Total other operating income | 6,730 | 2,101 | 5,907 | 514 |
| Other operating expenses, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
| --- | --- | --- | --- | --- |
| Loss on divestment of assets | 76 | 44 | 41 | 28 |
| Miscellaneous operating expenses | 76 | 103 | 50 | 46 |
| Total other operating expenses | 152 | 147 | 91 | 74 |
Gain on divestment of assets in H1 2021 primarily relates to the 50 % farm-down of Borssele 1 & 2 in May, resulting in a gain from new partnerships of DKK 5.4 billion. Remaining gains in H1 2021 were related to earnings from finalised construction projects.
In H1 2020, gain on divestment of assets was mainly related to the Hornsea 1 offshore transmission asset where we lowered our assumption regarding the preferred bidder's expected return requirement.
Other compensation is primarily compensations regarding outages and curtailments from TenneT, the German grid operator.
US tax credits and tax equity income originate from our US onshore wind farms in operation and correspond to the tax credits and other tax attributes provided to Ørsted and our tax equity partners for generated power. The increase was mainly due to commissioning of new onshore wind farms in 2020 which have had full impact in H1 2021.
6. Financial income and expenses
| Net financial income and expenses, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
|---|---|---|---|---|
| Interest expenses, net | (409) | (886) | (139) | (508) |
| Interest expenses, leasing | (101) | (97) | (51) | (53) |
| Interest element of provisions, etc. | (201) | (221) | (101) | (108) |
| Tax equity partner's contractual return | (309) | (209) | (161) | (118) |
| Capital losses on early repayment of loans and interest rate swaps | - | (369) | - | (369) |
| Value adjustments of derivatives, net | 117 | (72) | 26 | (30) |
| Exchange rate adjustments, net | 290 | 195 | 59 | (3) |
| Value adjustments of securities, net | (378) | (131) | (115) | 191 |
| Other financial income and expenses | 106 | 4 | 16 | (12) |
| Net financial income and expenses | (885) | (1,786) | (466) | (1,010) |
The table shows net financial income and expenses corresponding to our internal control.
Exchange rate adjustments and hedging contracts entered into to hedge currency risks are presented net under the item 'Exchange rate adjustments, net'.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
7. Acquisition of enterprises
| Cash flows used for acquisitions, DKKm | BRI | Other | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
|---|---|---|---|---|---|---|
| Fair value at time of acquisition: | ||||||
| Other intangible assets than goodwill | 452 | - | 452 | - | 452 | - |
| Property, plant, and equipment | 5,182 | - | 5,182 | - | 5,182 | - |
| Joint ventures | 33 | - | 33 | - | 33 | - |
| Trade receivables | 236 | - | 236 | - | 236 | - |
| Other receivables | 163 | - | 163 | - | 163 | - |
| Cash | 146 | - | 146 | - | 146 | - |
| Interest-bearing debt | (2,273) | - | (2,273) | - | (2,273) | - |
| Provisions | (47) | - | (47) | - | (47) | - |
| Derivatives | (456) | - | (456) | - | (456) | - |
| Deferred tax | (634) | - | (634) | - | (634) | - |
| Other liabilities | (312) | - | (312) | - | (312) | - |
| Net assets acquired | 2,490 | - | 2,490 | - | 2,490 | - |
| Goodwill | - | - | - | - | - | - |
| Purchase price | 2,490 | - | 2,490 | - | 2,490 | - |
| Cash, available and acquired | (142) | - | (142) | - | (142) | - |
| Contingent consideration | - | 11 | 11 | (1) | - | 3 |
| Cash flow used for acquisition of enterprises | 2,348 | 11 | 2,359 | (1) | 2,348 | 3 |
| Purchase price | 2,490 | - | 2,490 | - | 2,490 | - |
| Adjustments for cash | (146) | - | (146) | - | (146) | - |
| Adjustments for interest-bearing debt | 2,273 | - | 2,273 | - | 2,273 | - |
| Enterprise value | 4,617 | - | 4,617 | - | 4,617 | - |
On 9 June 2021, we acquired all of the membership interests in Brookfield Renewable Ireland (BRI), Brookfield Renewable's onshore wind business in Ireland and UK, at an enterprise value of DKK 4,617 million. With the acquisition of BRI, Ørsted enters the European onshore market. BRI's management team continue to run the business, which will be incorporated into our Onshore business unit over time.
Since the acquisition date, BRI has contributed with a revenue of DKK 25 million and a loss after tax of DKK 54 million. If the acquisition had been made on 1 January 2021, the half-year revenue would have been DKK 438 million, and loss after tax would have been DKK 75 million.
As part of the acquisition process, we have incurred costs of DKK 49 million which have
been expensed in our income statement in the Onshore segment.
The fair values of the assets and liabilities acquired are not considered final until 12 months after acquisition date.
We made no acquisitions in H1 2020.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
8. Gross and net investments
| Gross and net investments, DKKm | H1 2021 | H1 2020 | Q2 2021 | Q2 2020 |
|---|---|---|---|---|
| Cash flow from investing activities | (11,863) | (4,890) | (110) | (2,925) |
| Dividends received and capital reductions reversed | (28) | - | (28) | - |
| Purchase and sale of securities, reversed | 5,419 | (4,117) | 362 | (780) |
| Sale of non-current assets, reversed | (10,057) | (58) | (10,088) | (52) |
| Interest-bearing debt in acquired enterprises | (2,273) | - | (2,273) | - |
| Restricted cash in acquired enterprises | 4 | - | 4 | - |
| Gross investments | (18,798) | (9,065) | (12,133) | (3,757) |
| Transactions with non-controlling interests in connection with divestments | 503 | (6) | 503 | (7) |
| Sale of non-current assets | 10,057 | 58 | 10,088 | 52 |
| Divestments | 10,560 | 52 | 10,591 | 45 |
| Net investments | (8,238) | (9,013) | (1,542) | (3,712) |
+
Amazon Wind, Scurry County, Texas US.
9. Reserves
| Reserves 2021, DKKm | Foreign currency translation reserve | Hedging reserve | Total reserves |
|---|---|---|---|
| Reserves at 1 January 2021 | (3,829) | 1,873 | (1,956) |
| Exchange rate adjustments | 3,246 | - | 3,246 |
| Value adjustments of hedging reserve | - | (14,736) | (14,736) |
| Value adjustments transferred to: | |||
| Revenue | - | 2,364 | 2,364 |
| Financial income and expenses | - | 19 | 19 |
| Property, plant, and equipment | - | (48) | (48) |
| Tax: | |||
| Tax on hedging and currency adjustments | (519) | 2,281 | 1,762 |
| Movement in comprehensive income for the period | 2,727 | (10,120) | (7,393) |
| Total reserves at 30 June | (1,102) | (8,247) | (9,349) |
+
'Value adjustments of hedging reserve' in H1 2021 are mainly due to losses on power hedges due to the increase in power prices and to a lesser extent losses on currency and inflation hedges.
| Reserves 2020, DKKm | Foreign currency translation reserve | Hedging reserve | Total reserves |
|---|---|---|---|
| Reserves at 1 January 2020 | 168 | 245 | 413 |
| Exchange rate adjustments | (4,115) | - | (4,115) |
| Value adjustments of hedging reserve | - | 1,030 | 1,030 |
| Value adjustments transferred to: | |||
| Revenue | - | 53 | 53 |
| Financial income and expenses | - | 461 | 461 |
| Tax: | |||
| Tax on hedging and currency adjustments | 940 | (367) | 573 |
| Movement in comprehensive income for the period | (3,175) | 1,177 | (1,998) |
| Total reserves at 30 June | (3,007) | 1,422 | (1,585) |
Örsted Interim financial report First half year 2021
Consolidated financial statements
10. Tax on profit (loss) for the period
| Tax for the period, DKK | H1 2021 | H1 2020 | ||||
|---|---|---|---|---|---|---|
| Profit (loss) before tax | Tax | Tax in % | Profit (loss) before tax | Tax | Tax in % | |
| Deferred tax liability, new tax equity contributions | (788) | n.a. | (885) | n.a. | ||
| Gain (loss) on divestment of enterprises | 5,355 | - | 0 % | - | - | n.a. |
| Other adjustments | 319 | n.a. | (23) | n.a. | ||
| Remaining Ørsted business activities | 2,890 | (634) | 22 % | 5,663 | (1,218) | 22 % |
| Effective tax for the period | 8,245 | (1,103) | 13 % | 5,663 | (2,126) | 38 % |
Tax on profit (loss) for the period
Tax on profit (loss) was DKK 1,103 million in H1 2021 compared to DKK 2,126 million in H1 2020. The effective tax rate for the first half year of 2021 was 13 %.
The effective tax rate was affected by the farm-down of Borssele and recognition of deferred tax liabilities in the US related to tax equity partnerships for offshore wind farms in our north-east cluster, for Ocean Wind, and for Permian Energy Center. The deferred tax liabilities will increase until COD.
Also, the effective tax rate was affected by an updated management assessment on uncertain tax positions, the enacted increase of the UK tax rate from 19 % to 25 %, and the winter storm in Texas in February 2021 as we incurred hedge income in entities with no tax equity partnership agreements in place.
Tax controversies
On 28 April 2021, Ørsted received a draft administrative decision from the Danish Tax Agency in relation to the development of the offshore wind farm Race Bank. In line with its administrative decision from 1 December 2020 regarding the Walney Extension and Hornsea 1 offshore wind farms, the Danish Tax Agency claims that Ørsted Wind Power A/S has not acted at arm's length terms when charging fees for technical development services provided to the Race Bank project company. If the draft decision is finalised, it entails an additional Danish tax payment of DKK 2.5 billion plus interest for the income year 2015. As part of the process, Ørsted is given time and the opportunity to make submissions before the Danish Tax Agency makes a final decision in the matter.
In response to the tax risks connected to cross-border activities, including the current controversy regarding the pricing of technical development service fees, we have made tax-related provisions in accordance with IAS 12 and IAS 37 as well as relevant interpretation, such as IFRIC 23. The provisions have been calculated on the basis of differences in tax rates and statistical risks of suffering economic or legal double taxation.
Accounting policies
Effective tax rate
The estimated average annual tax rate is separated based on regions and into two different categories: a) ordinary business activities and b) gain (loss) on divestments and impacts from tax equity contributions.
Effective tax rate
The estimated average annual tax rate for the 'Remaining Ørsted business activities' is 21 % compared to 22 % for the full-year of 2020.
'Other adjustments' include changes in tax rates, movements in uncertain tax positions, tax concerning previous years, and other non-taxable income and non-deductible costs.
The effective tax is calculated on the basis of the profit (loss) before tax from continuing operations.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
11. Market risks
Currency exposure 1 July 2021 - 30 June 2026, DKKbn
For USD and NTD, we manage our risk to a natural time spread between front-end capital expenditures and long-term revenue. In the five-year horizon, we are therefore seeing that our hedges increase our net exposure to USD, but in the longer horizon, our hedges reduce the USD risk.
We do not deem EUR to constitute a risk, as we expect Denmark to maintain its fixed exchange-rate policy.
Energy exposure 1 July 2021 - 30 June 2026, DKKbn
Our power exposure before hedges have increased approx. 30% in Q2 2021, mainly due to the increase in power prices.
Expected value for recognition in EBITDA, DKKbn
The table shows the time of the transfer of the market value of hedging contracts to EBITDA.
Market risk management
Our most significant market risks relate to:
- energy prices
- foreign exchange rates
- interest and inflation.
We manage market risks to protect Ørsted against market price volatility and to ensure stable and robust financial ratios that support our growth strategy as well as protect the
value of our assets. In the short- to medium-term horizon, we primarily hedge future prices using derivatives to reduce cash flow fluctuations after tax. Minimum hedging levels are determined by the Board of Directors. In the first two years, we are almost fully hedged. The degree of hedging declines in subsequent years. For more details on our market risks please see note 7.1 'Market risks' in the annual report for 2020.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
12. Fair value measurement
| Fair value hierarchy
DKKm | Assets | | | Liabilities |
| --- | --- | --- | --- | --- |
| | Inventories | Securities | Derivatives | Derivatives |
| 2021 | | | | |
| Quoted prices | 340 | - | 4,016 | 5,268 |
| Observable input | - | 30,401 | 7,587 | 16,551 |
| Non-observable input | - | - | 191 | 1,441 |
| Total 30 June 2021 | 340 | 30,401 | 11,794 | 23,260 |
| 2020 | | | | |
| Quoted prices | 285 | - | 8 | 30 |
| Observable input | - | 12,327 | 7,476 | 5,298 |
| Non-observable input | - | - | 357 | 59 |
| Total 30 June 2020 | 285 | 12,327 | 7,841 | 5,387 |
| Derivatives valued on the basis of non-observable input, DKKm | 2021 | 2020 |
| --- | --- | --- |
| Market value at 1 January | (82) | 236 |
| Value adjustments through profit or loss | (326) | 240 |
| Value adjustments through other comprehensive income | (623) | - |
| Sales/redemptions | 18 | (205) |
| Purchases/issues | (229) | 27 |
| Transferred to observable input | (8) | - |
| Market value at 30 June | (1,250) | 298 |
| Non-observable input per commodity price input, DKKm | 2021 | 2020 |
| --- | --- | --- |
| German power prices | (820) | - |
| Other power prices | (341) | 63 |
| Gas prices | (89) | 235 |
| Total | (1,250) | 298 |
The table shows the movements during the year in the total market value (assets and liabilities) of derivatives valued on the basis of non-observable inputs.
The main non-observable input is German power prices in the period 2025-2034. The average power price for the period is estimated at EUR 62.14 per MWh, based on an inflation-adjusted extrapolation of the observable price. An increase or decrease in the German power prices of 10% would impact the fair value by +/- DKK 455 million.
Valuation principles and key assumptions
In order to minimise the use of subjective estimates or modifications of parameters and calculation models, it is our policy to determine fair values based on the external information that most accurately reflects the market values. We use pricing and benchmark services to increase data quality.
Market values are determined by the Risk Management function which reports to the CFO. The market value developments are monitored on a continuous basis and reported to the Executive Committee.
'Quoted prices' comprise gas and derivatives that are traded in active markets. Where derivatives are traded in an active market, we generally have daily settlements, which is why the market value is zero.
'Observable input' comprises securities and derivatives, for which valuation models with observable inputs are used to measure fair value. The majority of our securities are quoted Danish mortgage or government bonds. Since these are not always traded on a daily basis, we are valuing these based on market interest rates for similar bonds. 'Non-observable input' primarily comprises long-term contracts on the purchase or sale of power and gas. The fair values are based on assumptions, including the long-term prices of power and gas as well as risk premiums in respect of liquidity and market risks. Since there are no active markets for long-term prices, the fair value has been determined through an estimate of future prices.
Normally, the energy price can be observed for a maximum of five years in the power market, after which an active market no longer exists. Beyond the five-year horizon, the energy price is thus projected on the basis of the observable forward prices for years one to five.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
13. Interest-bearing debt and FFO
| Interest-bearing debt and interest-bearing assets DKKm | 30 June 2021 | 31 December 2020 | 30 June 2020 |
|---|---|---|---|
| Interest-bearing debt: | |||
| Bank debt | 8,554 | 1,942 | 3,520 |
| Bond debt | 35,895 | 34,824 | 31,507 |
| Total bond and bank debt | 44,449 | 36,766 | 35,027 |
| Tax equity liability | 836 | 721 | 638 |
| Lease liability | 5,538 | 5,054 | 5,097 |
| Other interest-bearing debt | 940 | 1,906 | 1,690 |
| Total interest-bearing debt | 51,763 | 44,447 | 42,452 |
| Interest-bearing assets: | |||
| Securities | 30,401 | 25,173 | 12,327 |
| Cash | 7,724 | 6,178 | 6,754 |
| Other receivables | 829 | 11 | 1,099 |
| Receivables in connection with divestments | 742 | 742 | - |
| Total interest-bearing assets | 39,696 | 32,104 | 20,180 |
| Total interest-bearing net debt | 12,067 | 12,343 | 22,272 |
Interest-bearing net debt totalled DKK 12,067 million at 30 June 2021, which was a decrease of DKK 276 million relative to 31 December 2020. The main changes in the composition of our net debt compared to 31 December 2020 was an increase in bank debt of DKK 6,612 million which was partly countered by an increase in securities of DKK 5,228 million. The increase in bank debt is mainly related to an increase in short-term repo loans.
Adjusted definition of FFO and adjusted interest-bearing net debt (NIBD)
We have adjusted our definition of FFO and adjusted NIBD to better align with the rating agencies.
Generally, we are now adjusting FFO for the cash flow effects instead of the profit and loss effects. Further, adjusted NIBD no longer includes the decommissioning obligation.
Market value of bond and bank debt
The market values of bond and bank debts were DKK 41.5 billion and DKK 8.5 billion, respectively, at 30 June 2021.
| Funds from operations (FFO) LTH1DKKm | 30 June 2021 | 31 December 2020 | 30 June 2020 |
|---|---|---|---|
| EBITDA2 | 21,423 | 18,124 | 18,489 |
| Change in provisions and other adjustments | 606 | (403) | (1,003) |
| Reversal of gain (loss) on divestment of assets | (5,196) | (805) | (878) |
| Income tax paid | (952) | (1,118) | (1,296) |
| Interest and similar items, received/paid | (1,301) | (1,829) | (1,439) |
| Reversal of interest expenses transferred to assets | (545) | (449) | (377) |
| 50 % of coupon payments on hybrid capital | (215) | (245) | (278) |
| Dividends received and capital reductions | 46 | 18 | 15 |
| Funds from operations (FFO) | 13,866 | 13,293 | 13,233 |
1 Last 12 months.
2 EBITDA according to business performance up until the end of 2020.
| Adjusted interest-bearing net debt DKKm | 30 June 2021 | 31 December 2020 | 30 June 2020 |
|---|---|---|---|
| Total interest-bearing net debt | 12,067 | 12,343 | 22,272 |
| 50 % of hybrid capital | 8,992 | 6,616 | 6,616 |
| Cash and securities not available for distribution, excluding repo loans | 977 | 1,485 | 1,628 |
| Total adjusted interest-bearing net debt | 22,036 | 20,444 | 30,516 |
| Funds from operations (FFO)/adjusted interest-bearing net debt | 30 June 2021 | 31 December 2020 | 30 June 2020 |
| --- | --- | --- | --- |
| Funds from operations (FFO)/adjusted interest-bearing net debt | 62.9% | 65.0% | 43.4% |
Comparative figures are restated in accordance with the new definition of FFO and adjusted interest-bearing net debt (NIBD).
The table shows which items are included in the adjusted interest-bearing debt.
We have adjusted our target FFO/adjusted NIBD from above 30% to above 25% to be in line with the rating agencies.
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Örsted Interim financial report First half year 2021
Consolidated financial statements
Statement by the Executive Board and the Board of Directors
The Board of Directors and the Executive Board have today considered and approved the interim financial report of Ørsted A/S for the period 1 January - 30 June 2021.
The interim financial report, which has not been audited or reviewed by the company's independent auditors, has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU and additional requirements in the Danish Financial Statements Act. The accounting policies remain unchanged from the annual report for 2020.
In our opinion, the interim financial report gives a true and fair view of the Group's assets, liabilities, and financial position at 30 June 2021 and of the results of the Group's operations and cash flows for the period 1 January - 30 June 2021.
Furthermore, in our opinion, the management's review gives a fair presentation of the development in the Group's operations and financial circumstances, of the results for the period, and of the overall financial position of the Group as well as a description of the most significant risks and elements of uncertainty facing the Group.
Over and above the disclosures in the interim financial report, no changes in the Group's most significant risks and uncertainties have occurred relative to the disclosures in the annual report for 2020.
Skærbæk, 12 August 2021
Executive Board:
Mads Nipper
Group President and CEO
Marianne Wiinholt
CFO
Martin Neubert
CCO and Deputy Group CEO
Board of Directors:
Thomas Thune Andersen
Chairman
Lene Skole
Deputy Chairman
Lyn da Armstrong
Jørgen Kildahl
Julia Elizabeth King
Peter Korsholm
Henrik Poulsen
Dieter Wemmer
Benny Gøbel*
Ole Henriksen*
Daniel Tas Sandermann*
*Employee representative
Örsted Interim financial report First half year 2021
Consolidated financial statements
Forward-looking statements
This report contains certain forward-looking statements, including, but not limited to, the statements and expectations contained in the 'Outlook' section of this report (p. 8).
Statements herein, other than statements of historical facts, regarding our future results related to operations, financial condition, cash flows, business strategy, plans, and future objectives are forward-looking statements.
Words such as 'target', 'believe', 'expect', 'aim', 'intend', 'plan', 'seek', 'will', 'may', 'should' 'anticipate', 'continue', 'predict', or variations of these words as well as other statements regarding matters that are not historical facts or that regards future events or prospects constitute forward-looking statements.
We have based these forward-looking statements on our current views with respect to future events and financial performance. These views involve a number of risks and uncertainties which could cause actual results to differ materially from those predicted in the forward-looking statements and from our past performance.
Although we believe that the estimates and projections reflected in the forward-looking
statements are reasonable, they may prove materially incorrect, and actual results may materially differ due to a variety of factors. These factors include, but are not limited to, market risks, development and construction of assets, changes in temperature, wind conditions, wake and blockage effects, precipitation levels, the development in power, coal, carbon, gas, oil, currency, and interest rate markets, changes in legislation, regulations, or standards, the renegotiation of contracts, changes in the competitive environment in our markets, security of supply, cable break-downs, or other disruptions.
Read more about the risks in note 7 'Risk management' in this report, in the annual report for 2020, and in the section 'Risk and risk management' in the Management's review in the annual report for 2020 available at http://www.orsted.com.
Unless required by law, we are under no duty and undertake no obligation to update or revise any forward-looking statements after the distribution of this report, whether as a result of new information, future events, or otherwise.
Installation of turbines at Hornsea 2, UK.
Ørsted A/S
CVR no. 36213728
Kraftværksvej 53
DK-7000 Fredericia
Tel.: +45 9955 1111
orsted.com
Group Communication
Martin Barlebo
Tel.: +45 9955 9552
Investor Relations
Allan Bødskov Andersen
Tel.: +45 9955 7996
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Liverpool Bay, UK
Publication
12 August 2021
Ørsted
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