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UPDATE 2-Denmark's Orsted lifts 2017 outlook after deal windfall
November 1, 2017 / 3:21 PM / in a month

UPDATE 2-Denmark's Orsted lifts 2017 outlook after deal windfall

* Orsted agrees sale of stake in Irish Sea wind farm

* Deal to boost 2017 earnings

* Investor appetite for offshore wind never bigger -CFO (Adds CFO, analyst, updates share price)

COPENHAGEN, Nov 1 (Reuters) - Danish energy group Orsted lifted its 2017 profit outlook after agreeing to sell a stake in what will be the world’s biggest offshore wind farm for around 2 billion pounds ($2.65 billion).

Orsted, previously known as DONG Energy and the world’s largest owner of offshore wind power sites, has a strategy of selling off large stakes in wind farms to invest the capital in new projects.

On Wednesday, it agreed to divest a 50 percent stake in the Walney Extension project off the coast of northern England in the Irish Sea to two leading Danish pension funds.

“We see a very very healthy appetite for these projects that we farm down, it’s the biggest appetite we have ever seen,” said Chief Financial Officer Marianne Wiinholt.

Walney Extension will have capacity to power more than 500,000 homes for 25 years and will consist of 40 turbines from MHI Vestas, a Vestas and Mitsubishi Heavy Industries joint venture, and 47 Siemens Gamesa turbines.

Orsted is rebranding itself as a renewable energy specialist after it sold its oil and gas business this year, courting investors interested in green investments which have seen a boost thanks to policies to protect the environment.

The price tag demonstrated how attractive offshore wind assets have become for investors, said Sydbank analyst Morten Imsgard, who has a ‘sell’ rating on the stock.

“My impression is that it is very easy for Orsted to bring financial investors to the table and sell their assets,” he said.

As a result of the divestment, Orsted now expects 2017 earnings before interest, taxation, depreciation and amortization (EBITDA) of between 19 billion and 21 billion Danish crowns from a previous range of 17-19 billion.

Orsted said third-quarter EBITDA of 1.76 billion crowns ($275 million) came in well below analyst expectations due to a delay in completing the sale of the Borkum Riffgrund 2 project because a supplier had to go through restructuring.

Some analysts had expected the proceeds to appear in the third-quarter results.

Orsted had been scheduled to report third-quarter earnings on Thursday but released the numbers a day early because the Walney Extension deal was ready to be announced.

Shares in the company, whose listing in Copenhagen was one of the biggest in 2016 globally, gained 0.7 percent. They are up around 45 percent since joining the stock exchange in June 2016.

The company’s new name references Danish scientist Hans Christian Orsted. DONG stood for Danish Oil and Natural Gas. ($1 = 6.3958 Danish crowns) (Reporting by Stine Jacobsen; Editing by Jacob Gronholt-Pedersen and Keith Weir)

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