Salg & Service
Annual report 2022
Adopted at the Annual General Meeting
on 26 June 2023
Chairman of the meeting
For the period 1/1 2022 to 31/12 2022
Ørsted Salg & Service A/S, Skærbæk
Company information � � � � � � � � � � � � � � � � � � � � � � � � � � 4
Performance highlights� � � � � � � � � � � � � � � � � � � � � � � � � � 5
Statement by the Executive Board and the
Board of Directors � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 6
Independent auditor’s report � � � � � � � � � � � � � � � � � � � � � 7
Management’s review � � � � � � � � � � � � � � � � � � � � � � � � � � 9
Financial statements
Statement of comprehensive income � � � � � � � � � � � � � � � 14
Balance sheet � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 15
Statement of shareholder’s equity � � � � � � � � � � � � � � � � � 16
Statement of cash flows � � � � � � � � � � � � � � � � � � � � � � � � 17
Contents
Index of notes
NotesOverview
1 Basis of reporting � � � � � � � � � � � � � � � � � � � � � � � � � 19
2 Revenue � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 21
3 Cost of sales � � � � � � � � � � � � � � � � � � � � � � � � � � � � 22
4 Other external expenses � � � � � � � � � � � � � � � � � � � � 22
5 Employee costs � � � � � � � � � � � � � � � � � � � � � � � � � � 23
6 Share-based payment � � � � � � � � � � � � � � � � � � � � � � 23
7 Other operating expenses � � � � � � � � � � � � � � � � � � � 24
8 Auditor’s fees � � � � � � � � � � � � � � � � � � � � � � � � � � � � 24
9 Financial income� � � � � � � � � � � � � � � � � � � � � � � � � � 24
10 Financial expenses � � � � � � � � � � � � � � � � � � � � � � � � 24
11 Tax on profit (loss) for the year � � � � � � � � � � � � � � � � 25
12 Discontinued operations � � � � � � � � � � � � � � � � � � � � 26
13 Intangible assets � � � � � � � � � � � � � � � � � � � � � � � � � 27
14 Property, plant, and equipment � � � � � � � � � � � � � � � 29
15 Investments in subsidiaries � � � � � � � � � � � � � � � � � � � 31
16 Inventories � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 32
17 Deferred tax � � � � � � � � � � � � � � � � � � � � � � � � � � � � 32
18 Derivatives � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 34
19 Maturity analysis of financial liabilities � � � � � � � � � � 39
20 Trade receivables � � � � � � � � � � � � � � � � � � � � � � � � � 40
21 Other receivables and other payables � � � � � � � � � � � 41
22 Income tax receivable, and payable � � � � � � � � � � � � 42
23 Cash, cash equivalents, and securities � � � � � � � � � � � 42
24 Equity � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 43
25 Provisions � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 44
26 Contract liabilities� � � � � � � � � � � � � � � � � � � � � � � � � 45
27 Change in working capital � � � � � � � � � � � � � � � � � � � 45
28 Financial risks and risk management � � � � � � � � � � � � 46
29 Contingent liabilities and other liabilities � � � � � � � � � 49
30 Related-party transactions � � � � � � � � � � � � � � � � � � 50
31 Calculation of financial ratios � � � � � � � � � � � � � � � � � 51
2
Overview
Ørsted Salg & Service Annual report
2022
Company information
Company Ørsted Salg & Service A/S
Kraftværksvej 53
Skærbæk
7000 Fredericia
Denmark
Telephone: +45 99 55 11 11
Email: orsted@orsted�dk
Company registration number: 27210538
Shareholder The entire share capital is held by Ørsted A/S
Board of Directors Daniel Lerup (Chairman)
Anja Forup (Deputy Chairman)
Heidi Lohse
Executive Board Rune Sonne Bundgaard-Jørgensen
Auditor PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab
Consolidated financial
statements
The company is reflected in the group report as the parent company
Ørsted A/S, Fredericia, CVR no� 36 21 37 28
The group report of Ørsted A/S, Fredericia, CVR no� 36 21 37 28 can be
obtained at the following address:
www�orsted�com/en/investors/ir-material/financial-reports-and-presentations
Annual general meeting 26 June 2023
4
Overview
Ørsted Salg & Service Annual report
2022
Company information
Performance highlights
Financial ratios have been calculated in accord-
ance with ‘Recommendations & Ratios’ published
by the Danish Society of Financial Analysts� For
definitions, see the accounting policies section�
DKKm 2022 2021 2020 2019 2018
Statement of comprehensive income
Revenue 93,611 45,785 20,519 31,201 38,840
Operating profit (loss) before depreciation and amortisation (EBITDA) 516 79 (169) 2,004 527
Operating profit (loss) (EBIT) 419 (893) (280) 1,618 446
Net financial income and expenses (326) 146 (152) (81) (96)
Profit (loss) before tax 96 (748) (432) 1,536 342
Profit (loss) for the year 67 (267) (638) 694 (134)
Balance sheet
Equity 19,212 5,903 9,348 10,067 9,380
Assets 88,296 69,215 21,007 26,345 27,953
Cash flows
Operating activities (7,067) (10,682) 2,324 (359) 1,643
Investments in property, plant, and equipment - - - (9) (5)
Other investing activities (1) (45) (3) - (396)
Financing activities 8,120 11,474 (79) (78) -
Financial ratios
EBITDA margin 1 % 0 % (1 %) 6 % 1 %
EBIT margin (profit margin) 0 % (2 %) (1 %) 5 % 1 %
Net interest-bearing debt (4,513) 3,428 (7,955) (7,546) (8,611)
Capital employed (14,537) 9,455 2,137 3,623 821
Average number of employees 269 256 267 295 109
5
Overview
Ørsted Salg & Service Annual report
2022
Performance highlights
Statement by the Executive Board and the Board of Directors
Executive Board:
Board of Directors:
6
Overview
Ørsted Salg & Service Annual report
2022
Statement by the Executive Board and the Board of Directors
Independent auditor’s report
Basis for Opinion
Statement on Management’s Review
Management’s Responsibilities for the
Financial Statements
Auditor’s Responsibilities for the Audit of the
Financial Statements
7
Overview
Ørsted Salg & Service Annual report
2022
Independent auditor’s report
CVR No 3 3 7 7 123 1
8
Overview
Ørsted Salg & Service Annual report
2022
Independent auditor’s report
Management’s review
Performance highlights 2022 2021 %
Business drivers
Gas sales (continued operations)
1
TWh 25�8 46�5 (45%)
Power sales (continued operations)
2
TWh 45�7 32�7 40%
Gas price, TTF EUR/MWh 120�5 45�7 164%
Power price, DK EUR/MWh 213�7 87�8 143%
Power price, LEBA UK GBP/MWh 252�0 147�5 71%
Financial results
Revenue DKKm 93,611 45,785 104%
EBITDA (continued operations) DKKm 516 79 553%
Offshore (2,573) (1,795) (43%)
Gas Markets & Infrastructure 3,070 1,894 62%
Other, incl� end-customers sales 19 (20) n�a
EBITDA (discontinued operations) DKKm (23) (40) 43%
Depreciation DKKm (97) (972) 84%
EBIT DKKm 419 (893) n�a
Cash flows from operating activities DKKm (7,067) (10,682) 34%
Gross investments DKKm (4) (907) (100%)
Divestments DKKm 65 9 622%
Cash flows from financing activities DKKm 8,120 11,474 (29%)
Free cash flow from continued operations DKKm 1,114 106 951%
Free cash flow from discontinued operations DKKm (18) (67) 73%
Capital employed DKKm 14,537 9,455 54%
1 Gas volumes from discontinued operations 6�2 TWh (2021: 15�8 TWh)�
2 Power volumes from discontinued operations 1�1 TWh (2021: 3�1 TWh)
Financial performance
Total revenue from continued operations
increased by 104 % compared to 2021 and
amounted to DKK 93.6 billion. The increase
was driven by a 164 % increase in the
average gas prices, partly offset by a 45 %
decrease in sold gas volumes, increasing
revenue from sale of gas with DKK 4.9 billion
(35 % increase). The decrease in sold gas vol-
umes was primarily due to ceased delivery
in Denmark from Gazprom Export and expire
of contracts in the UK. Revenue from sale of
power increased with DKK 37.7 billion (142%
increase) due to 71 % increase in average
UK power prices and 40 % increase in sold
power volumes. The increase in sold power
volumes was mainly due to volumes from
the Hornsea II windfarm commissioned in the
year and general higher off take of power
generation from Ørsted windfarms, including
investor power purchase agreements, due to
increased wind speeds compared to 2021.
EBITDA amounted to a gain of DKK 516
million compared to DKK 79 million in 2021.
To reflect end-to end value chain thinking
in Ørsted, earnings from trading related
to hedging of power exposures and power
portfolio optimization activities are
reported as Offshore earnings.
EBITDA from Offshore sales amounted to
a loss of DKK 2,573 compared to a loss of
DKK 1,795 in 2021. Earnings for the year was
negatively impacted with DKK 1.2 billion
due to ineffectiveness related to infla-
tion-based contracts and negative effects
from volume-related overhedging. Losses
from ineffectiveness is reported as Other
operating expenses. The continued market
conditions in 2022 with high power prices
and high volatility, impacted earnings nega-
tive through higher balancing and intermit-
tency costs.
EBITDA from Gas Markets & Infrastructure
contributed with earnings of DKK 3,070
million in 2022, a DKK 1,176 million increase
relative to last year. The positive effect was
mainly driven by optimising our north-west-
ern European gas activities, where we were
able to lock in gains from the offtake flexibil-
ity in some of our sourcing contracts and at
gas storages. In contrast, our decision during
the spring to unwind gas hedges related to
the Gazprom Export contract to balance our
risk, if gas supplies from Russia were ceased,
led to a net loss on the Gazprom Export
sourcing contract in the first half of the year.
EBITDA from Other business activities
amounted to DKK 19 million, an increase
of 39 million, which was primarily due to
reduced operating costs.
Cash flows from operating activities
amounted to DKK -7,067 million in 2022.
The negative cash flow was driven by the
continuously high and volatile gas and
power prices, leading to large margin
payments on unrealized financial instru-
ments, partly offset by repayment of cash
collateral replaced by a guarantee provided
by Ørsted A/S. Payment of income tax
amounted to DKK -2,540 million.
Cash flows related dividends from sub-
sidiaries amounted to DKK 65 million.
Cash flow from financing activities amounted
to DKK 8,120 million mainly due to trans-
actions with Ørsted internal bank and a
capital injection of DKK 15,000 million.
9
Overview
Ørsted Salg & Service Annual report
2022
Management’s review
Discontinued operations
Following the decision and closure of our
UK B2B business, the activity is presented as
discontinued operations. Reference is made
to note 12 ‘Discontinued operations’.
Earnings related to expected development
assumed in previous report
Financial performance for 2022 was slightly
below expectations primarily driven by the
negative impact from ineffective hedges in
our Offshore related power portfolio activi-
ties. It was only partly offset by higher than
expected earnings from trading activities
in our gas business. Consequently, realised
EBITDA ended lower than our expected
range for 2022 of 0.7-1.0 billion DKK.
Outlook 2023
For Ørsted Salg & Service A/S, a higher
EBITDA is expected for 2023. EBITDA is
expected to total DKK 1.5-1.8 billion in 2023.
– Negative impact from overhedging
and ineffective hedges in 2022 is not
expected to be repeated in 2023 and
lower balancing costs, partly offset by
lower expected trading results.
– In 2022, earnings in ‘Gas Markets &
Infrastructure’ saw a positive effect from
optimising our north-western European
gas activities, where we were able to
lock in gains from the offtake flexibility in
some of our sourcing contracts and at gas
storages. In 2023, we expect earnings to
be fairly limited, reflecting normal margins
on these activities, lower volumes, and
a negative timing impact related to our
Danish gas storage activities.
Events after the end of the financial year
No events have occurred after the end of the
financial year which would have influenced
on the evaluation of this annual report.
Strategic and operational performance 2022
The power portfolio and trading business
related to hedging of power generation
continued in 2022 to be challenged by high
balancing cost and intermittency costs.
In addition, the earnings in 2022 was driven
down by the negative impact from ineffec-
tive hedges related to inflation-based con-
tracts and negative effects from volume-
related overhedging.
Our gas business had again in 2022 a strong
financial performance, giving Ørsted Salg
& Service a strong diversification effect,
where the positive earnings in the gas busi-
ness offsetting the negative impacts from
the Offshore power activities.
To help secure the Danish gas supply for the
2022/2023 winter period, we took all possi-
ble measures to inject gas into Danish gas
storages under our capacity contracts dur-
ing the summer period. We also entered into
a gas agreement with Equinor under which
Equinor will supply 8 TWh of Norwegian gas
to Denmark via Baltic Pipe from 1 January
2023 until April 2024, covering the period
when the Tyra field is not supplying gas to
Denmark. The agreement strengthens the
security of supply in Denmark and will be
supplementing our purchase of biogas and
gas from the South Arne field. Together,
these offtake agreements will more than
cover the consumption of our Danish and
Swedish B2B customers.
Introduction to Ørsted Salg & Service
Route-to-market and trading
We serve as an efficient route-to-market for both Ørsted companies and
third parties, by providing balancing services for renewable generation
portfolios and by selling green certificates to the market� In doing so,
we manage large volumes of power contracts that we optimise by
leveraging the size of our combined portfolio and our origination and
trading capabilities�
We spearhead market risk management for Ørsteds generation assets
and contracts by trading power, green certificates and other commodities�
We mitigate risks and create value through time-to-market decisions, proxy
hedging and netting�
We ensure efficient operations and maximise the commercial value of
our legacy gas portfolio�
We are utilizing our gas and power portfolio by part of the volumes being
sold to our B2B customers in Denmark and the southern part of Sweden�
Gas pipelines and storage facilities
We handle the commercial activities relating to parts of the Ørsted Group’s
gas infrastructure�
We own pipelines in the Danish sector of the North Sea and have leased
capacity across the European pipeline system, securing access to most gas
markets in Northern Europe�
We have access to gas storage facilities in Denmark and Germany, where
we have capacity on long-term or short-term� Besides higher security of
supply, these storage facilities provide flexibility in our gas optimisation
and trading�
Environment
As part of the Ørsted Group, we work for an increase in the use of
renewable energy, while remaining dependent on traditional energy
sources to ensure a stable distribution of power�
Reference is made to the Ørsted Group’s 2022 annual report, which
includes the Group’s statutory environmental statement�
10
Overview
Ørsted Salg & Service Annual report
2022
Management’s review
Gazprom Export suspended its deliveries
under the sourcing contract from 1 June
2022. The contract with Gazprom Export
has subsequently been terminated pursu-
ant to the provisions in the contract due
to long-term force majeure on the part of
Gazprom Export.
In 2022, we completed the phase out of our
UK B2B activities, whereafter we only have
insignificant B2B activities in UK.
Risk management
The activities, financial position, results,
and future growth of the Ørsted Salg &
Service A/S are affected by a number of
non-financial and financial commercial risks.
Therefore, we regularly review our risk profile
and the associated risk policies to ensure
the appropriate balancing of risk exposure
and activities at all times.
Formalised risk management is divided into:
– management of general commercial risks,
– management of financial risks and
– management of insurable risks.
Commercial risks are defined as events that
may, with a certain probability, adversely
impact the realisation of the Ørsted Salg
& Service A/S financial results or strategy.
The management of commercial risks is
anchored in the individual segments in
the Ørsted Salg & Service A/S and consol-
idated at corporate level. Once annually,
the Ørsted Salg & Service A/S identifies and
prioritises its risks in a risk matrix based on
materiality and probability. For further
details of risk management, reference is
made to note 28.
In addition to these risks, we are involved
in litigation and arbitration proceedings,
the outcome of which may impact our
financial position. Reference is made to
note 29 ‘Contingent liabilities and other
liabilities’.
Management
The member of the Executive Board is:
Rune Sonne Bundgaard-Jørgensen
CEO
The members of the Board of Directors are:
Daniel Lerup
Chairman of the Board of Directors.
Anja Forup
Deputy Chairman of the Board of Directors.
Heidi Lohse
Member of the Board of Directors since
28 March 2023.
For further details regarding remuneration,
see note 5 ‘Employee costs’ and note
6 ‘Share-based payment’.
Retention and development of skills
Our business is generally highly complex,
requiring special skills. Coupled with the
growing demand for talent, this increases
the challenge of attracting and retaining
employees. Much emphasis is placed on
making us an attractive workplace, and
various initiatives have been put in motion
for this purpose. These include manage-
ment development, skills development,
perform ance systems, talent develop-
ment, and collaboration with educational
institutions.
Liquidity and financing risks
Our liquidity and financing risks are man-
aged centrally by the Ørsted Group in
accordance with the defined principles and
delegated authorities laid down by the
Board of Directors of Ørsted A/S, in such a
way as to ensure that we have an adequate
capital base and adequate cash resources
at all times. One of the most important
financial management tasks in the Ørsted
Group is to secure sufficient and flexible
financial resources in relation to the Ørsted
Group’s day-to-day operations and invest-
ment programme. For this purpose, internal
management objectives have been estab-
lished determining required level of financial
resources, taking into account primarily
factors such as the investment programme,
cash flows from operating activities, and the
debt maturity profile. It is the Ørsted Group’s
financing policy to concentrate loans in the
parent company in order to optimise the
loan portfolio on a consolidated basis.
Insurable risks
The Ørsted Group has an extensive facility
and liability insurance programme, while the
scope of consequential loss insurance is very
limited. Also, separate insurance is taken
out for certain large construction projects.
The facilities insurance largely relates to the
membership of the reinsurance company
´Oil Insurance Ltd.´ Through this, assets up to
USD 450 million are insured, with an excess
of USD 10 million per insurance event. With
a view to achieving adequate cover for a
number of large assets, this cover has been
supplemented by a number of supplemen-
tary insurance policies through the commer-
cial insurance market. As part of the optimi-
sation of its insurance portfolio, the Ørsted
Group has established a captive, Ørsted
Insurance A/S, that is authorised to carry on
insurance business and is subject to super-
vision by the Danish Financial Supervisory
Authority. Ørsted Insurance A/S is primarily
used to provide insurance cover for facilities
and certain construction projects.
Environmental, social, and governance
statement (ESG)
In pursuance to Section 99a (7) of the Danish
Financial Statements Act, the Company has
omitted information on corporate social
resonsibility. We are part of the Ørsted Group,
and reference is consequently made to the
Ørsted Group’s 2022 annual report, which
includes the Group’s statutory ESG report.
Further details on ESG can be found at
https://orsted.com/sustainability2022
11
Overview
Ørsted Salg & Service Annual report
2022
Management’s review
Policies for the underrepresented gender
Statement of policy for data ethics
In pursuance of Section 99d of the Danish
Financial Statements Act, the Company has
omitted information on data ethics.
Reference is made to the Data Ethics state-
ment 2022 for Ørsted A/S:
12
Overview
Ørsted Salg & Service Annual report
2022
Management’s review
Statement of comprehensive income
1 January – 31 December
Note DKKm 2022 2021
2 Revenue 93,611 45,785
3 Cost of sales (91,053 ) (44,981 )
4 Other external expenses (573 ) (485 )
5, 6 Employee costs (272 ) (238 )
7 Other operating expenses (1,197 ) (2 )
Operating profit (loss) before depreciation, amortisation and impairment losses (EBITDA) 516 79
13, 14 Depreciation, amortisation and impairment losses on intangible assets and property, plant and equipment (97 ) (120 )
15 Impairment on investments in subsidiaries - (852 )
Operating profit (loss) (EBIT) 419 (893 )
Gain (loss) on divestment of enterprises 2 (1 )
9 Financial income 2,567 1,505
10 Financial expenses (2,893 ) (1,359 )
Profit (loss) before tax 96 (748 )
11 Tax on profit (loss) for the year (11 ) 512
Profit (loss) for the year from continuing operations 85 (236 )
12 Profit (loss) for the year from discontinued operations (18 ) (31 )
Profit (loss) for the year 67 (267 )
Other comprehensive income
1
:
Value adjustments of cash flow hedging (5,276 ) (4,154 )
Cash flow hedging transferred to revenue 4,223 81
Cash flow hedging transferred to other operating expenses (1,197 ) -
Tax on comprehensive income 494 898
Total comprehensive income (1,689 ) (3,442 )
Profit (loss) for the year is attributable to:
Shareholder in Ørsted Salg & Service A/S 67 (267 )
Profit (loss) for the year 67 (267 )
Total comprehensive income for the year is attributable to:
Shareholder in Ørsted Salg & Service A/S (1,689 ) (3,442 )
Total comprehensive income (1,689 ) (3,442 )
1 All items in “Other comprehensive income” may be recycled to the income statement�
14
Financial statements
Ørsted Salg & Service Annual report
2022
Statement of comprehensive income
Note
Assets
DKKm 2022 2021
Rights 4 4
Completed development projects 20 35
Development projects in progress 78 75
13
Intangible assets 102 114
Land and buildings 2 2
Production assets 356 392
14
Property, plant and equipment 358 394
15 Investments in subsidiaries 200 262
18 Derivatives 2,016 328
17 Deferred tax 3,442 4,226
Other receivables 3 1
Other non-current assets 5,661 4,817
Non-current assets 6,121 5,325
16 Inventories 5,450 5,088
18 Derivatives 48,179 39,044
20 Trade receivables 7,733 5,639
Receivables from group enterprises 11,752 5,337
Income tax 1,758 -
21 Other receivables 3,755 8,100
23 Securities 380 414
23 Cash 3,169 268
Current assets 82,176 63,890
Assets 88,296 69,215
Note
Equity and liabilities
DKKm 2022 2021
Share capital 2,610 1,110
Development costs reserve 79 110
Hedging reserve (4,931 ) (3,175 )
Retained earnings 21,454 7,858
24
Equity 19,212 5,903
25 Provisions 1,179 1,529
Lease liabilities - 19
18 Derivatives 10,523 3,275
26 Contract liabilities 4 4
Other payables 1 -
Non-current liabilities 11,707 4,827
25 Provisions 3 170
Lease liabilities 19 75
19 Derivatives 39,358 40,863
26 Contract liabilities 121 383
Trade payables 7,223 5,807
Payables to group enterprises 10,370 8,991
21 Other payables 283 147
22 Income tax - 2,049
Current liabilities 57,377 58,485
Liabilities 69,084 63,312
Equity and liabilities 88,296 69,215
Balance sheet
31 December
15
Financial statements
Ørsted Salg & Service Annual report
2022
Balance sheet
Statement of shareholder’s equity
1 January – 31 December
2022 2021
DKKm
Share
capital
Hedging
Reserve
Develop-
ment cost
reserve
Retained
earnings Total
Share
capital
Hedging
Reserve
Develop-
ment cost
reserve
Retained
earnings Total
Equity at 1 January 1,110 (3,175 ) 110 7,858 5,903 1,110 - 89 8,149 9,348
Comprehensive income for the year:
Profit (loss) for the year - - (31 ) 98 67 - - 21 (288 ) (267 )
Impact from cash flow hedging - (2,250 ) - - (2,250 ) - (4,073 ) - - (4,073 )
Tax on cash flow hedging - 494 - - 494 - 898 - - 898
Total comprehensive income - (1,756 ) (31 ) 98 (1,689 ) - (3,175 ) 21 (288 ) (3,442 )
Transactions with owners:
Capital injection 1,500 - - 13,500 15,000 - - - - -
Demerger of assets and liabilities - - - (3 ) (3 ) - - - (4 ) (4 )
Share-based payment - - - 1 1 - - - 1 1
Total changes in equity 1,500 (1,756 ) (31 ) 13,498 14,998 - (3,175 ) 21 (291 ) (3,445 )
Equity at 31 December 2,610 (4,931 ) 79 21,454 19,212 1,110 (3,175 ) 110 7,858 5,903
16
Financial statements
Ørsted Salg & Service Annual report
2022
Statement of shareholder’s equity
Accounting policies
The statement of cash flows shows cash flows
for the year from operating, investing, and
financing activities, the year’s changes in cash
and cash equivalents, and cash and cash equiva-
lents at the beginning and end of the year�
The cash flow effect of acquisitions and divest-
ments of enterprises is disclosed separately
under cash flows from investing activities�
Cash flows relating to acquired enterprises are
recognised in the statement of cash flows from
the date of acquisition, and cash flows relating
to divested enterprises are recognised up to the
date of divestment�
Cash flows from operating activities are deter-
mined using the indirect method as operating
profit adjusted for non-cash operating items,
changes in working capital, interest received and
paid, dividends received, and income tax paid�
Cash flows from investing activities comprise
payments in connection with the acquisition
and divestment of enterprises and activities;
purchase and sale of intangible assets, property,
plant and equipment and other non-current
assets; and purchase and sale of securities that
are not recognised as cash and cash equivalents�
Finance leases are accounted for as non-cash
transactions�
Cash flows from financing activities comprise
changes in the size or composition of share
capital and costs associated with such changes
as well as the raising of loans, repayment of
interest -bearing debt, purchases and sales of
treasury shares, and payment of dividends
to owners�
Cash flows relating to assets held under finance
leases are recognised as payment of interest and
repayment of debt�
Cash and cash equivalents comprise cash as
well as securities that form part of the ongoing
cash management, are readily convertible to
cash, and are subject to an insignificant risk of
changes in value�
Cash flows in currencies other than the func-
tional currency are translated at the average
exchange rates for the month in question, unless
these differ significantly from the rates at the
transaction date�
Statement of cash flows
1 January – 31 December
Note DKKm 2022 2021
Operating profit (loss) before depreciation and amortisation
(EBITDA) 516 79
Other items
1
(7,958 ) (323 )
27 Change in working capital 3,094 (9,787 )
Cash flows from operations (operating activities) (4,348 ) (10,031 )
Interest income and similar items 2,291 798
Interest expenses and similar items (2,470 ) (849 )
Income tax paid (2,540 ) (600 )
Cash flows from operating activities (7,067 ) (10,682 )
13 Acquisition of intangible assets (3 ) (35 )
Sale of enterprises - 9
15 Investments in subsidiaries - (827 )
Other investments - (45 )
Received dividends 65 -
Cash flows from investing activities 62 (898 )
Financial transactions with the Ørsted Croup’s internal bank (10,005 ) 11,783
Capital transactions principal shareholders 15,000 -
Loan proceeds from Ørsted Group 5,008 (232 )
Deposit of restricted cash (1,805 ) -
Instalments on leases (75 ) (73 )
Paid dividend (3 ) (4 )
Cash flows from financing activities 8,120 11,474
Cash flows from continuing operations 1,114 106
12 Cash flows from discontinuing operations (18 ) (67 )
Total net change in cash and cash equivalents 1,096 39
Cash and cash equivalents at 1 January 28 (11 )
Net increase/(decrease) in cash 1,096 39
23 Cash and cash equivalents at 31 December 1,124 28
1 ‘Other items’ primarilly comprise changes in value adjustments of derivative
financial instruments DKK -7�3 billion, changes in provisions DKK -488 million
and other changes DKK -144 million�
17
Financial statements
Ørsted Salg & Service Annual report
2022
Statement of cash flows
Note Key accounting estimates and judgements
Estimate/
judgement
Extent of accounting estimates
and judgements
25 & 29 Provisions and
Contingent assets and liabilities
Assumptions for decommissioning obligations
Estimate of onerous contracts
Estimate of litigation outcomes
Estimate
Estimate
Estimate
28 Market risk policy Valuation of long-term power purchase agreements
Effectiveness of hedge reserve
Estimate
Judgement
Extent of accounting estimates and judgements
relates to objectivity and business practice�
Very objective/market-conforming
Objective/partially conforming
Partially subjective/partially distinctive
Subjective/distinctive for Ørsted
1. Basis of reporting
Accounting policies
Ørsted Salg & Service A/S is a public limited
The financial statements for the period
1 January – 31 December 2022 comprise the
parent company Ørsted Salg & Service A/S.
The financial statements have been pre-
pared in accordance with the International
Financial Reporting Standards (IFRS) as
adopted by the EU and further requirements
in the Danish Financial Statements Act (Års-
regnskabsloven). We provide a more detailed
description of the accounting policies
applied in the specific notes.
The financial statements are presented
in million Danish kroner (DKK), unless
otherwise stated.
Pursuant to sections §112, of the Danish
Financial Statements Act, the company
has not prepared consolidated financial
statements.
Measurement basis
The financial statements have been pre-
pared on historical cost basis except for
derivatives, financial instruments, and car-
bon emission allowances in trading portfolio
that are measured at market value.
The accounting policies have been applied
consistently to the financial year and for the
comparative figures.
Key accounting estimates and judgements
The use of reasonable estimates and judge-
ments is an essential part of the preparation
of the financial statements.
Given the uncertainties inherent in our busi-
ness activities, we make a number of esti-
mates regarding judgements. The estimates
and judgements are based on assumptions
concerning future developments which
affect our application of accounting policies
and reported amounts of our assets, liabil-
ities, sales, costs, cash flows, and related
disclosures. Actual amounts may differ
from the amounts estimated and estimates
made as more detailed information becomes
available.
We regularly reassess these estimates and
judgements, based among other things on
historical experience, the current situation in
the financial markets, and a number of other
relevant factors, e.g. the expected effects
of Brexit.
Accounting estimates, judgements and
assumptions which may entail a risk of
material adjustments in subsequent years
are listed in the table on page 19.
In addition, we make judgements when we
apply the accounting policies.
Reference is made to the specific notes for
further information on the key accounting
estimates and judgements as well as the
assumptions applied.
Foreign currency translation
Transactions in currencies other than the
functional currency, of DKK are accounted
for as transactions in foreign currencies
and translated on initial recognition at the
exchange rate at the transaction date.
Exchange differences arising between the
exchange rate at the transaction date and
at the date of payment are recognised in
profit (loss) for the year as financial income
or expenses.
Receivables, payables, and other monetary
items in foreign currencies are translated
at the exchange rates at the balance sheet
date. The difference between the exchange
rate at the balance sheet date and the date
at which the receivable or payable arose
is recognised in profit (loss) for the year as
financial income or expenses.
19
Notes
Ørsted Salg & Service Annual report
2022
1� Basis of reporting
Balance sheet items are translated at the
exchange rates at the balance sheet date.
All exchange differences are recognised in
profit (loss) for the year.
Implementation of new standards and
interpretations
We regularly assess the impact of new IFRS
standards and interpretations. We implement
new IFRS standards and interpretations from
their mandatory effective dates at the latest.
We have not implemented any standards
(IAS and IFRS) or interpretations in 2022.
New standards and interpretations
IASB has issued a number of new or amended
standards and interpretations which have
not yet entered into force, and which have
consequently not been incorporated into
the consolidated financial statements for
2022. None of these amended standards
and interpretations are expected to have
any significant impact on our financial
statements.
20
Notes
Ørsted Salg & Service Annual report
2022
1� Basis of reporting
DKKm Offshore
Gas Markets
and Infra-
structure
Other , incl�
end-cus-
tomers
sales
2022
To ta l Offshore
Gas Markets
and Infra-
structure
Other, incl�
end-cus-
tomers
sales
2021
To ta l
Sale of gas 254 16,812 1,989 19,055 - 12,811 1,303 14,114
Sale of power 60,189 90 4,006 64,285 28,380 (3,701) 1,906 26,585
Other revenue 2 233 - 235 186 - - 186
Sale of renewable energy certificates 6,150 - - 6,150 5,218 - - 5,218
Total revenue from customers 66,593 17,136 5,995 89,725 33,604 9,290 3,209 46,103
Trading activities, net 964 2,922 - 3,886 (614) 296 - (318)
Total revenue 67,558 20,058 5,995 93,611 32,990 9,586 3,209 45,785
Timing of revenue recognition from customers
At a point in time 64,748 12,476 - 77,224 30,744 4,877 - 35,621
Over time 1,846 4,660 5,995 12,501 2,860 4,413 3,209 10,482
Total revenue from customers 66,593 17,136 5,995 89,725 33,604 9,290 3,209 46,103
2. Revenue
Accounting policies
Revenue
Revenue is measured based on the con-
sideration specified in a contract with a
customer (transaction price) and excludes
amounts collected on behalf of third par-
ties, i�e� VAT� We recognise revenue when
we transfer control over a product or ser-
vice to a customer�
We adjust the transaction price for the
time value of money if the payments
exceed twelve months�
Sales agreements are divided into individu-
ally identifiable performance obligations� If
a sales agreement includes several perfor-
mance obligations, the sales agreement’s
transaction price is allocated to each
performance obligation’s stand-alone
selling price�
Sale of gas
Timing of satisfaction of delivery
obligations and significant estimates
Revenue is recognised when control of the
gas is transferred to the buyer� Transfer
of control occurs either when the gas is
injected into the distribution system or
physically delivered to the customer�
Significant terms of payment and
associated estimates and assessments
Sales contracts for a fixed amount of gas
at a variable price, or where we are exclu-
sive suppliers to the customer at a varia-
ble price, are considered one performance
obligation with multiple deliveries to be
satisfied over time� For such contracts, we
recognise revenue in the amount up to
which we have a right to invoice�
In most cases, the consideration for the
gas is due when the gas is injected into
the distribution system or delivered to the
customer� The delivery of gas is invoiced
on a monthly basis, and the payment is
due within 10-30 days�
→
The timing of transfer of goods or services
to customers is categorized as follows:
´At a point in time´ mainly comprises:
– sale of gas or power in the market, e.g.
North Pool, NBP
´Over time´ mainly comprises:
– delivery of gas and power to
end-customers
– long-term contracts with customers
to deliver gas or power
Total revenue from sale of goods in 2022
amounted to DKK 93,301 million (2021:
45,404) and total revenue from sale of
services 2022 DKK 310 million (2021: 381).
21
Notes
Ørsted Salg & Service Annual report
2022
2� Revenue
DKKm 2022 2021
Gas (18,448) (11,505)
Power (72,160) (32,529)
Distribution and transmission costs (217) (777)
Other cost of sales (228) (170)
Cost of sales (91,053) (44,981)
3. Cost of sales
Sale of power
Types of goods and services
Revenue from sale of power includes the sale of
power produced at own wind farms and power
stations, the sale of power sourced from other
producers, and the sale of ancillary services�
Timing of satisfaction of delivery
obligations and significant estimates
Revenue is recognised when control of the goods
is transferred to the buyer� Transfer of control
occurs when the actual power is delivered to
the customer, which for power generated by us
occurs when it is produced�
Significant terms of payment and
associated estimates and assessments
Sales contracts for a fixed amount of power
at a variable price, or where we are exclusive
suppliers to the customer at a variable price,
are considered one performance obligation
with multiple deliveries to be satisfied over time�
For such contracts and for long-term agreements
on selling power at a fixed price, we recognise
revenue in the amount up to which we have a
right to invoice�
In most cases, the consideration for the power
is due when the actual power is delivered to the
customer� The delivery of power is invoiced on
a monthly basis, and the payment is due within
10-30 days�
Other revenue
Types of goods and services
Other revenue primarily includes consultancy
services�
Timing of satisfaction of delivery
obligations and significant estimates
Revenue from providing services is recognised
in the accounting period in which the services
are rendered�
For fixed-priced contracts, revenue is recognised
based on the actual service rendered at the
end of the reporting period as a proportion
of the total services to be rendered because
the customer receives and uses the benefits
simultaneously� This is determined based on the
actual labour hours spent relative to the total
labour hours expected�
Significant terms of payment and
associated estimates and assessments
Fixed-price contracts are invoiced on a monthly
basis, and consideration is payable when invoiced�
Variable fee services are generally due after the
services are rendered�
Trading activities net
Income from trading activities comprises net
realised and unrealised fair value changes, realised
gains and losses arising from trading within
energy commodity derivatives and inventory held
for trading� The energy commodity derivatives
make up Ørsted Salg & Service A/S trading
portfolio which includes futures, options, swaps,
transport, capacities and certain forward sales
and forward purchases commodity contracts
that are either financially or physically settled� As
the physically settled contracts are managed on
a portfolio basis, a practice of net settlement is
present, and the contracts are considered in scope
of IFRS 9 and treated as derivatives� Net changes
in fair value of commodity derivatives and net
changes in fair value of inventory held for trading
represents unrealised changes in the fair value of
commodity derivatives and net changes in fair
value of inventory held for trading at the balance
sheet date�
Accounting policies
Cost of sales
Cost of sales for fuel and energy comprises the
purchases of fuel in the form of gas and power
and transportation costs in connection with the
purchase as well as costs related to carbon emis-
sion allowances� Costs are recognised in profit for
the year as incurred�
Continued
4. Other external expenses
Other external expenses comprise expenses
for maintenance of production equipment,
rent, external assistance, research and
development and office supplies, etc.
22
Notes
Ørsted Salg & Service Annual report
2022
2� Revenue | 3� Cost of sales | 4� Other external expenses
Remuneration for the Board of Directors
and the Executive Board
DKKm
Board of Directors Executive Board
2022 2021 2022 2021
Salary - - (0�6) (2�3)
Bonus - - (0�1) (0�2)
Share-based payments - - (0�1) (0�1)
Salary in notice period and severance payment - - (1�2) -
Pension, incl� social security and benefits - - (0�1) (0�1)
To ta l - - (2.1) (2.7)
The total remuneration stated in the note
only includes remuneration attributable to
Ørsted Salg & Service A/S. The Executive
Board is made up of one person, which is also
Key Management Person (KMP). A bonus plan
has been established for the Executive Board.
The contract of service of the Executive
Board includes a termination package under
which the Executive Board will be entitled to
the equivalent of 24 months’ salary if their
contract of service is terminated by the com-
pany. The board of directors has not been
paid remuneration.
6. Share-based payment
Share programme
The Executive Board and a limited number of
other members of senior management parti-
cipate in our share programme established
in 2016. Today, approximately eight senior
executives participate in the programme.
As a condition for the award of performance
share units (PSUs), the participant must own
a number of shares in Ørsted A/S correspond-
ing to a part of the individual participant’s
annual base salary. The ownership require-
ment is between 15-75 % of the fixed salary.
If the participants fulfil the shareholding
requirement at the time of granting, they
will be granted a number of PSUs each
year, representing a value of 15-20 %, of the
annual fixed salary on the date of granting.
The granted PSUs have a vesting period of
three years, after which each PSU entitles
the holder, without payment, to receive a
number of shares corresponding to 0-200 %
of the number of PSUs granted. The vesting
is conditional upon continued employment.
Assuming no share price development since
the grant, the value would correspond to
0-30 % or 0-40 % of the fixed salary on the
date of grant.
The final number of shares for each partici-
pant will be determined on the basis of the
total shareholder return delivered by Ørsted,
benchmarked against ten comparable
European energy companies.
The highest rate (200 %) will be triggered
if Ørsted’s results, measured as the total
return to shareholders, outperform those of
the comparable companies. For each lower
ranking, the number of shares granted will
fall by 20 percentage points (% points). If, for
example, Ørsted ranks third, the partici-
pants will be entitled to 160 % of the target.
If Ørsted ranks 11 in the comparison, no
shares will be granted to the participants.
The right to shares is conditional upon con-
tinued employment.
Accounting policies
The share programme is classified as an
equity-based programme, as the programme
is settled in shares� The market value of the
PSUs and the estimated number of PSUs
granted are measured at the time of granting
and recognised in the income statement
under employee costs over the vesting period
and in the balance sheet under equity over
the vesting period�
The valuation of the PSUs and the estimated
number of PSUs granted are carried out as a
probability simulation based on the expected
performance of Ørsted’s total shareholder
return relative to ten comparable European
energy companies� The expectations are
factored into the market value and are not
adjusted subsequently�
Accounting policies
Employee costs comprise wages, salaries,
remuneration, pensions, social security costs
and other employee-related costs�
Number of employees
Employee data is recognised based on records
from the Group’s ordinary registration systems�
The number of employees is determined as
the number of employees at the end of each
month converted to full-time equivalents
(FTEs)� Employees who have been made
redundant are recognised until the expiry of
their notice period, regardless of whether they
have been released from all or some of their
duties during their notice period�
DKKm 2022 2021
Wages, salaries, and remuneration (252) (213)
Share-based payment (1) (1)
Pensions (18 (17)
Other social security costs (1) (2)
Other employee costs - (5)
Employee costs before transfer to assets (272) (238)
Transfer to assets - -
Total employee costs (272) (238)
Number of full-time employees
Average for the financial year 269 256
5. Employee costs
23
Notes
Ørsted Salg & Service Annual report
2022
5� Employee costs | 6� Share-based payment
DKKm 2022 2021
Statutory audit (2) (1)
Total fees to PwC (2) (1)
DKKm 2022 2021
Interest income 3 2
Interest income from group enterprises 15 228
Foreign exchange gains 2,484 1,275
Other financial income 65 -
Financial income 2,567 1,505
Revenue for the year includes exchange rate and fair value adjustments of: 15 (27)
DKKm 2022 2021
Interest expenses (161) (18)
Interest expenses to group enterprises (141) (16)
Interest element of provisions (37) (43)
Foreign exchange losses (2,554) (1,277)
Other financial expenses - (5)
Financial expenses (2,893) (1,359)
PwC is Ørsted’s auditor appointed by
the general meeting. PwC audits the
consolidated financial statements of Ørsted
and the subsidiaries’ financial statements in
all the countries where we are represented.
8. Auditor’s fees
7. Other operating expenses 9. Financial income
10. Financial expenses
Accounting policies
Financial income and financial expenses com-
prise interest, capital gains and losses, and
impairment losses relating to securities, payables,
and transactions denominated in foreign curren-
cies, amortisation of financial assets and liabili-
ties, including lease commitments under finance
leases, as well as surcharges and refunds under
the on-account tax scheme, etc�
Financial income and financial expenses also
include realised and unrealised gains and losses
relating to derivative financial instruments that
have not been entered into to hedge revenue or
production costs� Interest is recognised in accord-
ance with the accrual basis of accounting�
Borrowing costs relating to general borrowing or
loans directly attributable to the acquisition, con-
struction, or development of qualifying assets
form part of the cost of such assets�
DKKm 2022 2021
Ineffective hedges, etc
1
(1,197) -
Miscellaneous operating expenses - (2)
To ta l (1,197) (2)
1 In 2021, ineffective hedges, etc, was DKK 195 million, presented as revenue�
Ineffective hedges includes volume-ineffec-
tive hedges as a consequence of
lower-than-expected offshore generation,
resulting in us having hedged too large vol-
umes. Furthermore, it includes other hedges,
which we cannot document as being effec-
tive from a hedge accounting perspective
and therefore have recognised in the income
statement.
24
Notes
Ørsted Salg & Service Annual report
2022
7� Other operating expenses | 8� Auditor’s fees | 9� Financial income | 10� Financial expenses
DKKm 2022 2021
Tax for the year can be specified as follows:
Tax on profit (loss) for the year (11) 512
Current tax on other comprehensive income 494 898
Tax for the year 483 1,410
Tax on profit (loss) for the year can be broken down as follows:
Current tax 777 (3,498)
Deferred tax (783) 3,524
Uncertain tax position - 500
Adjustments to current tax in respect of prior years (5) (136)
Adjustments to deferred tax in respect of prior years - 122
Tax on profit (loss) for the year (11) 512
Tax on profit (loss) for the year can be explained as follows:
Calculated 22�0% tax on profit (loss) before tax (21) 148
Tax effect of:
Non-deductible expenses (14) (122)
Movement in uncertain tax positions - 500
Non-taxable income 29 -
Adjustments to tax in respect of prior years (5) (14)
Tax on profit (loss) for the year (11) 512
Effective tax rate 12 % 76 %
11. Tax on profit (loss) for the year
Accounting policies
The Ørsted Group is subject to the Danish
rules on compulsory joint taxation and has
also opted for international joint taxation
with the Group’s foreign subsidiaries� The
Group’s subsidiaries are included in the joint
taxation from the date they are included
in the consolidation in the consolidated
financial statements and up to the date at
which they are no longer included in the
consolidation�
The parent company, Ørsted A/S, is the
administration company in relation to the
joint taxation and thus settles all payments
of income tax with the tax authorities�
The current Danish income tax is allocated
among the jointly taxed Danish subsidiar-
ies in proportion to their taxable income� In
this connection, Danish subsidiaries with tax
losses receive a joint taxation contribution
from the parent company corresponding
to the tax value of the unutilised losses (full
allocation), while companies that use tax
losses in other Danish companies pay a joint
taxation contribution to the parent com-
pany corresponding to the tax value of the
utilised losses�
Being made up of the year’s current income
tax, the year’s joint taxation contributions
and changes in deferred tax, including – as
a consequence of changed tax rates – tax
for the year is recognised in the income
statement with the part attributable to the
profit (loss) for the year and directly in equity
with the part attributable to entries directly
in equity�
The Group is included in a Danish on-account
tax scheme� Tax refunds and tax surcharges
are allocated between the jointly taxed Dan-
ish companies in accordance with the alloca-
tion of the Danish income tax and recognised
as financial income and financial expenses,
respectively�
25
Notes
Ørsted Salg & Service Annual report
2022
11� Tax on profit (loss) for the year
Profit from discontinued operations
DKKm 2022 2021
Revenue 3,900 5,664
Cost of sales (3,900) (5,664)
Other external expenses (23) (40)
Employee costs - -
Other operating expenses - -
Operating profit (loss) (EBITDA) (23) (40)
Gain (loss) on divestment of enterprises - -
Financial expenses - -
Profit (loss) before tax (23) (40)
Tax on profit (loss) for the year 5 9
Profit from discontinued operations (18) (31)
Tax for the year, discontinued operations
DKKm 2022 2021
Current tax 5 9
Deferred tax - -
Total tax 5 9
Cash flows for the year, discontinued operations
DKKm 2022 2021
Cash flows from operating activities (18) 67
Cash flows from investing activities - -
Total cash flows (18) 67
12. Discontinued operations
Following the decision and closure of our
UK B2B business, the activity is presented as
discontinued operations.
During 2022 the phaseout of the UK B2B
activities was finalised, whereafter there is
only insignificant B2B activities in UK. The
activity was completely closed down in
April 2023.
Financial performance
EBIT from UK B2B business amounts to
DKK -18 million compared to DKK -31 million
in 2021 due to reduced operating costs.
Total cash flows from UK B2B business in
2022 amounted to DKK -18 million from
operating activities.
26
Notes
Ørsted Salg & Service Annual report
2022
12� Discontinued operations
DKKm Rights
Completed
development
projects
Development
projects in
progress To ta l
Cost at 1 January 2022 68 411 75 554
Additions - - 3 3
Cost at 31 December 2022 68 411 78 557
Amortisation and impairment losses at 1 January 2022 (64) (376) - (440)
Amortisation and impairment losses - (15) - (15)
Amortisation and impairment losses at 31 December 2022 (64) (391) - (455)
Carrying amount at 31 December 2022 4 20 78 102
Cost at 1 January 2021 68 411 46 525
Additions - - 35 35
Disposals - (6) - (6)
Reclassified assets - 6 (6) -
Cost at 31 December 2021 68 411 75 554
Amortisation and impairment losses at 1 January 2021 (64) (343) - (407)
Amortisation and impairment losses - (39) - (39)
Disposals - 6 - 6
Amortisation and impairment losses at 31 December 2021 (64) (376) - (440)
Carrying amount at 31 December 2021 4 35 75 114
Amortised over 5 - 20 years 3 - 5 years - -
13. Intangible assets
Impairment testing
The carrying amounts of development
projects in progess, rights and completed
development projects are assessed
annually to determine whether there is
any indication of impairment. If any such
indication exists, an impairment test is
carried out.
There were no indications of impairment
in 2022.
Rights
Rights consist predominantly of customer-
related rights and a connection right relating
to gas transportation. At 31 December
2022, the carrying amount of rights
was calculated to DKK 4 million (2021:
DKK 4 million). There were no indications
of impairment of rights in 2022.
Development projects
Completed development projects related
to IT software. At 31 December 2022, the
carrying amount of development projects
was calculated to DKK 20 million (2021:
DKK 35 million).
Development projects in progress are
related to development of IT software.
27
Notes
Ørsted Salg & Service Annual report
2022
13� Intangible assets
Accounting policies
Rights
Rights comprise acquired customer rights, IT software
licences, etc�, and are measured at cost less accumu-
lated amortisation and impairment losses�
Development projects
Development projects comprise development of
IT systems, etc�
Development projects that are clearly defined
and identifiable, and for which technical feasibility,
adequate resources, a potential future market, or an
application in the company can be demonstrated,
and which the company intends to manufacture,
market, or use, are recognised in intangible assets if
the cost can be determined reliably, and if there is
reasonable certainty that the future earnings or the
net selling price will cover production costs, selling
costs, administrative expenses, and development
costs� Other development costs are recognised in
the income statement as incurred�
Recognised development costs are measured at
cost less accumulated depreciation and impairment
losses� Cost comprises salaries, amortisation, and other
costs attributable to the company’s development
activities as well as borrowing costs relating to
specific and general borrowing directly attributable
to development projects�
On completion, development projects are amortised
on a straight-line basis over their assessed future
useful lives from the date the asset is available for use�
The amortisation period is usually five years� The basis
of amortisation is reduced by any impairment losses�
Amortisation and impairment losses relating to
intangible assets are recognised in the statement of
comprehensive income�
Impairment of non-current assets
Intangible assets with an indefinite useful life are tested
for impairment annually, initially before the end of the
year of acquisition� Development projects in progress
are also tested annually for impairment�
An impairment loss is recognised whenever the carrying
amount of an asset or cash- generating unit exceeds the
recoverable amount of the asset or the cash-generating
unit� Impairment losses are recognised in the income
statement under production costs and administrative
expenses, respectively�
Impairment losses are reversed to the extent that the
assumptions or estimates that led to the impairment
have changed� Impairment losses are only reversed to
the extent that the asset’s new carrying amount does
not exceed the value of the asset after depreciation or
amortisation, had no impairment losses been charged�
28
Notes
Ørsted Salg & Service Annual report
2022
11� Intangible assets
DKKm
Land and
buildings
Production
assets
Fixtures and
fittings, tools
and equipment
Property, plant,
and equipment
under
construction To ta l
Cost at 1 January 2022 11 8,290 4 - 8,305
Adjustment of decommissioning obligations - 45 - - 45
Additions - 1 - - 1
Cost at 31 December 2022 11 8,336 4 - 8,351
Depreciation and impairment losses at 1 January 2022 (9) (7,898) (4) - (7,911)
Depreciation and impairment losses - (82) - - (82)
Depreciation and impairment losses at 31 December 2022 (9) (7,980) (4) - (7,993)
Carrying amount at 31 December 2022 2 356 - - 358
Cost at 1 January 2021 11 8,296 4 2 8,313
Adjustment of decommissioning obligations - (6) - - (6)
Disposals - - - (2) (2)
Cost at 31 December 2021 11 8,290 4 - 8,305
Depreciation and impairment losses at 1 January 2021 (9) (7,817) (4) - (7,830)
Depreciation and impairment losses - (81) - - (81)
Depreciation and impairment losses at 31 December 2021 (9) (7,898) (4) - (7,911)
Carrying amount at 31 December 2021 2 392 - - 394
Depreciated over 20 years 20 - 40 years 3 - 10 years - -
14. Property, plant and equipment
Impairment testing of property,
plant and equipment
The carrying amounts of property, plant
and equipment are assessed annually to
determine whether there is any indication
of impairment. If any such indication exists,
an impairment test is carried out.
There were no indications of impairment
of property, plant and equipment in 2022.
29
Notes
Ørsted Salg & Service Annual report
2022
14� Property, plant and equipment
Accounting policies
Property, plant and equipment comprise land and
buildings, production assets and other tools and equip-
ment� Property, plant and equipment which are not
leases are measured at cost less accumulated depreci-
ation and impairment losses�
Cost comprises the purchase price and any costs
directly attributable to the acquisition until the date the
asset is available for use� The cost of self- constructed
assets comprises direct and indirect expenses for mate-
rials, components, sub-suppliers, and wages� Finance
costs that can be attributed to a preparation or pro-
duction period are recognised in the income statement
as finance costs� Specific and general borrowing costs
attributable to a construction period are recognised in
the cost of the asset constructed�
Cost is increased by the present value of the esti-
mated costs for dismantling and removing the asset
and restoring the site to the extent that they are
recog nised as a provision� The cost of an assembled
asset can be divided into separate components that
are each depreciated separately if the useful lives of
the individual components differ�
In the case of assets held under lease agreements,
cost is determined as the lower of the fair value of the
assets and the present value of future minimum lease
payments� The present value is determined using the
interest rate implicit in the lease as the discount rate or
an approximated value�
Subsequent costs, for example in connection with
replacement of parts of an item of property, plant and
equipment, are recognised in the carrying amount of
the asset in question when it is probable that future
economic benefits will flow to the company from the
expenses incurred� Replaced parts are derecognised
from the balance sheet, and their carrying amounts
are taken to the income statement� All other general
repair and maintenance expenses are recognised in
the income statement as incurred�
Development and construction costs relating to
property, plant and equipment are recognised, until
entry into service, in the balance sheet under property,
plant and equipment under construction� Following
entry into service, these assets are transferred to the
relevant items in property, plant and equipment�
In the case of gas activities, cost is depreciated using
the unit-of-production method, taking into account
the expected earnings profile, so that the depreciation
pattern reflects the expected earnings patterns�
In the case of other property, plant and equipment,
cost is basically depreciated on a straight-line basis
over the estimated future useful lives�
Depreciation periods for property, plant and
equipment:
Depreciation periods for PP&E Years
Buildings used for own purposes
1
20
Production assets: gas treatment plant
2
20-40
Production assets: marine pipelines
2
20-40
Fixtures and fittings, tools and equipment 3-10
Assets under construction
3
-
1 Land is not depreciated�
2 The depreciation profile takes into account that
the use of the assets changes substantially over
the lives of the assets�
3 Depreciation does not commence until the date
of entry into service, at which date the assets are
transferred to production assets�
The basis of depreciation is determined on the basis of
the asset’s residual value less any impairment losses�
The residual value is determined at the acquisition
date and reassessed annually� Depreciation ceases if
the residual value exceeds the carrying amount�
If the depreciation period or the residual value
changes, the effect on depreciation is recognised
prospectively as a change in accounting estimates�
Depreciation and impairment losses are recognised
in the statement of comprehensive income to the
extent that depreciation is not recognised in the cost
of self-constructed assets�
Gains and losses on the disposal of property, plant and
equipment are determined as the difference between
the selling price less selling costs and the carrying
amount at the date of disposal� Gains and losses are
recognised in the income statement as ‘Other operating
income’ or ‘Other operating expenses’�
30
Notes
Ørsted Salg & Service Annual report
2022
12� Property, plant and equipment
DKKm 2022 2021
Cost at 1 January 1,928 1,176
Adjustment, opening - (75)
Additions - 827
Adjustments to liquidated companies (63) -
Cost at 31 December 1,865 1,928
Value adjustments at 1 January (1,666) (889)
Adjustment, opening - 75
Adjustments to liquidated companies 1 -
Impairment losses - (852)
Value adjustments at 31 December (1,665) (1,666)
Carrying amount at 31 December 200 262
We have tested investments in subsidiaries
for impairment by comparing the expected
future income in the individual subsidiary
with their carrying amounts.
In 2022, Orsted Energy Solutions (UK) Lim-
ited is liquidated and dividends of DKK 64
million is received.
In 2021, both impairment losses and addi-
tions are related to Orsted S&D (UK) Limited.
15. Investments in subsidiaries
Accounting policies
Investments in subsidiaries are measured at
cost� Cost is written down to the recovera-
ble amount whenever it exceeds the recov-
erable amount�
Ørsted Salg & Service A/S subsidaries
Company name Registered office Currency
Share capital
in million
Ownership
interest
Ørsted Salg & Service A/S Fredericia, Denmark DKK 2,610 100 %
Ørsted Markets GmbH Hamburg, Germany EUR 9�6 100 %
Ørsted Sales GmbH Hamburg, Germany EUR 1�0 100 %
Ørsted AB Gothenburg, Sweden SEK 5�0 100 %
Danish Offshore Gas Systems A/S Fredericia, Denmark DKK 1�0 100 %
Ørsted Pipelines A/S Fredericia, Denmark DKK 50�5 100 %
Nordic Impact Bridge ApS
Copenhagen,
Denmark DKK 0�1 7�31 %
Ørsted S&D (UK) Limited London, UK GBP 48�0 100 %
Ørsted Salg & Service NL, branch of
Ørsted Salg & Service A/S Denmark
‘s-Gravenhage, the
Netherlands EUR - 100 %
Ørsted Commercial Commodities A/S Fredericia, Denmark DKK 4�0 100 %
31
Notes
Ørsted Salg & Service Annual report
2022
15� Investments in subsidiaries
DKKm 2022 2021
Deferred tax at 1 January (4,226) (580)
Exchange rate adjustment - -
Deferred tax for the year recognised in profit (loss) 783 (3,524)
Deferred tax discontinued operations - -
Adjustments in respect of prior years - (122)
Deferred tax at 31 December (3,442) (4,226)
Deferred tax is recognised in the balance sheet as follows:
Deferred tax (assets) (3,442) (4,226)
Deferred tax (liability) - -
Deferred tax at 31 December, net (3,442) (4,226)
Deferred tax concerns:
Non-current assets 73 112
Non-current liabilities (314) (398)
Current assets 2 (398)
Current liabilities (3,202) (3,940)
Deferred tax at 31 December (3,442) (4,226)
17. Deferred tax
Deferred tax assets are expected to
be utilised for offsetting against the
settlement of deferred tax liabilities in
companies included in joint taxation in
the Ørsted Group.
DKKm 2022 2021
Gas 4,556 3,812
Green certificates 843 887
Carbon emission allowances (purchased) 49 388
Other inventories 1 1
Inventories at 31 December 5,450 5,088
The carrying amount of inventories recog-
nised at fair value was DKK 3,492 million
(2021: DKK3,161 million).
16. Inventories
Accounting policies
Inventories consist of gas in storage facilities and
in gas pipelines, acquired carbon emission allow-
ances, and green certificates�
Gas storage in non-Danish facilities are managed
on a fair value basis, and therefore the gas in
these storage facilities is recognised at fair value
less sales costs� Changes in the fair value less
costs to sell are recognised in cost of sales in the
period of the change�
Gas in Danish storage facilities are recognised at
cost and determined as a weighted average of
the previous month´s purchase price, including
transportation costs�
Purchased carbon emission allowances are
measured at fair value with value adjustments
recognised in the income statement�
Other inventories are measured at the lower of
cost using the first-in, first-out (FIFO) principle or
net realisable value� The net realisable value of
inventories is determined as the expected selling
price less any costs of completion and costs
incurred to execute the sale and is determined
taking into account marketability, obsolescence,
and development of expected selling price�
32
Notes
Ørsted Salg & Service Annual report
2022
16� Inventories | 17� Deferred tax
Change in temporary differences during the year
DKKm
Balance sheet
at 1 January
Recognised in
profit (loss) for the year
Balance sheet
at 31 December
2022
Intangible assets 8 (3) 5
Property, plant, and equipment 55 (7) 48
Current assets 49 (48) 1
Decommissioning obligations (120) (14) (134)
Other non-current liabilities (278) 120 (158)
Current liabilities and derivatives (3,940) 736 (3,204)
Tax loss carry forward - - -
To ta l (4,226) 784 (3,442)
2021
Intangible assets 15 (7) 8
Property, plant, and equipment 57 (2) 55
Current assets 2 47 49
Decommissioning obligations (117) (3) (120)
Other non-current liabilities (324) 46 (278)
Current liabilities and derivatives (213) (3,727) (3,940)
Tax loss carry forward - - -
To ta l (580) (3,646) (4,226)
Accounting policies
Deferred tax assets are reviewed annually
and recognised only to the extent that it is
probable that they will be utilised�
Deferred tax is measured using the bal-
ance sheet liability method in respect of all
temporary differences arising between the
tax bases of assets and liabilities and their
carrying amounts for financial reporting pur-
poses� However, deferred tax on temporary
differences in respect of office properties, and
other items – apart from business combina-
tions – is not recognised where temporary
differences have arisen at the acquisition
date without having any effect on profit (loss)
or taxable income� When the tax base can
be determined applying different taxation
rules, deferred tax is measured on the basis of
management’s intended use of the asset or
settlement of the liability, respectively�
Deferred tax assets, including the tax base
of tax loss carryforwards, are recognised
as other non-current assets at the value
at which they are expected to be utilised
either by elimination against tax on future
earnings or by set-off against deferred tax
liabilities within the same legal tax entity
and jurisdiction�
Deferred tax assets and deferred tax liabili-
ties are offset if the company has a legally
enforceable right to set off current tax assets
and current tax liabilities or intends either to
settle on a net basis or to realise the asset
and settle the liability simultaneously� Adjust-
ment of deferred tax is made relating to
eliminations made of unrealised intragroup
profits and losses� Deferred tax is measured in
accordance with the tax rules and tax rates in
the respective countries that will apply under
the legislation enacted at the balance sheet
date when the deferred tax is expected to
crystallise in the form of current tax�
Changes in deferred tax as a result of
changes in tax rates are recognised in the
income statement�
33
Notes
Ørsted Salg & Service Annual report
2022
17� Deferred tax
Financial instruments by category
DKKm
2022 2021
Carrying amount Fair value Carrying amount Fair value
Assets
Derivative financial instruments held for trading 46,675 46,675 30,818 30,818
Securities 380 380 414 414
Financial assets measured at fair value via the income statement 47,055 47,055 31,232 31,232
Derivative financial instruments held for hedging 3,520 3,520 8,554 8,554
Derivatives (assets) used ad hedging instruments 3,520 3,520 8,554 8,554
Trade receivables 7,733 7,733 5,639 5,639
Other receivables, cash, and cash equivalents 18,507 18,507 13,702 13,702
Loans and receivables 26,240 26,240 19,341 19,341
Equity and liabilities
Derivative financial instruments held for trading 40,103 40,103 31,295 31,295
Financial liabilities measured at fair value via the income statement 40,103 40,103 31,295 31,295
Derivatives finacial instruments held for hedging 9,778 9,778 12,843 12,843
Derivatives (liabilities) used as hedging instruments 9,778 9,778 12,843 12,843
Bank loans - - - -
Other payables 17,969 17,969 15,044 15,044
Financial liabilities measured at amortised cost 17,969 17,969 15,044 15,044
In 2022, we recognised volume ineffectiveness related to power, gas and oil hedges,
primarily related to exposure in 2023 and 2024� In total, these amounted to DKK -1,197
million (2021: DKK -269 million)�
18. Derivatives
Categories of financial instruments
Financial instruments are used for various
purposes. The purpose determines the
category, and whether the value adjust-
ment of the instrument should be recog-
nised in the profit (loss) for the year or as
part of the hedging reserve in equity.
The fair value of financial instruments
measured at amortised cost is identical
to the carrying amount.
Fair value measurement
All assets and liabilities measured at fair
value are measured on a recurring basis.
Quoted prices comprise derivative finan-
cial instruments that are traded in active
markets. It is customary to settle these
trades on a daily basis.
Observable inputs comprise derivative
financial instruments where valuation
models with observable inputs are used to
measure fair value. For commodity deriva-
tives we can directly apply the observable
commodity price adjusted for the credit
risk on the counterparty.
Significant non-observable inputs
Market values based on non-observable
input comprise primarily long-term con-
tracts on the purchase or sale of power.
Since there are no active markets for the
long-term prices of power, the market
34
Notes
Ørsted Salg & Service Annual report
2022
18� Derivatives
Energy price
cash flow hedge
accounting 2021
DKKm
Contractual
principal
amount
Maturity analysis Market value
Recognised
in compre-
hensive
income
Expected transfers to EBITDA/CAPEX
2022 2023 After 2023 Asset Liability 2022 2023 After 2023
EBITDA impact
Power swaps, fu-
tures and options 3,576 831 826 1,919 5,259 9,876 (5,556) (3,228) (1,558) (770)
Gas swaps and
futures 3�710 3�701 - 9 2,647 2,353 1,442 (18) (192) 1,652
Oil futures 19 - 7 12 52 29 30 2 3 25
Currency, forwards 1,411 1,488 3 (80) 596 585 11 9 1 1
To ta l 8,554 12,843 (4,073) (3,235) (1,746) 908
values have been determined through
an estimate of the future prices based
on an extrapolation of the forward curve
adjusted for inflation.
Estimating non-observable power prices
Since our corporate power puchase
agreements (CPPAs) are normally settled
on the actual production, and the power
prices available in the market are based
on a constant production (flat profile),
we take into account that our expected
production is not constant, and thus our
CPPAs will not be settled against a flat
profile price (intermittency adjustment).
For the majority of our markets, the flat
profile power price can be observed for
a maximum of four to six years in the
market, after which an active market no
longer exists.
Valuation principles and material
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 Group Treasury &
Risk Management function, which reports
to the Group CFO. The developments in
market values are monitored on a contin-
uing basis and reported to the Executive
Committee.
Energy price
cash flow hedge
accounting 2022
DKKm
Contractual
principal
amount
Maturity analysis Market value
Recognised
in compre-
hensive
income
Expected transfers to EBITDA/CAPEX
2023 2024 After 2024 Asset Liability 2023 2024 After 2024
EBITDA impact
Power swaps, fu-
tures and options 5,285 1,897 1,820 1,568 2,467 7,981 (4,585) (2,401) (1,414) (770)
Gas swaps and
futures 865 196 259 411 349 991 (1,556) (508) (733) (315)
Oil futures 15 9 6 - - - (10) (10) - -
Carbon emmision
allowances 46 46 - - - - (70) (70) - -
Currency, forwards 5,452 5,076 111 265 704 806 (102) (83) (4) (15)
To ta l 3,520 9,778 (6,323) (3,072) (2,151) (1,100)
35
Notes
Ørsted Salg & Service Annual report
2022
18� Derivatives
Economic hedging of fair values
DKKm
2022 2021
Receivables Payables
Hedging
instruments Net position Receivables Payables
Hedging
instruments Net position
EUR 38,804 (16,674) - 22,130 27,035 (15,552) - 11,483
USD 171 (814) - (643) 236 (696) - (460)
GBP 29,789 (37,203) - (7,414) 28,378 (34,484) - (6,106)
Other - (21) - (21) 2 (24) - (22)
To ta l 68,764 (54,712) - 14,052 55,651 (50,756) - 4,895
Contracts accounted for at fair value through profit or loss (EBITDA)
DKKm
2022 2021
Nominal
amount Fair value
Nominal
amount Fair value
Oil swaps 507 (803) 1,672 (755)
Gas swaps 3,093 2,339 3,264 (3,675)
Gas options 748 - - -
Power swaps 5,145 2,630 5,084 (1,151)
Power options 661 2,414 5,587 5,156
Coal forwards - (8) 85 7
Carbon emission allowances 50 - 186 (58)
Currency forwards - - - -
To ta l 6,572 (476)
36
Notes
Ørsted Salg & Service Annual report
2022
18� Derivatives
Accounting policies
Derivative financial instruments are used to
hedge currency and risks related to the price
of oil, gas, and power�
Derivative financial instruments are recog-
nised from the trading date as receivables
(positive fair values) and other payables
( negative fair values), respectively, and are
measured in the balance sheet at fair value�
Transaction costs are added to the fair value
on initial recognition, unless the financial
asset or financial liability is measured at fair
value with recognition of fair value adjust-
ments in profit (loss) for the year� Positive
and negative values are only offset if the
company is entitled to and intends to settle
several financial instruments net (in cash)�
The fair value of derivative financial instru-
ments is determined on the basis of current
market data and assumptions as well as
recognised valuation methods�
Value adjustments of derivative financial
instruments that act as economic hedges
of the company´s primary activities, but do
not satisfy the criteria for hedge accounting,
are recognised as revenue� Likewise, value
adjustments of financial contracts offered to
customers with a view to price hedging are
recognised as revenue� Value adjustments
of financial contracts that are not used as
economic hedges of the company’s princi-
pal activities or are part of the company’s
trading portfolio, are recognised as financial
income and expenses�
Under IFRS, contracts that involve physi-
cal delivery may, in certain circumstances,
be accounted for as derivative financial
instruments� The classification is determined
based on an evaluation of the purpose of
the contract compared with the companys’s
other activities� Contracts entered into in the
course of the company’s trading activities
or as part of certain hedging activities are
classified and accounted for as derivative
financial instruments, even though they are
settled on physical delivery�
Derivatives valued on the basis of non-observable inputs
DKKm 2022 2021
Market value at 1 January 620 179
Transferred to quoted prices and observable inputs due to market data having become
available - (163)
Gains and losses recognised in profit (loss) for the year as revenue 1,531 2,222
Sales and redemptions (2,849) 29
New trades 612 (1,647)
Market value at 31 December (86) 620
Net assets can be specified as follows:
Assets 8,084 5,166
Liabilities (8,170) (4,546)
The main non-observable input is German power prices in the period 2025-2034�
The average power price for the period is estimated at DKK 800 per MWh, based on an
inflation- adjusted extrapolation of the observable price� An increase or decrease in the
German power prices of 25 % would impact the fair value by +/- DKK 2,053 million�
Fair value hierarchy of financial instruments
DKKm
2022 2021
Quoted
prices
Observable
inputs
Non-
observable
inputs Total
Quoted
prices
Observable
inputs
Non-
observable
inputs Total
Commodity derivatives 14,539 27,270 8,084 49,893 9,551 24,003 5,166 38,720
Currency derivatives - 302 - 302 - 652 - 652
Total derivatives 14,539 27,572 8,084 50,195 9,551 24,655 5,166 39,372
Securities - 380 - 380 - 414 - 414
Inventories 3,492 - - 3,492 3,161 - - 3,161
Total assets measured at fair value 18,031 27,952 8,084 54,067 12,712 25,069 5,166 42,947
Commodity derivatives 12,829 28,482 8,170 49,481 12,744 26,188 4,546 43,478
Currency derivatives - 400 - 400 - 660 - 660
Total liabilities measured at fair value 12,829 28,882 8,170 49,881 12,744 26,848 4,546 44,138
37
Notes
Ørsted Salg & Service Annual report
2022
18� Derivatives
Netting of financial assets
DKKm
Recognised
financial assets,
gross
Financial liabilities,
offset
Related amounts not netted in the balance sheet
Financial assets
presented in the
balance sheet
Liabilities with
offsetting rights Security received Net amount
31 December 2022
Derivative financial instruments 39,398 (21,641) 17,757 (5,266) (3,322) 9,169
Trade receivables 121,693 (114,438) 7,255 - - 7,255
31 December 2021
Derivative financial instruments 79,779 (58,307) 21,472 (5,412) (3,430) 12,630
Trade receivables 43,203 (38,009) 5,194 - - 5,194
Netting of financial liabilities
DKKm
Recognised
financial liabilities,
gross
Financial assets,
offset
Related amounts not netted in the balance sheet
Financial liabilities
presented in the
balance sheet
Assets with
offsetting rights
Security provided
in the form of
bonds Net amount
31 December 2022
Derivative financial instruments 55,861 (21,641) 34,220 (5,266) (380) 28,574
Trade payables 121,661 (114,438) 7,223 - - 7,223
31 December 2021
Derivative financial instruments 96,789 (58,307) 38,482 (5,412) (414) 32,656
Trade payables 43,816 (38,009) 5,807 - - 5,807
Netting of financial assets and liabilities
The netting agreements with the indi-
vidual counterparties are often limited
to offsetting within specific products.
In addition, the settlement of liabilities
and the realisation of assets do often not
take place simultaneously.
We only offset positive and negative
values if we are entitled to and intend to
settle several financial instruments net.
Consequently, only some of the company’s
netting agreements meet the provisions
in IFRS on offsetting.
The table to the left show financial assets
and liabilities that are subject to netting
agreements and related security.
Net derivative assets valued on the basis
of non-observable inputs are specified in
the table on page 37.
38
Notes
Ørsted Salg & Service Annual report
2022
18� Derivatives
Maturity analysis of financial liabilities 2022
DKKm
Carrying
amount
Payment
obligation 2023 2024 2025-2026 After 2026
Payables to group enterprises 10,370 10,408 10,408 - - -
Trade payables 7,223 7,223 7,223 - - -
Fair value of derivative financial instruments 49,881 52,525 29,338 13,942 4,791 4,454
Other payables 283 283 283 - - -
31 December 67,757 70,439 47,252 13,942 4,791 4,454
Maturity analysis of financial liabilities 2021
DKKm
Carrying
amount
Payment
obligation 2022 2023 2024-2025 After 2025
Payables to group enterprises 8,991 8,991 8,991 - - -
Trade payables 5,807 5,807 5,807 - - -
Fair value of derivative financial instruments 44,138 44,038 32,077 7,271 2,307 2,383
Other payables 147 147 147 - - -
31 December 59,083 58,983 47,022 7,271 2,307 2,383
19. Maturity analysis of financial liabilities
39
Notes
Ørsted Salg & Service Annual report
2022
19� Maturity analysis of financial liabilities
Trade receivables that are overdue, but not individually impaired
DKKm 2022 2021
Days past due:
Up to 30 days 543 186
30-90 days 182 25
More than 90 days 400 9
Trade receivables, write-downs (13) (14)
Trade receivables overdue at 31 December 1,112 206
20. Trade receivables
Expected credit losses on trade receivables
are assessed on the basis of due date and
historical experience. For receivables with a
general credit risk, a write-down of 0-1 % is
carried out on initial recognition.
Accounting policies
Deferred income
Deferred income comprises payments
received in respect of income in subsequent
years, measured at cost� Deferred income
includes the value of unrecognised amounts
in respect of gas delivered under contract,
which is recognised at realisable value�
The value of gas free of charge delivered
under contract is spread proportionally over
the remaining contract period with a view
to accounting for purchased goods on an
accruals basis�
40
Notes
Ørsted Salg & Service Annual report
2022
20� Trade receivables
Other receivables
DKKm 2022 2021
Collateral provided 2,985 6,485
Margin calls 327 1,168
Deposits 431 412
Other 11 35
Total Other receivables 3,755 8,100
Collateral provided are margin account depositis, which have
been pledged as collateral for trading in financial instruments�
Margin calls are receivables from banks regarding market
development in financial instruments used for trading�
Other payables
DKKm 2022 2021
VAT and other indirect taxes 108 81
Other payables 175 66
Other current liabilities at 31 December 283 147
21. Other receivables and other payables
Accounting policies
Receivables
We keep our receivables until contractual
cash flows are collected, and they are there-
fore measured at amortised cost�
Write-downs are carried out from initial
recognition of our receivables� Write-down
is calculated as the difference between the
carrying amount of the receivable and the
net present value of expected future cash
flows from the receivable� The discount rate
used is the effective interest rate for the indi-
vidual receivable or the individual portfolio�
We apply the simplified approach to the
write-down of trade receivables, which per-
mits calculating the write-downs as the full
loss during the entire term of the receivable�
Other receivables include positive fair values
of derivative financial instruments, etc�
Financial liabilities
Trade payables, payable income tax,
and other payables are measured at net
realisable value� Other payables include
negative fair values of derivative financial
instruments, etc�
Financial liabilities whose values have been
effectively hedged are adjusted to fair value
to the extent of the hedged risk� The value
adjustment is recognised in the income
statement as financial income or financial
expenses�
41
Notes
Ørsted Salg & Service Annual report
2022
21� Other receivables and other payables
DKKm 2022 2021
Income tax receivable (asset) (1,757) -
Income tax payable (liability) - 2,049
Income tax at 31 December, net (1,757) 2,049
Income tax payable at 1 January 2,049 316
Adjustments to current tax in respect of prior years 5 136
Payments in respect of prior years (2,535) (437)
Current tax for the year (1,272) 2,099
Current tax discontinued operations (5) (9)
Payments in respect of the year - (56)
Income tax payable/receivable at 31 December (1,758) 2,049
DKKm 2022 2021
Cash and cash equivalents at 31 December include:
Cash, available 1,124 28
Cash and cash equivalents at 31 December 1,124 28
DKKm 2022 2021
Cash at 31 December can be broken down into the following balance sheet
items:
Cash, available 1,124 28
Cash, not available for use 2,045 240
Cash at 31 December 3,169 268
Securities at 31 December can be broken down into the following balance
sheet items:
Securities, not available for use 380 414
Securities at 31 December 380 414
22. Income tax receivable and payable 23. Cash, cash equivalents, and securities
Accounting policies
Current tax liabilities and current tax receivables
are recognised in the balance sheet as tax calcu-
lated on the year’s taxable income adjusted for
tax on previous years’ taxable income and tax
paid on account�
Financial liabilities
Trade payables, payable income tax, and other
payables are measured at net realisable value�
Other payables include negative fair values of
derivative financial instruments, etc�
Financial liabilities whose values have been
effectively hedged are adjusted to fair value to
the extent of the hedged risk� The value adjust-
ment is recognised in the income statement as
financial income or financial expenses�
Cash, cash equivalents, and securities
Securities not available for use comprise
securities pledged as collateral for:
– trading in financial instruments:
DKK 380 million at 31 December 2022
(2021: DKK 414 million)
Cash not available for use comprises:
– payables for the purchase of gas that
has not yet been settled placed on a
restricted account:
DKK 1,049 million (2021: DKK 0 million)
– collateral for other transactions:
DKK 996 million (2021: DKK 240 million)
42
Notes
Ørsted Salg & Service Annual report
2022
22� Income tax receivable and payable | 23� Cash, cash equivalents, and securities
24. Equity
Share capiral
The company’s annual report forms part of
the consolidated financial statements of
share capital.
Ørsted Salg & Service A/S´s capital is
DKK 2,610,000,000 (2021: 1,110 million)
divided into shares of DKK 1,000. The share
capital was increased in 2022 due to the
capital injection of DKK 1,500,000,000
and share premium DKK 13,500,000,000
received from Ørsted A/S to secure sufficient
liquidity.
All shares rank equally. There are no restric-
tions on voting rights.
Dividend
The Board of Directors recommends div-
idend of DKK 0 million to be paid for the
financial year 2022 (2021: DKK 0 million).
Capital management
Ørsted Salg & Service A/S’s liquidity and
financing risks are managed centrally by
Ørsted A/S in accordance with principles
and delegated authorities laid down by the
Board of Directors of Ørsted A/S in order to
ensure that Ørsted Salg & Service A/S has
an adequate capital base and adequate
cash resources at all times. One of the most
important financial management tasks in
the Ørsted Group is to secure sufficient and
flexible financial resources in relation to
the day-to-day operations and the Ørsted
Group’s investment programme. For this
purpose, internal management objectives
have been set for the required level of finan-
cial resources, primarily considering factors
such as the investment programme, cash
flows from operating activities, and the debt
maturity profile.
It is the Ørsted Group’s financing policy to
concentrate loans in the parent company
in order to optimise the loan portfolio on a
consolidated basis.
Accounting policies
Dividends
Proposed dividends are recognised as a
liability at the date of their adoption at
the annual general meeting (declaration
date)� Up to the declaration date, proposed
dividends are disclosed as a separate item
in equity�
43
Notes
Ørsted Salg & Service Annual report
2022
24� Equity
→
Provisions
DKKm
2022 2021
Decommissioning
obligations
Onerous
contracts
Other
liabilities Total
Decommissioning
obligations
Onerous
contracts
Other
liabilities Total
Provisions at 1 January 543 618 538 1,699 530 794 1,122 2,446
Provisions used during the year - (182) - (182) - (200) - (200)
Provisions reversed during the year - (300) (117) (417) - - (932) (932)
Provisions made during the year - - 1 1 - - 348 348
Interest element of obligations 19 18 - 37 19 24 - 43
Change in other abandonment factors 45 - - 45 (6) - - (6)
Total provisions 607 154 421 1,182 543 618 538 1,699
Falling due as follows
0-1 year - - 3 3 - 164 6 170
1-5 years - 154 418 572 - 454 532 986
After 5 years 607 - - 607 543 - - 543
25. Provisions
Decommissioning obligations
Decommissioning obligations relates to
expected future costs for restoration and
decommissioning of gas infrastructure
assets.
Onerous contracts
Onerous contracts comprise a contract for
gas storage capacity in Germany of DKK 154
million (2021: DKK 594 million)
Other provisions
Other provisions comprise primarily other
contractual obligations.
The estimated obligations have been
discounted to present value using either
the structural risk-free interest rate or the
incremental borrowing rate. The structural
risk-free rate is used for decommission-
ing liabilities and onerous contracts. It is
calculated as the sum of real return (Gross
Domestic Product growth rate), inflation,
and inflation premium for other risks.
Key accounting estimates
In the course of Ørsted Salg & Service A/S
operations, a number of commercial con-
tracts have been entered into with fixed
terms of contract that may result in the con-
tracts becoming onerous depending on mar-
ket developments, etc., and the obligations
incurred by the Ørsted Salg & Service A/S
as a result of these contracts may also be
subject to uncertainty. The judgements
concerning these complex contracts and
their future effects are subject to significant
uncertainties.
Decommissioning obligations comprise esti-
mated expenses related to decommissioning
and disposal of production assets. Estimates
of the obligations are based on expectations
of the future cost level, timing of decommis-
sioning and the structural risk-free interest
rate. The expectation for calculating the
provision may depend on future events
which are uncertain by nature.
44
Notes
Ørsted Salg & Service Annual report
2022
25� Provisions
Contract balances
DKKm 2022 2021
Contract liabilities
Non-current contract liabilities 4 4
Current contract liabilities 121 383
Total contract liabilities 125 387
DKKm 2022 2021
Change in inventories (362) (2,873)
Change in contract assets and liabilities (262) 204
Change in trade receivables (2,495) (7,062)
Change in current receivables from group (137) -
Change in other receivables 4,373 (7,543)
Change in trade payables 1,868 7,482
Change in other payables, etc� 109 5
Change in working capital 3,376 (9,787)
26. Contract liabilities
27. Change in working capital
Contract liabilities primarily relate to pre-
payments of gas and power contracts.
Accounting policies
We recognise a contract liability when
the invoicing on account and expected
losses exceed the transaction price of
the goods or services transferred to our
customer�
Accounting policies
Provisions are recognised when the follow-
ing criteria are fulfilled:
– We have a legal or constructive obliga-
tion as a result of an earlier event�
– The settlement of the obligation is
expected to result in an outflow of
resources�
– The obligation can be measured
reliably�
For onerous contracts, a provision is made
when the expected income to be derived
from a contract is lower than the unavoid-
able cost of meeting our obligations under
the contract�
Provisions concerning carbon emissions
are recognised when our actual emissions
exceed our holding of carbon emission
allowances�
Decommissioning obligations are meas-
ured at the present value of the future
liability in respect of decommissioning
as expected at the balance sheet date�
The present value of the provision is
recognised as part of the cost of property,
plant and equipment and depreciated
together with the associated asset�
The addition of interest on provisions
is recognised in the income statement
under financial expenses�
Continued
45
Notes
Ørsted Salg & Service Annual report
2022
26� Contract liabilities | 27� Change in working capital
28. Financial risks and risk management
Financial risks
Ørsted Salg & Service A/S is exposed to
several different financial risks, including
fluctuations in commodity prices, exchange
rates, credit risks, and interest rates. The
management of these risks is an important
focus area in the company.
Risk management is aimed at identifying
the various risk areas and determining
a strategy for managing them. A special
Risk Committee has been appointed who
is responsible for monitoring the Ørsted
Group’s risk management and risk control
relating to market and credit risks. A cen-
tralised group risk management function
has been set up in Ørsted to support the
Risk Committee.
Various strategies have been put in place
to manage the risks and align the risk
profile. The risk profile is managed through
the conclusion of financial and physical
contracts for commodities, interest, and
currencies over the next five years.
The operating profit may fluctuate consid-
erably from year to year because of price
developments.
Managing short-term market risks
Our focus is on actively managing the mar-
ket risks for the first five years. We primarily
hedge future prices using derivatives to
reduce cash flow fluctuations after tax.
Minimum hedging levels are currently deter-
mined by the Ørsted group Board of Direc-
tors. In the first year, price risks are almost
fully hedged. The degree of hedging declines
in subsequent years due to:
– reduced certainty about long-term
production volumes
– increasing hedging costs in the medium
to long term, both spread costs and
costs of collateral
– adverse impacts from collateral,
potentially tying up large amounts of
capital if hedging contracts become
unfavourable.
Market trading
When the Ørsted Group’s desired hedging
level has been determined, the exposures
are transferred to the market trading
function, which is part of Ørsted Salg &
Service A/S. Market Trading is responsible
for executing the physical and financial
transactions in the market. It is not always
possible to hedge the transferred price risks
in full. Therefore, Ørsted Salg & Service A/S
has some remaining exposure resulting from
these activities.
The market trading function also balances
the physical volumes in the market and, to
a lesser extent, engages in active position
Key accounting estimate
Valuation of long-term power purchase
agreements
When we measure our power purchase
agreements at fair value, we use estimates of
non-observable prices such as:
– production forecasts – intermittency (expected
profiled production versus constant (flat)
production)
– forecasted long-term power prices and
exchange rates
– forecasted inflation expectations
The development in market values is
monitored on a continuing basis and reported to
the Group Executive Team�
Hedge accounting
Hedge effectiveness is measured using fore-
casted production as well as estimates regarding
energy prices, intermittency, interest, currency
and inflation� For periods where we are close to
fully hedged, volume overhedging is possible if
the forecasted production does not materialize
which will lead to recognition of ineffectiveness�
Key accounting judgement
Valuation of long-term power purchase
agreements
We measure our power purchase agreements at
fair value, but they cannot always be measured
on quoted prices in active markets due to the
long duration of the contracts� We use elements
of judgements determining models to meas-
ure the fair value and we aim to limit the use of
subjective estimates and base the fair values on
external information including external pricing
and benchmark services�
Effectiveness of hedge relationship
Judgements are used to consider whether
forecasted transactions are highly probable
exposures as hedged item in a hedge relation-
ship, eg� expected production from wind farms,
and judgment is applied in whether the hedge
instruments applied in the hedge relationships
identified are effective�
taking to ensure an ongoing market pres-
ence and thus gain more detailed mar-
ket insights. Furthermore, Ørsted Salg &
Service A/S has assumed the role of market
maker in the Danish power market, which
entails further market risks.
Market risk policy
Our most significant market risks relate to:
– energy and commodity prices
– production variability
– foreign exchange rates
– interest rates and inflation.
46
Notes
Ørsted Salg & Service Annual report
2022
28� Financial risks and risk management
The overall objective of our risk manage-
ment is to:
– increase the predictability of the short-
term earnings and FFO/NIBD by securing
the price of energy and currency
– protect the long-term real value of ‘share-
holders’ investment in Ørsted by matching
fixed nominal cash flows from our assets
with fixed nominal debt.
New energy hedging framework
In light of recent high and volatile energy
prices, we no longer deem our previous
approach for hedging renewable power price
exposure fit-for-purpose. Going forward, we
will apply a new approach better suited
to the characteristics of our portfolio. The
new framework provides a better balance
between ensuring short-term financial sta-
bility and avoiding adverse impact from the
hedges, such as the risk of being overhedged
and large collateral postings due to negative
market values. With the new approach, we
have decided to reduce the hedge level and
horizon for renewable power price exposures
to a range of 0 % – 70 % in the current year
plus the next year. In addition, we will utilise
opportunities beyond this period to maximixe
value and support commercial initiatives.
Under our previous hedging framework, we
hedged the next five years with a staircase
model with minimum hedge levels of 90 %
in the coming year, gradually being reduced
each year. A transition period is required to
go from the previous risk mandate set-up
and into the new.
Managing long-term market risks
Beyond the period where we actively hedge,
our market risk picture is determined by our
portfolio of assets and long-term contracts.
We actively manage the long-term market
risk through the investment decisions we
take and contracts we enter into. Our power
exposure is partly mitigated through long-
term corporate power purchase agreements
(CPPAs), and we use debt to manage our
long-term currency, interest rate, and infla-
tion risks.
Commodity price risks
Our price risk arise from the purchase and
sale of power and gas. The price risks associ-
ated with the purchase and sale of gas result
from differences in the indexing of sales and
purchase prices. Our largest gas purchase
contracts include the option of renego tiating
the contract price if it no longer reflects market
conditions.
The price risks associated with power pur-
chases and sales are given by the difference
between the purchase and sales prices.
The price risks primarily relate to timing
differences between purchases, sales, and
the related hedges, and is therefore consid-
ered to be limited.
Currency risks
Currency risks arise primarily from:
– Purchase and sale of power and gas.
– Energy trading, which is typically priced
in currencies other than DKK.
Currency exposure is hedged using forward
exchange contracts, swaps, and options.
Interest rate risks
Interest rate risks primarily relate to loan
portfolio, cash, and financial hedging.
These risks are managed in relation to the
Ørsted Salg & Service A/S´s net financing
requirement and capital structure.
Interest rate risk is measured on a net basis,
and both debt and any placing of excess cash
are included. Interest rate risk is adjusted
through the interest terms attaching to the
Group’s loans.
Credit risks
Credit risks arise primarily from transacting
in power and gas – both wholesale, physical,
and financial transactions, including placing
surplus cash.
We conclude contracts with customers and
suppliers on the physical delivery of energy
products and hedging contracts with other
energy companies, specialised trading
houses and international banks. Physical
contracts with a term of more than one year
are normal, and gas purchase contracts can
have terms of more than five years. All such
contracts involve a risk of loss in the event of
a counterparty failing to perform its obliga-
tions. Such risks are quantified and managed
as credit risks and are a significant focus area
in Ørsted Salg & Service A/S.
Credit risk is managed based on internal
credit limits for counterparties and structured
monitoring of the actual exposure. Credit
limits are established based on an assess-
ment of the counterparty’s credit rating. If the
counterparty has an external credit rating, for
example from Moody’s or Standard & Poor’s,
this is an important factor in determining the
counterparty’s credit rating.
Credit risks are coordinated in relation to
all business activities, so that Ørsted Salg &
Service A/S does not assume inappropriately
large exposures to individual counterparties.
With a view to reducing its credit exposure,
the company endeavours, as far as possible,
to clear transactions via a clearing centre,
such as Nord Pool, and uses formalised
framework agreements, such as ISDA and
EFET agreements and master netting agree-
ments. To this should be added the limited use
of security, such as bank guarantees.
As part of its risk management, the Group
monitors its credit exposure in relation to
all trading counterparties daily as well as
monthly or quarterly in the case of other
counterparties. Historically, losses due to
default by counterparties have been small.
Financing and capital resources
One of the main financial management
responsibilities is to secure sufficient, flexible
financial resources for the day-to-day
operations and for the implementation of
Ørsted Salg & Service’s strategy, consider-
ing the Ørsted Group’s rating. To this end,
internal management objectives have been
established for the required level of financial
resources, taking into account factors such
as investment programme, operating cash
flow, and debt maturity profile.
47
Notes
Ørsted Salg & Service Annual report
2022
28� Financial risks and risk management
Sensitivity analysis
The sensitivity analysis in the tabel shows
the effect of market value changes assum-
ing a relative price change at 31 December.
The illustrated effect on profit (loss) com-
prises financial instruments that remained
open at the balance sheet date and have an
effect on profits in the financial year in ques-
tion. Besides derivative financial instruments
on commodities and currency, financial
instruments in this context include receiva-
bles and payables in foreign currencies.
It should be noted that the illustrated
sensitivities only comprise Ørsted Salg &
Service A/S’s financial instruments and
therefore exclude the effect from contracts
concluded under which physical delivery of
the underlying assets is made, as these are
not recognised as financial instruments in
accordance with IFRS 9. Thus, the sensitivity
only comprises the derivative financial
instruments and not the physical contracts
they hedge.
Estimated effect on profit (loss)
The illustrated effect on profit (loss) is the
effect from financial instruments that
remained open at the balance sheet date
and have an effect on profit (loss) in the
financial year in question. Besides derivative
financial instruments on commodities and
currencies, financial instruments in this
context include receivables and payables
in foreign currencies. It should be noted
that the shown sensitivities only comprise
the company’s financial instruments and
consequently are not representative of
the company’s total risk profile in relation
to commodity prices and exchange rates.
Furthermore, the sensitivities only reflect the
effect of changes at the balance sheet date
and not for an entire accounting period.
Estimated effect on equity
The illustrated effect on equity on page
47 is the effect from financial instruments
that remained open at the balance sheet
date and affect equity at the balance sheet
date, excluding instruments that affect the
income statement. Here, financial instru-
ments include derivative financial instru-
ments on commodities and currency, which
are accounted for as hedges of cash flows.
Sensitivity Analysis
Risks
DKKm Price change
Estimated effect on profit
(loss) 31 December
Estimated effect on equity
31 December
2022 2021 2022 2021
Oil +25 % 43 21 4 3
-25 % (42) (21) (4) (3)
Gas +25 % (944) (1,230) (218) (469)
-25 % 964 1,206 218 469
Power +25 % (2,329) (1,634) (2,864) (2,111)
-25 % 2,427 1,737 2,864 2,111
Carbon emission allowances +25 % (25) (128) - -
-25 % 25 128 - -
USD +10 % (103) 33 - (1)
-10 % 103 (33) - 1
GBP +10 % (1,030) (98) (71) (337)
-10 % 1,030 98 71 337
SEK +10 % (1) 40 - -
-10 % 1 (40) - -
EUR +1 % 248 115 (8) -
-1 % (248) (115) 8 -
Credit quality of counterparties
DKKm 2022 2021
AA 6 -
A 221 4
BBB
1
7,245 647
B 2 -
Other
2
11,532 8,602
Total credit exposure 19,007 9,253
1
In 2022 DKK 5,990 million (2021: 0 DKK) is related to Ørsted A/S and the
Inhouse Clearing Bank�
2
DKK 5,761 million (2021: DKK 5,337 million) is related to group companies
which are not individually rated�
48
Notes
Ørsted Salg & Service Annual report
2022
28� Financial risks and risk management
29. Contingent liabilities and other liabilities
At year-end, Ørsted Salg & Services A/S
had the following contingent and other
liabilities:
Indemnities
The company is taxed jointly with other com-
panies in the Ørsted Group. The companies
have unlimited as well as joint and several
liability together with the other taxed com-
panies for Danish income taxes and withhold-
ing taxes on dividends, interest, and royalties
within the jointly taxed companies.
Ørsted A/S is the management company.
Reference is made to the Ørsted Group’s
annual report 2022.
Liability to pay compensation
(absolute liability)
According to legislation, Ørsted Salg &
Service A/S is liable in tort for any damage
caused by the companies’ gas activities
even where there is no proof of negligence
(absolute liability). The usual insurance has
been taken out to cover any such claims.
Litigation
The company is party to a number of litiga-
tion proceedings and legal disputes that are
not estimated to have any material effect
on the financial position, neither individually
nor collectively.
The outcome of litigation proceedings and
legal disputes is based on the expeceted
legal assessment, which is updated quar-
terly. The expectations may depend on
future events which are uncertain by nature.
49
Notes
Ørsted Salg & Service Annual report
2022
29� Contingent liabilities and other liabilities
30. Related-party transactions
Related parties with a controlling interest
is Ørsted A/S and the Danish state , repre-
sented by the Danish Ministry of Finance,
which has a majority holding in the parent
company Ørsted A/S.
Related parties with significant influence
include the companies’ boards of directors,
executive boards, executive employees, and
members of their families. Related parties
also comprise companies in which the
persons referred to above have significant
influence and group enterprises and associ-
ates in the Ørsted Group.
As part of its ordinary operations, Ørsted
Salg & Service A/S sells to and buys its prod-
ucts from related parties on market terms.
The company was involved in the follow-
ing transactions with related parties in the
financial year under review.
Ørsted Salg & Service A/S uses the exception
set out in IAS 24.25 concerning entities in
which the state is a related party, and trans-
actions with state enterprises are therefore
not disclosed.
Specific transactions
The company has had transactions with
group enterprises as part of its responsibility
for the trading function for the Ørsted Group’s
companies in relation to commodity instru-
ments, etc. Furthermore, balances with group
enterprises have been established as part of
the normal financing of the Group’s activities.
Remuneration of the Board of Directors
and the Executive Board is disclosed in note
5 ‘Employee costs’ and note 6 ‘Share-based
payment’.
DKKm
Ørsted A/S Subsidiaries Group enterprises Joint ventures and associates
2022 2021 2022 2021 2022 2021 2022 2021
Sale of goods and services 12 8 4,391 6,664 16,806 5,092 - -
Purchase of goods and services - - (3) (121) (31,100) (16,615) (220) (165)
Interest, net (126) (9) - - - - - -
Dividends - - 65 - - - - -
Receivables 6,209 223 2,800 4,355 32,643 28,088 - -
Payables 334 (4,857) 2,697 (6,512) 10,479 (9,052) 18 (17)
50
Notes
Ørsted Salg & Service Annual report
2022
30� Related-party transactions
31. Calculation of financial ratios
Unless otherwise stated, financial ratios
have been calculated in accordance
with ‘Recommendations & Financial
Ratios’ published by the Danish Society
of Financial Analysts.
Financial ratios have been calculated
as follows:
EBITDA margin
Earnings before interest, tax, depreciation, and amortisation
Revenue
EBIT margin (profit margin)
Earnings before interest and tax
Revenue
Net interest-bearing debt Interest-bearing liabilities - interest-bearing assets
1
Capital employed
Equity plus/minus gains/losses relating to hedging instruments on equity
+ net interest-bearing debt
2
1 Bank overdrafts that are included in the statement of cash flows as cash
and cash equivalents are included as negative interest-bearing assets�
2 The definition deviates from ‘Recommendations & Financial Ratios 2015’
published by the Danish Society of Financial Analysts�
51
Notes
Ørsted Salg & Service Annual report
2022
31� Calculation of financial ratios
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