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Earnings

Orsted beats second-quarter expectations despite lower power demand

FILE PHOTO: General view of the Walney Extension offshore wind farm operated by Orsted off the coast of Blackpool, Britain September 5, 2018. REUTERS/Phil Noble

(Reuters) - Denmark's Orsted ORSTED.CO on Wednesday beat second-quarter operating profit expectations but said lockdown measures had hurt demand for its electricity.

The world’s largest operator of offshore wind farms said operations had remained stable during the coronavirus crisis and kept its full-year guidance unchanged.

“We have, however, seen negative COVID-19 related effects on European power markets, especially in the UK, driven by lower demand for electricity,” CEO Henrik Poulsen said in a statement.

Orsted posted earnings before interest, tax, depreciation and amortisation (EBITDA) of 2.96 billion Danish crowns ($466 million), down 18% from a year earlier but above the 2.88 billion expected by analysts in a poll gathered by Orsted.

Lower demand hit earnings by around 150 million crowns, Poulsen said.

The company said it still expects to post a 2020 EBITDA of 16-17 billion crowns, but lowered its gross investments for the year by 2 billion crowns to 28-30 billion due to changed timing of payments, without specifying which payments.

Orsted has constructed around a fourth of the world’s offshore wind capacity.

The company is close to completing a transition to renewable energy from fossil fuels under a plan laid out in 2017.

Reporting by Tim Barsoe; editing by Jacob Gronholt-Pedersen and Jason Neely

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