Interim financial report
First half year 2021
2/43
Interim financial report
First half year 2021
Management’s review
Overview
CEO’s review 3
At a glance 7
Outlook 8
Results Q2 9
Business units’ results 14
Performance highlights 20
Quarterly overview 21
Results H1 11
Financial statements
Consolidated financial statements
Consolidated statements of Income H1 23
Consolidated statements of Income Q2 24
Consolidated balance sheet 25
Consolidated statement of shareholders equity 26
Consolidated statement of cash flows 27
Notes
1. Basis of reporting 28
2. Business performance 29
3. Segment information 30
4. Revenue 33
5. Other operating income and expenses 35
6. Financial income and expenses 35
7. Acquisition of enterprises 36
8. Gross and net investments 37
9. Reserves 37
10. Tax on profit (loss) for the period 38
11. Market risks 39
12. Fair value measurement 40
13. Interest-bearing debt and FFO 41
Management statement
Statement by the Executive Board and the
Board of Directors
42
Forward-looking statements 43
Contents
Earnings call
In connection with the presentation of the interim
financial report an earnings call for investors and
analysts will be held on Thursday, 12 August 2021
at 14:00 CEST:
Denmark: +45 78 15 01 09
International: +44 333 300 9268
USA: +1 833 823 0590
The earnings call can be followed live here:
https://edge.media-server.com/mmc/p/vps2auvq
Presentation slides will be available prior to the
earnings call and can be downloaded here:
orsted.com/financial-reports
Further information
Group Communication
Martin Barlebo
Tel.: +45 99 55 95 52
Investor Relations
Allan Bødskov Andersen
Tel.: +45 99 55 79 96
3/43
Management’s review
Interim financial report First half year 2021
billion to reflect the acquisition of Brookfield
Renewable Ireland (BRI) in June and the ex-
pected acquisition of the fully constructed
302 MW onshore wind project Lincoln Land in
the US later this year.
Our green share of heat and power generation
amounted to 89 % in H1 2021, up 1 percentage
point relative to the same period last year. The
development was primarily due to more wind
farms in operation, partly offset by lower wind
speeds and increased thermal generation of
heat and power driven by higher heat demand
and regulatory obligations to make all our
energy capacities available to the market.
Construction and operational progress
We are currently constructing two of the
largest offshore wind farms in the world,
Hornsea 2 and Greater Changhua 1 & 2a, which
are both on track to be commissioned in 2022.
On 27 May, we reached a significant milestone
when we installed the first offshore wind
turbine at our 1.3 GW wind farm Hornsea 2 off
the coast of the UK. With 50 out of 165 wind
turbines currently installed at the site, we now
have more than 1,000 offshore wind turbines in
UK waters. When commissioned in H1 2022,
Hornsea 2 will become the world’s largest
offshore wind farm, exceeding our own
Hornsea 1.
In Taiwan, construction of Greater Changhua 1
& 2a is progressing according to plan within
both time and budget, but the continued
Financials
Our operating profit (EBITDA) for the first half
of the year amounted to DKK 13.1 billion, a
DKK 3.3 billion increase compared to the same
period last year. The increase was mainly due
to a contribution from new partnerships from
the gain of the 50 % farm-down of Borssele 1 &
2 in May, which amounted to DKK 5.4 billion.
In the first half of 2021, we experienced signifi-
cantly lower wind speeds than normal, espe-
cially across our offshore portfolio. Conse-
quently, earnings from offshore and onshore
wind farms in operation amounted to DKK 7.9
billion, a decrease of DKK 0.3 billion compared
to H1 2020 despite ramp-up of generation
from new operating assets and the addition of
CfDs for the last 400 MW of capacity from
Hornsea 1. We obtained solid availability rates
during the first half. We also saw exceptionally
good performance by our CHP plants and high
earnings from our gas business.
We maintain our full-year EBITDA guidance of
DKK 15-16 billion, but currently expect an
outcome in the low end of the guided range. In
line with previous years, our EBITDA guidance
does not include earnings from new partner-
ships during the year, which means that the
gain from the Borssele 1 & 2 farm-down and
the farm-down of Greater Changhua 1 ex-
pected in Q3 is excluded from our full-year
guidance.
We increase our full-year gross investment
guidance from DKK 32-34 billion to DKK 39-41
CEO’s review
Strong strategic progress in first half with a major US offshore
wind project awarded, new partnerships, updated strategic
ambitions, and long-term financial guidance.
Full-year EBITDA guidance maintained despite low wind speeds.
Highlights
Financials
Operating profit (EBITDA) increased by
DKK 3.3 billon compared to the same period
last year, amounting to DKK 13.1 billion, in-
cluding a DKK 5.4 billion gain from the farm-
down of Borssele 1 & 2.
Earnings from offshore and onshore wind
farms in operation amounted to DKK 7.9
billion, a decrease of DKK 0.3 billion com-
pared to the same period last year due to
significantly lower wind speeds.
We reiterate our EBITDA guidance, excluding
new partnerships, of DKK 15-16 billion and
increase our expected gross investments to
DKK 39-41 billion.
Our green share of heat and power genera-
tion amounted to 89 %.
Construction and operational progress
Installed the first wind turbines at our 1.3 GW
offshore wind farm Hornsea 2.
Commissioned Permian Energy Center in
Texas, our first combined solar PV and stor-
age facility.
Commissioned Western Trail Wind Farm in
Texas.
Business development
Ocean Wind 2 awarded 1,148 MW offshore
wind contract in New Jersey, fully utilising our
Ocean Wind lease area.
Closed the agreement to enter into a 50/50
joint venture with PGE for the Baltica 2 & 3
projects in Poland.
Closed the agreement to acquire Brookfield
Renewable Ireland, a European onshore wind
platform.
Closed the agreement with Norges Bank
Investment Management to farm down 50 %
of the 752 MW offshore wind farm Borssele 1
& 2.
Management’s review
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Interim financial report
First half year 2021
Business development
Offshore
Our portfolio of US offshore development
projects is moving ahead. On 30 June, the New
Jersey Board of Public Utilities selected our
Ocean Wind 2 project for a 20-year offshore
wind renewable energy certificate (OREC) for
an offshore wind farm with a capacity of 1,148
MW. The 2029 OREC price is USD 84.03 per
MWh, with a 2 % annual escalator. With
Ocean Wind 1 and 2, we will deliver more than
2,200 MW of offshore energy to the state of
New Jersey. We have now been awarded
offshore wind projects totalling over 4 GW in
the US, more than any other developer, which
unlocks significant synergies in procurement,
construction, and operation.
We are further looking to expand our offshore
footprint in the US by submitting a bid to the
Maryland Public Service Commission to devel-
op Skipjack Wind 2, with a proposed capacity
of up to 760 MW. We are currently developing
the 120 MW Skipjack Wind 1 off the Maryland-
Delaware coast, which is expected to be
commissioned in 2026.
In the US, we have seen various indications of
momentum on both the federal and state
levels and therefore, we remain confident that
three of our largest US projects: Ocean Wind 1,
Revolution Wind, and Sunrise Wind are on
track to be commissioned before the end of
2025. Both Ocean Wind 1 and Revolution Wind
have received their notices of intent (NOIs),
and Sunrise Wind’s notice of intent is expected
in Q3 this year.
The 50/50 joint venture agreement with PGE
to develop, build, operate, and own the two
Polish offshore wind farms Baltica 2 & 3 with a
dynamic COVID-19 restrictions in Taiwan could
potentially impact the construction timeline.
When commissioned, the 900 MW wind farm
will be the largest offshore wind farm in APAC
and will supply 1 million Taiwanese households
with renewable energy.
The array cable issue we discovered earlier this
year on several offshore wind farms across the
UK and Continental Europe led us to include a
warranty provision of DKK 0.8 billion in Q1 2021
to cover potential costs towards partners. Our
assessments are unchanged since the publica-
tion of the Q1 2021 report and still point to a
total financial impact of around DKK 3 billion
across 2021 to 2023 with approx. one third
expected to be capitalised.
In May, we commissioned our first large-scale
combined solar PV and storage facility, Permi-
an Energy Center, in Texas. The renewable
power facility consists of a 420 MW
ac
solar PV
farm and a 40 MW
ac
energy storage facility
and showcases our ability to build and develop
large-scale solar PV assets. Additionally, in
August, we commissioned our greenfield wind
project Western Trail in Texas. With a genera-
tion capacity of 367 MW, Western Trail is our
largest onshore wind asset in operation. Earlier
this year, we signed PPAs with PepsiCo, Hormel
foods, and Nucor to offtake renewable power
from the wind farm, which entails an attractive
incremental source of stable earnings. We are
currently constructing Muscle Shoals, Hay-
stack, Old 300, and Helena Energy Center in
the US, which are all on track to be commis-
sioned during H2 2021 or 2022, and Kennox-
head 1 in Scotland, which is expected to enter
commercial operation in 2022.
On 30 June, the New Jersey Board of Public Utilities
selected Ørsted’s Ocean Wind 2 project to negotiate a
20-year offshore wind renewable energy certificate (OREC)
for an offshore wind farm with a capacity of 1,148 MW.
”
Capital Markets Day 2021
On 2 June 2021, we presented our updated strategic ambitions and new financial guidance. To
continue to lead in the global green energy transformation and realise our full potential as a
global green energy major, we will accelerate our global build-out of renewable energy and
have set an ambition to reach approx. 50 GW of installed renewable capacity by 2030. To sup-
port this ambitious build-out, our planned gross investments from 2020 to 2027 will be approx.
DKK 350 billion, of which approx. 80 % is expected to be within Offshore (incl. renewable hydro-
gen), and approx. 20 % within Onshore. Net of the expected proceeds from farm-downs, invest-
ments are expected to be approx. DKK 200 billion.
In the period 2020-2027, we expect a growth in operating profit (EBITDA) from offshore and
onshore assets in operation of approx. 12 % a year on average, reaching a level of DKK 35-40
billion in 2027. The growth rate assumes a 50 % ownership stake in new offshore projects. Po-
tential farm-down gains will come on top of the operational EBITDA CAGR.
We aspire to be a globally recognised sustainability leader and to accelerate our efforts to
operate our company in an even more sustainable way. Therefore, we have set the ambition
that by 2030 all new projects commissioned must have a net-positive biodiversity impact, fully
supporting that the transformation to green energy must take place in a sustainable way and in
harmony with nature. Furthermore, we commit to either reuse, recycle, or recover all of the wind
turbine blades in our global portfolio upon decommissioning .
Read more about our ambitions and guidance metrics in the material from the Capital Markets
Day: https://orsted.com/en/capital-markets-day-2021
Management’s review
5/43
Interim financial report
First half year 2021
Implementation of the EU Taxonomy
As part of the European Green Deal to become the first climate-neutral continent by 2050, the
EU Commission has established the EU Taxonomy as an important enabler to scale up sustaina-
ble investments. The taxonomy is a catalogue of environmentally sustainable economic activi-
ties, each with criteria to determine if they substantially contribute towards a sustainable econ-
omy. In June, the Commission adopted the Climate Delegated Act for the first two out of six
environmental objectives of the Taxonomy Regulation, namely climate change mitigation and
climate change adaptation, with the remaining four expected during 2022.
At Ørsted, we want to be a catalyst for change, and are committed to taking a leading role in
the global green energy transformation. We therefore welcome the new reporting framework.
During the year, we assessed whether our activities can be identified in the taxonomy and there-
by be classified as taxonomy-eligible. Subject to fulfilling certain criteria on substantially con-
tributing to at least one environmental objective, doing no significant harm (DNSH) to the other
total installed capacity of up to 2.5 GW has
been closed. This follows the good news of
the projects being awarded contracts for
difference (CfDs) earlier this year. Poland has
set an ambitious renewable build-out target,
and this partnership with PGE cements our
position in a growing market and is an im-
portant milestone in our ambition for Conti-
nental Europe.
In Japan, we have submitted three bids in the
country’s first-ever auction for bottom-fixed
offshore wind projects. One bid is with our
partner TEPCO in the Choshi lease zone
located off the east coast of the Chiba
prefecture. The two other bids are with our
partners JWD and Eurus Energy for projects
located off the west coast of the Akita
prefecture. We are very excited to be part of
the first offshore auction in Japan, which has
an ambition to become one of the world’s
largest markets for offshore wind with an up
to 45 GW target in 2040. The winners of the
first auction are expected to be announced at
the end of this year, and the Japanese gov-
ernment plans to host yearly auction rounds
going forward.
We have closed the agreement with Norges
Bank Investment Management (NBIM) to
farm down 50 % of our 752 MW Dutch
offshore wind farm Borssele 1 & 2. The total
value of the transaction amounted to ap-
prox. DKK 10.2 billion and marks NBIM’s first
investment in unlisted renewable energy
infrastructure. As part of the agreement, we
will provide O&M and energy balancing
services.
Since the publication of our Q1 2021 report,
Ørsted has entered into several new and
strategic partnerships.
In the UK, we entered into a joint venture
agreement with BlueFloat Energy and Falck
Renewables to join two large-scale floating
wind bids in Scotland. The joint venture
company is owned on an equal ownership
basis and demonstrates Ørsted’s commitment
to floating wind. We have also submitted bids
alone for bottom-fixed offshore wind project
rights in the Scotwind leasing round. With
decades of experience in the UK and overseas,
we can help maximise the full offshore wind
potential in Scotland.
In Norway, we joined forces with Fred. Olsen
Renewables and Hafslund Eco to participate
in Norway’s upcoming application round for
offshore seabed leases. The Norwegian
government has appointed two lease areas
with a potential capacity of up to 4.5 GW
across the two areas, and the consortium will
be applying for seabed leases in both areas
with the aim of delivering both bottom-fixed
and floating offshore wind power.
In Korea, we signed an MoU with POSCO
Group to support the development of our
1.6 GW offshore wind projects off the coast of
Incheon City, and conduct feasibility studies
on a potential collaboration on renewable
hydrogen.
In Denmark, we started construction of our first
renewable hydrogen project, H2RES. The
project will have a capacity of 2 MW and will
be used to investigate how best to combine
efficient electrolyser facilities with fluctuating
power supply from offshore wind, using our
two 3.6 MW offshore wind turbines at Avedøre
Holme.
Furthermore, we entered into an agreement
with HOFOR to source renewable power for
the next phases of the Green Fuels for Den-
mark project from their 250 MW offshore wind
farm Aflandshage which is expected to deliver
first power in 2024/2025. Green Fuels for
Denmark is uniting some of the strongest
partners in the Danish transport and energy
sector to fulfil Denmark’s ambitious vision for a
large-scale production of renewable hydrogen
and fuels. The project has a potential capacity
of 1.3 GW, abating up to 850,000 tonnes of
carbon emissions.
environmental objectives, and complying with minimum social safeguards, the activities will be
classified as taxonomy-aligned. Although the upcoming EU requirements for reporting on taxon-
omy-eligible activities do not come into force until 2022, we have decided to disclose approxi-
mate levels for our taxonomy-eligible share of revenue, EBITDA, and gross investments in our H1
2021 report (read more in our ESG performance report: https://orsted.com/esg-2021-h1). We plan
to complete the criteria screening before year-end and thus to report on taxonomy-aligned
shares in our annual reports, one year ahead of requirements.
The taxonomy-eligible share of revenue was above 65 %, whereas the shares of our EBITDA and
gross investments was above 95 % and 99 % respectively, in H1 2021. The non-eligible part of
our revenue primarily concerned our long-term legacy activities related to sourcing and sale of
gas (17 % of revenue in H1 2021), Danish CHP plants, where fossil fuels still account for approx. a
quarter of the fuels used, and sale of power to end-users (activity currently not covered by the
taxonomy). We expect the share of taxonomy-eligible revenue to increase in the coming years.
Management’s review
6/43
Interim financial report
First half year 2021
Mads Nipper
Group President and CEO
Onshore
In June, we completed the acquisition of the
onshore renewable energy platform
Brookfield Renewable Ireland (BRI). The
acquisition marks our entry into the European
onshore market with a portfolio of 327 MW in
operation, 62 MW under construction,
149 MW of advanced development projects,
and more than 1 GW of projects under devel-
opment. Integration of key systems is under-
way, and we are now looking ahead at new
opportunities as a transatlantic onshore
renewable energy developer.
In May, we entered into an agreement to
acquire the 302 MW US wind project Lincoln
Land, which is expected to be operational by
the end of 2021. The wind farm resides in the
Midwest Independent System Operator
(MISO) area and will thereby expand our
footprint in the US energy market.
In the US, we signed three new PPAs in Q2
2021. One with North Iowa Municipal Electric
Cooperative Association (NIMECA) to pur-
chase power from our 103 MW wind farm
Willow Creek in South Dakota. The PPA helps
NIMECA diversify their energy supply. The
second, is with Microsoft Corporation to
purchase power from our 430 MW
ac
solar PV
farm Old 300 Solar Center in Texas. The third
is with Royal DSM to purchase electricity
from one of our solar projects we are devel-
oping in Texas. These adds to our list of six
other PPAs signed this year, which underpins
the commercial value of our onshore renewa-
ble assets in the US.
Employees
On 1 June, Richard Hunter joined Ørsted as our
new Chief Operating Officer (COO). Richard
has a long career as an executive and exten-
sive experience within engineering, manufac-
turing, and operations, and is thus well-suited
to continue the development of our EPC &
Operations activities. We are excited to have
Richard on board on our journey to sustain
our position as the world’s leading energy
major.
We recently announced that Declan Flana-
gan decided to resign from the company.
Twelve years after founding Lincoln Clean
Energy and three years after Ørsted’s acquisi-
tion. We have initiated the process of recruit-
ing the next CEO of Onshore and effective
immediately, Neil O’Donovan, our COO of
Onshore, has been appointed interim CEO of
Onshore.
More than 16 months into the COVID-19
pandemic, our Corporate Crisis Management
Organisation (CCMO) has continued to meet
regularly, focusing on the health and safety
of our employees, and ensuring business
continuity. Although the pandemic is not yet
over, management and the HR department
are well into considerations on how to create
a flexible workplace of the future, employing
the learnings we have obtained from the
recent period’s way of working.
We strongly believe in the value of a diverse
organisation. We aspire to create an environ-
ment where everyone can thrive, perform,
and grow. With the launch of Ørsted’s Inclu-
sion Networks, we promote and support
diversity and inclusion of all minority groups.
7/43
Management’s review
Interim financial report First half year 2021
Ørsted
EBITDA
1
Last 12 months
Key figures H1 2021
Revenue DKK 32.5 bn
Gross investments DKK 18.8 bn
Capital employed DKK 109.0 bn
TRIR
3.1
Number of employees 6,472
ROCE
1
12.5 %
Offshore
Onshore
Bioenergy & Other
EBITDA
EBITDA
EBITDA
Key figures H1 2021
Revenue DKK 22.2 bn
Gross investments DKK 10.4 bn
Capital employed DKK 87.9 bn
TRIR
3.1
Number of employees 3,250
Key figures H1 2021
Revenue DKK 0.2 bn
Gross investments DKK 8.3 bn
Capital employed DKK 18.0 bn
TRIR
6.3
Number of employees 220
Key figures H1 2021
Revenue DKK 12.6 bn
Gross investments DKK 0.1 bn
Capital employed DKK 1.7 bn
TRIR
2.5
Number of employees 971
Wind speed and availability, m/s, %
2020 2021
Wind speed and availability, m/s, %
2020 2021
Green share of heat and power
generation, %
Green share of heat and power
generation, %
7.8
96
7.5
95
Wind speed Availability
71
76
2020 2021
DKK 0.4 bn
DKK 0.5 bn
2020
2021
DKK 1.1 bn
DKK 1.1 bn
2020
2021
At a glance
88
89
2020 2021
10.4
93
9.2
94
Wind speed Availability
2020
2021
DKK 8.2 bn
DKK 7.9 bn
DKK 9.8 bn
DKK 13.1 bn
From operating wind farms and solar PV
2020
2021
DKK 7.3 bn
DKK 8.0 bn
DKK 11.5 bn
DKK 7.5 bn
From operating wind farms
8/43
Management’s review
Interim financial report First half year 2021
EBITDA
EBITDA in 2021, excluding new partnership
agreements, is expected to be DKK 15-16 bil-
lion, which is unchanged relative to the guid-
ance in our annual report for 2020 and interim
report for Q1 2021. We now expect an out-
come in the low end of the guided range main-
ly due to very low wind speeds in June and
July. This guidance is based on an assumption
of normal wind speeds for the last five months.
Our directional guidance for Offshore has
changed from ‘lower’ to ‘significantly lower’,
mainly due to the significantly lower than nor-
mal wind speeds across our entire offshore
wind portfolio (approx. DKK -1.4 billion impact
versus a normal year up until the end of July)
and the DKK 0.8 billion warranty provision
towards our partners related to cable protec-
tion system issues at some of our wind farms.
Our directional guidance for Bioenergy & Oth-
er has changed from ‘lower’ to ‘higher’, mainly
due to higher earnings from our CHP plants
caused by higher power prices together with
higher heat demand and sale of ancillary ser-
vices. Furthermore, the increasing gas prices
have a positive impact on earnings from reval-
uation of gas at storage.
The directional guidance for Onshore is
‘Higher’, which is unchanged relative to the
guidance in the annual report for 2020.
Gross investments
Gross investments in 2021 are expected to
increase from DKK 32-34 billion to DKK 39-41
billion due to the acquisition of Brookfield
Renewable Ireland in June and the expected
acquisition of the fully constructed 302 MW
onshore wind project Lincoln Land in the US
later this year.
Our EBITDA guidance for the Group is the prevailing guidance, whereas the directional earnings development
per business unit serves as a means to support this. Higher/lower indicates the direction of the business unit's
earnings relative to the results for 2020 excl. RBC.
1
Business performance principle. From 2021, we are reporting according to IFRS (see more on page 11).
2
Excluding the Danish power distribution, residential customer, and city light businesses (RBC).
3
Excluding new partnerships, relative to 2020, excluding RBC.
Outlook 2021, DKK billion
2020
realised
1
Guidance
3 Feb 2021
3
Guidance
29 Apr 2021
3
Guidance
12 Aug 2021
3
EBITDA 18.1
15-16 15-16
15-16
Offshore 14.8
Lower Lower
Significantly
lower
Onshore 1.1 Higher Higher Higher
Bioenergy & Other 2.1 Lower Lower Higher
Gross investments 27.0 32-34 32-34 39-41
2020 realised,
excl. RBC
1,2
17.2
14.8
1.1
1.2
Outlook 2021
Hornsea 2, off the
Yorkshire coast, UK
9/43
Management’s review
Interim financial report First half year 2021
EBITDA
Operating profit (EBITDA) totalled DKK 8.2
billion compared to DKK 3.0 billion in Q2 2020.
The increase of DKK 5.2 billion was mainly
related to the 50 % farm-down of Borssele 1 &
2 which resulted in a gain from new partner-
ships of DKK 5.4 billion, but was also due to
good performance at our CHP plants and a
positive effect from our gas business due to
increasing gas prices. This was partly offset by
the divestment of our distribution, residential
customer, and city light (RBC) businesses,
which contributed DKK 0.3 billion to EBITDA in
Q2 2020, and lower earnings from our operat-
ing wind assets.
Earnings from offshore and onshore wind farms
in operation were DKK 0.3 billion lower than in
the same period last year and amounted to
DKK 2.7 billion. Ramp-up of generation from
Borssele 1 & 2, Plum Creek, Willow Creek, and
Permian Energy Center combined with the
addition of the last 400 MW of Hornsea 1 re-
ceiving CfDs in April and a positive effect from
ceasing to report according to the business
performance principle in 2021 contributed posi-
tively to our site earnings. However, this was
more than offset by significantly lower wind
speeds across especially our offshore portfolio
(approx. DKK -0.7 billion compared to Q2 2020
and approx. DKK -0.9 billion compared to a
normal wind year), higher TNUoS tariffs follow-
ing the divestment of the offshore transmission
asset at Walney Extension in mid-2020 and
Hornsea 1 in Q1 2021, and lastly lower earnings
from Horns Rev 2 due to the subsidy period
ending in October 2020.
EBITDA from our CHP plants more than dou-
bled relative to the same period last year
and amounted to DKK 0.4 billion. The in-
crease was mainly due to higher realised
power prices together with higher sales of
ancillary services.
Financial income and expenses
Net financial income and expenses amounted
to DKK -0.5 billion in Q2 2021 compared to
DKK -1.0 billion in Q2 2020. The lower net
expenses were mainly due to Q2 2020 being
adversely impacted by interest related to
potential tax payments and a loss on interest
rate swaps in connection with the termina-
tion of local project financing and related
swaps in the US, and from generally lower
net interest expenses in Q2 2021 due to lower
net debt.
Tax and tax rate
Tax on profit for the period amounted to
DKK 0.2 billion in Q2 2021 compared to DKK
0.9 billion in Q2 2020. The effective tax rate
in Q2 2021 was 3 % and was significantly
impacted by the tax-exempt gain of DKK 5.4
billion from the 50 % farm-down of Borssele 1
& 2. Tax for Q2 2021 was further positively
impacted by DKK 0.9 billion regarding uncer-
tain tax positions (UTP) due to updated man-
agement assessments and the increase of
the UK tax rate from 19 % to 25 % from 2023.
This was partly offset by the recognition of
deferred taxes related to an initial tax equity
contribution for Permian Energy Center and
our US offshore portfolio.
Results Q2
Profit for the period
Profit for the period totalled DKK 5.5 billion,
DKK 6.4 billion higher than in Q2 2020. The
increase was primarily due to the gain from
the 50 % farm-down of Borssele 1 & 2, and
from lower net financial expenses and tax
expenses.
Cash flows from operating activities
Cash flows from operating activities totalled
DKK 3.1 billion in Q2 2021 compared to DKK
8.2 billion in Q2 2020. The decrease of DKK
5.1 billion was mainly driven by lower EBITDA
(excluding the farm-down of Borssele 1 & 2,
where the cash flow is included in the divest-
ment cash flow), and that Q2 2020 was posi-
tively impacted by the divestment of the
offshore transmission asset at Walney Exten-
sion. Furthermore, we received two large tax
equity contributions in Q2 2020 for the on-
Financial results, DKKm Q2 2021 Q2 2020 %
Revenue
13,553 11,625 17 %
EBITDA
8,196 2,956 177 %
Depreciation and amortisation
(1,959) (1,827) 7 %
Operating profit (loss) (EBIT)
6,237 1,129 452 %
Gain (loss) on divestment of enterprises
(72) (3) n.a.
Financial items, net
(466) (1,010) (54 %)
Profit before tax
5,698 119 n.a.
Tax on profit (loss) for the period
(154) (928) (83 %)
Tax rate
3 % 780 % (777 %p)
Profit (loss) for the period
5,544 (825) n.a.
shore wind farms Sage Draw and Plum Creek,
where we only received an initial tax equity
contributions for Permian Energy Center in
Q2 2021. Finally, Q2 2021 saw more funds tied
up in other net working capital due to in-
creasing trade receivables during Q2 2021
versus decreasing trade receivables during
Q2 2020.
Investments and divestments
Gross investments amounted to DKK 12.1
billion against DKK 3.8 billion in Q2 2020. The
main investments in Q2 2021 were:
– offshore wind farms (DKK 5.8 billion),
including Greater Changhua 1 & 2a in
Taiwan, Hornsea 2 in the UK, Ocean
Wind 1 in the US, and payments re-
garding Baltica 2 & 3 in Poland
through the 50/50 joint venture with
PGE.
Management’s review
10/43
Interim financial report
First half year 2021
Cash flow and net debt, DKKm Q2 2021 Q2 2020 %
Cash flows from operating activities
3,147 8,197 (62 %)
EBITDA
8,196 2,956 177 %
Change in derivatives
336 680 (51 %)
Change in provisions
15 (349) n.a.
Reversal of gain (loss) on divestments of assets
(5,458) (71) n.a.
Other items
15 (43) n.a.
Interest expense, net
(382) (634) (40 %)
Paid tax
(313) (86) 264 %
Change in work in progress
(857) (177) 384 %
Change in tax equity partner liabilities
866 3,017 (71 %)
Change in other working capital
729 2,904 (75 %)
Gross investments
(12,133) (3,757) 223 %
Divestments
10,591 45 n.a.
Free cash flow
1,605 4,485 (64 %)
Net debt, beginning of period
13,190 27,084 (51 %)
Free cash flow from continuing operations
(1,605) (4,485) (64 %)
Free cash flow from discontinued operations
- (102) n.a.
Dividends and hybrid coupon paid
172 378 (54 %)
Addition of lease obligations
194 138 41 %
Exchange rate adjustments, etc.
116 (752) n.a.
Net debt, end of period
12,067 22,272 (46 %)
– onshore wind and solar PV farms (DKK
6.3 billion), including the acquisition of
Brookfield Renewable Ireland, and the
construction of Permian Energy Cen-
ter, Old 300, Muscle Shoals, Western
Trail, Helena Energy Center, Hay-
stack, and Kennoxhead 1.
Divestments amounted to DKK 10.6 billion in
Q2 2021 and were mainly related to the 50 %
farm-down of Borssele 1 & 2 with proceeds
(NIBD impact) of DKK 9.3 billion. Furthermore,
proceeds from the divestment of a 25 % own-
ership interest in Ocean Wind 1 to New Jer-
sey’s Public Service Enterprise Group (PSEG)
and final settlement with Global Infrastruc-
ture Partners (GIP) regarding Hornsea 1 were
included in divestments.
The installation of the 16th turbine
at Hornsea 2 which also marked
Ørsted’s 1,000th offshore wind
turbine in UK waters
11/43
Management’s review
Interim financial report First half year 2021
Financial results
Revenue
Power generation from offshore and onshore
wind increased by 8 % and totalled 10.7 TWh
in H1 2021. Ramp-up of generation from Bors-
sele 1 & 2, Sage Draw, Plum Creek, Willow
Creek, and Permian Energy Center was partly
offset by significantly lower wind speeds
across our offshore portfolio in particular.
Our production-based availability for Offshore
amounted to 94 %, up 1 percentage point com-
pared to the same period last year, driven by
the addition of Borssele 1 & 2 performing with
high availability.
Thermal power generation increased by 53 %
and amounted to 3.8 TWh, driven by favoura-
ble market conditions for power generation as
well as increased demand for ancillary ser-
vices. Heat generation amounted to 5.0 TWh,
up 22 % compared to the same period last
year mainly due to colder weather in January
and April.
As a result of the above-mentioned develop-
ments in power generation, the share of gener-
ation from offshore and onshore wind account-
ed for 74 % of our total power generation, a
decrease of 6 percentage points compared to
the same period last year. Our renewable
share of generation accounted for 89 % in H1
2021 compared to 88 % in H1 2020.
Revenue amounted to DKK 32.5 billion. The
increase of 20 % relative to H1 2020 was pri-
marily due to the divestment of the offshore
transmission asset at Hornsea 1 in Q1 2021 and
higher gas and power prices across all mar-
kets, partly offset by low wind speeds in H1
2021 and the divested LNG and Danish distribu-
tion, residential customer, and city light busi-
nesses (RBC) in 2020.
EBITDA
Operating profit (EBITDA) totalled DKK 13.1
billion, of which the gain from the 50 % farm-
down of Borssele 1 & 2 amounted to DKK 5.4
billion. Thus, EBITDA excluding new partner-
ships amounted to DKK 7.7 billion, a decrease
of DKK 2.1 billion compared to the same period
last year.
Earnings from offshore and onshore wind farms
in operation amounted to DKK 7.9 billion, a
decrease of DKK 0.3 billion compared to the
same period last year. Ramp-up of generation
from Borssele 1 & 2, Sage Draw, Plum Creek,
Willow Creek, and Permian Energy Center
combined with the addition of CfDs for the last
400 MW of capacity from Hornsea 1 and a
EBITDA, DKK billion
DKK 13.1 billion
Offshore
Onshore
Bioenergy & Other
9 %
3 %
88 %
Results H1
Ceasing the use of business performance
With the implementation of IFRS 9 in 2018, it has become significantly easier to apply IFRS hedge accounting to
our commodity hedges. We have concluded that IFRS 9 can replace our business performance principle, and
therefore, we are reporting based on IFRS only from 1 January 2021.
At the end of 2020, the value of our business performance hedges deferred to a future period amounted to DKK -
2.7 billion, of which DKK -1.1 billion relates to 2021. This net loss has already been recognised in the income state-
ment under IFRS in previous years, as we have not previously applied hedge accounting for these. Consequently,
for the period 2021-2025, EBITDA (according to IFRS) will be higher with a similar amount compared to what the
business performance EBITDA would have been in the same period if we had continued to report based on this
principle. For H1 2021, EBITDA according to IFRS was DKK 0.6 billion higher than if we had kept reporting accord-
ing to the business performance principle. The main part of the amount was related to site EBITDA in Offshore
and the remaining part was related to our CHP plants and gas activities in Bioenergy & Other.
Throughout the management’s review, we will use business performance as comparable numbers for 2020 for a
better like-for-like comparison, while our consolidated financial statements will be reported after IFRS only. Read
more in note 2 ‘Business Performance’.
In addition, see more info in the annual report for 2020 in the financial outlook section on page 16, and in notes 1.4
and 1.6 on pages 88 and 90, respectively.
Financial results, DKKm H1 2021 H1 2020 %
Revenue
32,497 27,001 20 %
EBITDA
13,059 9,761 34 %
Depreciation and amortisation
(3,889) (3,581) 9 %
Operating profit (loss) (EBIT)
9,170 6,180 48 %
Gain (loss) on divestment of enterprises
(36) (17) 112 %
Financial items, net
(885) (1,786) (50 %)
Profit before tax
8,245 4,383 88 %
Tax on profit (loss) for the period
(1,103) (1,846) (40 %)
Tax rate
13 % 42% (29 %p)
Profit (loss) for the period
7,142 2,493 186 %
Management’s review
12/43
Interim financial report
First half year 2021
positive effect from ceasing to report accord-
ing to the business performance principle in
2021 (approx. DKK 0.5 billion) contributed posi-
tively to our site earnings. However, this was
more than offset by significantly lower wind
speeds across our offshore portfolio (approx.
DKK -1.8 billion compared to H1 2020 and ap-
prox. DKK -1.0 billion compared to a normal
wind year), higher TNUoS tariffs following the
divestment of the offshore transmission assets
at Walney Extension in mid-2020 and Hornsea
1 in Q1 2021 (approx. DKK -0.2 billion), lower
earnings from Horns Rev 2 due to the subsidy
period ending in October 2020 (approx. DKK
-0.1 billion), and lastly lower ROC recycle prices
in H1 2021 compared to the same period last
year (approx. DKK -0.1 billion).
EBITDA from partnerships amounted to DKK
5.1 billion and was primarily related to the 50 %
farm-down of Borssele 1 & 2, whereas earnings
from existing partnerships amounted to DKK
-0.3 billion, a decrease of DKK 1.8 billion com-
pared to the same period last year, which saw
high earnings related to the Hornsea 1 trans-
mission asset. H1 2021 was negatively impact-
ed by a DKK 0.8 billion warranty provision to-
wards our partners related to cable protection
system issues at some of our offshore wind
farms.
The divested RBC businesses contributed DKK
0.8 billion to EBITDA in H1 2020.
EBITDA from our CHP plants amounted to DKK
1.0 billion, an increase of DKK 0.4 billion com-
pared to the same period last year. The in-
crease was mainly due to higher realised pow-
er prices together with higher sales of ancillary
services and increased heat generation.
EBITDA from our gas business also contributed
with earnings of DKK 0.3 billion in H1 2021, an
increase of DKK 0.4 billion compared to the
same period last year.
EBIT
EBIT increased by DKK 3.0 billion to DKK 9.2
billion in H1 2021, primarily as a result of the
higher EBITDA, only partly offset by higher
depreciation driven by more wind farms in
operation.
Financial income and expenses
Net financial income and expenses amounted
to DKK -0.9 billion compared to DKK -1.8 bil-
lion in H1 2020. The lower net expenses were
mainly due to high interest in H1 2020 related
to potential tax payments and a loss on inter-
est rate swaps in connection with the termina-
tion of local project financing and related
swaps in the US, and generally lower net inter-
est expenses in H1 2021 due to lower net debt.
Tax and tax rate
Tax on profit for the period amounted to DKK
1.1 billion, DKK 0.7 billion lower than in the
same period last year. The effective tax rate
was 13 % and was significantly impacted by
the tax-exempt gain of DKK 5.4 billion from
the 50 % farm-down of Borssele 1 & 2. Tax for
H1 2021 was further reduced by DKK 0.9 billion
regarding uncertain tax positions (UTP) due to
updated management assessments and the
increase of the UK tax rate from 19 % to 25 %
from 2023. This was partly offset by the
recognition of a deferred tax liability related
to an initial tax equity contribution for Permian
Energy Center and our US offshore portfolio,
and taxable income in onshore entities without
tax equity partners following the winter storm
in Texas in February.
Profit for the period
Profit for the period totalled DKK 7.1 billion,
DKK 4.6 billion higher than in H1 2020. The
increase was primarily due to the gain from
the 50 % farm-down of Borssele 1 & 2, and
from lower net financial expenses and tax
expenses.
Cash flows and net debt
Cash flows from operating activities
Cash flows from operating activities totalled
DKK 11.2 billion in H1 2021 compared to DKK
7.8 billion in H1 2020. The increase of DKK 3.5
billion was mainly driven by a cash inflow
from work in progress in H1 2021 versus a cash
outflow in H1 2020. This was partly offset by
higher cash flow from tax equity contribu-
tions in H1 2020 which was positively impact-
ed by Sage Draw and Plum Creek, while H1
2021 only saw an initial tax equity contribu-
tion for Permian Energy Center.
In H1 2021, we had a net cash inflow from
work in progress of DKK 3.8 billion, mainly
from the divestment of the Hornsea 1 off-
shore transmission asset (DKK 5.0 billion),
partly offset by construction work on the
offshore transmission asset at Hornsea 2. In
Cash flow and net debt, DKKm H1 2021 H1 2020 %
Cash flows from operating activities
11,234 7,769 45 %
EBITDA
13,059 9,761 34 %
Change in derivatives
(475) (514) (8 %)
Change in provisions
645 (365) n.a.
Reversal of gain (loss) on divestments of assets
(5,678) (1,288) 341 %
Other items
(46) (7) 557 %
Interest expense, net
(636) (1,163) (45 %)
Paid tax
(1,186) (1,353) (12 %)
Change in work in progress
3,754 (2,015) n.a.
Change in tax equity partner liabilities
619 2,892 (79 %)
Change in other working capital
1,178 1,821 (35 %)
Gross investments
(18,798) (9,065) 107 %
Divestments
10,560 52 n.a.
Free cash flow
2,996 (1,244) n.a.
Net debt, beginning of period
12,343 17,230 (28 %)
Free cash flow from continuing operations
(2,996) 1,244 n.a.
Free cash flow from discontinued operations
- 44 n.a.
Dividends and hybrid coupon paid
5,254 4,921 7 %
Addition of lease obligations
423 147 188 %
Issuance of hybrid capital, net
(4,356) - n.a.
Exchange rate adjustments, etc.
1,399 (1,321) n.a.
Net debt, end of period
12,067 22,272 (46 %)
Management’s review
13/43
Interim financial report
First half year 2021
billion at the end of June 2021 against DKK 12.3
billion at the end of 2020. The slight decrease
was mainly due to the positive free cash flow
of DKK 3.0 billion and the issuance of new
hybrid capital, almost offset by dividend and
hybrid coupon payments of DKK 5.3 billion
and exchange rate adjustments.
Equity
Equity was DKK 96.9 billion at the end of June
2021 against DKK 97.3 billion at the end of
2020.
Capital employed
Capital employed was DKK 109.0 billion at the
end of June 2021 against DKK 109.7 billion at
the end of 2020.
Financial ratios
Return on capital employed (ROCE)
Return on capital employed (ROCE, last 12
months) was 12.5 % at the end of H1 2021. The
increase of 1.7 percentage points compared to
the same period last year was attributable to
the higher EBIT over the 12-month period.
Credit metric (FFO/adjusted net debt)
The funds from operations (FFO)/adjusted net
debt credit metric was 63 % at the end of June
2021 against 43 % in the same period last year.
Non-financial results
Green share of heat and power generation
The green share of heat and power generation
amounted to 89 % in H1 2021, up 1 percentage
point relative to the same period last year.
The slight increase was mainly due to higher
generation from our operating offshore and
onshore assets due to additional capacity, and
H1 2020, we had a net cash outflow of DKK 2.0
billion, mainly from supplier payments related
to the construction of Hornsea 1 for partners
and the offshore transmission asset at Hornsea
2, partly offset by the divestment of the off-
shore transmission asset at Walney Extension.
Investments and divestments
Gross investments amounted to DKK 18.8 bil-
lion against DKK 9.1 billion in H1 2020. The main
investments in H1 2021 were:
–
offshore wind farms (DKK 10.4 billion),
including Greater Changhua 1 & 2a in
Taiwan, Hornsea 2 in the UK and our
portfolio of US projects as well as pay-
ments related to Baltica 2 & 3 in Poland
through the 50/50 joint venture with
PGE.
–
onshore wind and solar PV farms (DKK
8.3 billion), including the acquisition of
Brookfield Renewable Ireland, and the
construction of Permian Energy Center,
Old 300, Muscle Shoals, Western Trail,
Helena Energy Center, Haystack, and
Kennoxhead 1.
Divestments amounted to DKK 10.6 billion in
H1 2021 and were mainly related to the 50 %
farm-down of Borssele 1 & 2 with proceeds
(NIBD impact) of DKK 9.3 billion.
Furthermore, proceeds from the divestment of
a 25 % ownership interest in Ocean Wind 1 to
New Jersey’s Public Service Enterprise Group
(PSEG) and final settlement with Global Infra-
structure Partners (GIP) regarding Hornsea 1
were included in divestments.
Interest-bearing net debt
Interest-bearing net debt totalled DKK 12.1
Key ratios, DKKm, % H1 2021 H1 2020 %
ROCE
1
12.5 10.8 2 %p
Adjusted net debt 22,036 30,516 (28 %)
FFO/adjusted net debt
2
62.9 43.4 20 %p
1)
See page 89 in the annual report for 2020 for definition.
2)
Restated number for H1 2020. See note 13 for adjusted definition.
Capital employed, %
Offshore
Onshore
Bioenergy & Other
DKK 109.0 billion
1 %
17 %
from a higher share of biomass based ther-
mal power generation. This was partly offset
by lower wind speeds and increased thermal
generation of heat and power driven by high-
er heat demand (due to colder weather) and
regulatory obligations to make all our ener-
gy capacities available to the market.
Greenhouse gas emissions
Greenhouse gas intensity from our heat and
power generation and other operating activi-
ties (scope 1 and 2) decreased to 56 g CO
2
e/
kWh in H1 2021 against 64 g CO
2
e/kWh in H1
2020. Emissions per kWh decreased for the
same reasons as mentioned above.
Greenhouse gas emissions from our supply
chain and sales activities (scope 3) decreased
by 25 % to 9.9 million tonnes in H1 2021, driv-
en by lower gas sales volumes.
Safety
In H1 2021, we had 35 total recordable inju-
ries (TRIs), of which 19 injuries were related to
contractors’ employees. This was a decrease
of four injuries compared to the same period
last year or a reduction of 10 %. The number
of hours worked was 11.4 million hours, an
increase of 9 % compared to H1 2020. During
H1, the total recordable injury rate (TRIR)
decreased from 3.7 in H1 2020 to 3.1 in H1
2021.
82 %
14/43
Management’s review
Interim financial report First half year 2021
Highlights
– Installed the first turbines at our 1.3 GW
offshore wind farm Hornsea 2.
– Ocean Wind 2 awarded 1,148 MW offshore
wind contract in New Jersey, fully utilising
our Ocean Wind lease area.
– Closed the agreement to enter into a
50/50 joint venture with PGE for the Baltica
2 & 3 projects in Poland.
– Closed the agreement with Norges Bank
Investment Management to farm down
50 % of the 752 MW offshore wind farm
Borssele 1 & 2.
– Submitted bids in the Maryland auction.
– Submitted bids in the Scotland lease auc-
tion.
– Submitted bids in the first-ever Japanese
auction for bottom-fixed offshore wind.
– Entered into new strategic partnerships in
the Norway, Korea, Scotland, and Japan.
Financial results Q2 2021
Power generation decreased by 4 % relative to
Q2 2020, primarily due to significantly lower
wind speeds and lower availability. This was
partly offset by ramp-up of generation from
Borssele 1 & 2.
Wind speeds amounted to a portfolio average
of 7.8 m/s, which was lower than in Q2 2020
(8.4 m/s) and the normal wind speeds expected
in the second quarter (8.6 m/s). Availability
ended at 93 %, which was 2 percentage points
lower than in Q2 2020 due to planned outages
and maintenance.
Revenue decreased by 5 % to DKK 8.9 billion.
Revenue from offshore wind farms in operation
decreased by 8 % to DKK 3.3 billion, mainly
driven by the lower power generation. Reve-
nue from power sales increased by DKK 2.2
billion, mainly due to the higher power prices
despite lower volumes sold.
There was no significant revenue from con-
struction agreements in Q2 2021. In Q2 2020,
revenue was primarily related to the divest-
ment of the offshore transmission asset at
Walney Extension, the construction of Virginia
Coastal Wind, and the completion of Hornsea
1.
EBITDA increased by DKK 5.2 billion and
amounted to DKK 7.5 billion.
EBITDA from Sites, O&M, and PPAs amounted
to DKK 2.4 billion in Q2 2021. The 8 % decrease
was due to the above-mentioned lower power
generation following a second quarter with
very low wind (approx. DKK -0.7 billion com-
pared to Q2 2020 and approx. DKK -0.9 billion
compared to a normal wind year). Further-
more, higher TNUoS tariffs following the di-
vestment of the offshore transmission assets
at Walney Extension in mid-2020 and Hornsea
1 in Q1 2021 as well as lower earnings from
Horns Rev 2 due to the subsidy period ending
in October 2020 contributed to the lower
earnings. This was only partly offset by ramp-
up of generation from Borssele 1 & 2 and the
addition of the last 400 MW of Hornsea 1 re-
ceiving CfDs in April together with a positive
effect of ceasing to report according to the
business performance principle in 2021.
EBITDA from partnerships increased by DKK
5.3 billion, amounting to DKK 5.6 billion. In Q2
2021, earnings from construction agreements
Financial results Q2 2021 Q2 2020 % H1 2021 H1 2020 %
Business drivers
Decided (FID'ed) and installed capacity
1
GW
9.8 9.9 (1 %) 9.8 9.9 (1 %)
Installed capacity
GW
7.6 6.8 12 % 7.6 6.8 12 %
Generation capacity
GW
4.0 3.8 5 % 4.0 3.8 5 %
Wind speed
2
m/s
7.8 8.4 (7 %) 9.2 10.4 (12 %)
Load factor
%
29 32 (3 %p) 39 46 (7 %p)
Availability
%
93 95 (2 %p) 94 93 1 %p
Power generation
TWh
2.5 2.6 (4 %) 7.1 7.2 (1 %)
Denmark
0.4 0.4 0 % 0.9 1.1 (18 %)
United Kingdom
1.3 1.7 (24 %) 3.9 4.7 (17 %)
Germany
0.3 0.4 (25 %) 0.9 1.2 (25 %)
The Netherlands
0.5 0.1 400 % 1.3 0.1 n.a.
Other
0.0 0.0 n.a. 0.1 0.0 n.a.
Power sales TWh 4.5 5.5 (18 %) 11.4 14.3 (20 %)
Power price, LEBA UK
GBP/MWh
86.1 25.4 239 % 82.3 29.5 179 %
British pound
DKK/GBP
8.6 8.4 2 % 8.6 8.5 1 %
Financial performance
Revenue
DKKm
8,940 9,364 (5 %) 22,225 17,339 28 %
Sites, O&M and PPAs
3,344 3,625 (8 %) 9,029 9,350 (3 %)
Power sales
5,412 3,208 69 % 7,859 4,872 61 %
Construction agreements
34 2,485 (99 %) 5,135 3,049 68 %
Other
150 46 226 % 202 68 197 %
EBITDA
DKKm
7,527 2,361 219 % 11,473 7,993 44 %
Sites, O&M, and PPAs
2,368 2,578 (8 %) 7,254 7,514 (3 %)
Construction agreements and divestment gains 5,648 396 n.a. 5,075 1,495 239 %
Other, incl. project development (489) (613) (20 %) (856) (1,016) (16 %)
Depreciation
DKKm
(1,502) (1,452) 3 % (3,049) (2,860) 7 %
EBIT
DKKm
6,025 909 563 % 8,424 5,133 64 %
Cash flow from operating activities
DKKm
1,301 4,338 (70 %) 6,507 2,785 134 %
Gross investments
DKKm
(5,793) (2,802) 107 % (10,360) (7,094) 46 %
Divestments
DKKm
10,702 (150) n.a. 10,669 (141) n.a.
Free cash flow DKKm
6,210 1,386 348 % 6,816 (4,450) n.a.
Capital employed DKKm
87,862 84,311 4 % 87,862 84,311 4 %
O&M: Operation and maintenance agreements, PPAs: Power purchase agreements
1)
In Q2 2021, we aligned our definition of installed capacity, hence all assets (installed or FID’ed) are reported using
nameplate capacity. Previously a few wind farms were reported using ‘power optimised capacity’ or ‘export cable limit
capacity
1)
2020 numbers have been restated. See note 2.5 in our ESG Performance Report.
Offshore
Management’s review
15/43
Interim financial report
First half year 2021
were primarily related to the 50 % farm-down
of Borssele 1 & 2 resulting in a gain from new
partnerships of DKK 5.4 billion. The remaining
EBITDA in Q2 2021 was related to earnings
from finalised construction projects.
EBITDA from other activities, including project
development, amounted to DKK -0.5 billion
and was slightly lower than in the same period
last year.
Cash flow from operating activities amounted
to DKK 1.3 billion, which was DKK 3.0 billion
lower than in Q2 2020. The decrease was
mainly due to the lower EBITDA (excluding the
farm-down of Borssele 1 & 2, where the pro-
ceeds are included in the divestment cash
flow), a change in the value of derivates and
that Q2 2020 was positively impacted by the
divestment of the offshore transmission asset
at Walney Extension.
Gross investments amounted to DKK 5.8 billion
and mainly related to Hornsea 2, Greater
Changhua 1 & 2a, and Ocean Wind as well as
the acquisition of Baltica 2 & 3.
Financial results H1 2021
Power generation decreased marginally by 0.1
TWh relative to H1 2020, as significantly lower
wind speeds and curtailments were offset by
high availability, especially at our new sites
Hornsea 1 and Borssele 1 & 2, together with
ramp-up of generation from Borssele 1 & 2.
Wind speeds amounted to a portfolio average
of 9.2 m/s, which was below a normal wind
year (9.8 m/s), with low wind in January and
especially during Q2 2021. Availability ended
at 94 %, which was 1 percentage point above
H1 2020. This was mainly due to the addition of
Borssele 1 & 2 performing with high availability.
Revenue increased by 28 % to DKK 22.2 billion.
Revenue from construction agreements in-
creased by DKK 2.1 billion, primarily due to
the divestment of the offshore transmission
asset at Hornsea 1 in H1 2021. In H1 2020, rev-
enue was primarily related to the divestment
of the offshore transmission asset at Walney
Extension, the construction of Virginia
Coastal Wind, and the completion of
Hornsea 1.
Revenue from offshore wind farms in opera-
tion amounted to DKK 9.0 billion, a DKK 0.3
billion decrease compared to the same peri-
od last year, due to the above-mentioned
lower power generation following a first half
year with very low wind. Revenue from pow-
er sales increased by DKK 3.0 billion due to
significantly higher power prices despite low-
er volumes sold.
EBITDA increased by 44 % relative to H1
2020 and amounted to DKK 11.5 billion.
EBITDA from Sites, O&M, and PPAs amount-
ed to DKK 7.3 billion in H1 2021. The 3 % de-
crease was due to the above-mentioned
lower power generation following a first half
year with low wind (approx. DKK -1.8 billion
compared to H1 2020 and approx. DKK -1.0
billion compared to a normal wind year).
Furthermore, higher TNUoS tariffs following
the divestment of the offshore transmission
asset at Walney Extension in mid-2020 and
Hornsea 1 in Q1 2021 (approx. DKK -0.2 billion)
as well as lower earnings from Horns Rev 2
due to the subsidy period ending in October
2020 (approx. -DKK 0.1 billion) contributed to
the lower earnings. Finally, H1 2021 saw lower
ROC recycle prices than H1 2020 (approx.
DKK -0.1 billion). This was only partly offset
by ramp-up of generation from Borssele 1 & 2
and the addition of CfDs for the last 400 MW
of generation from Hornsea 1 respectively,
together with a positive effect of ceasing to
report according to the business perfor-
mance principle in 2021.
EBITDA from partnerships amounted to DKK
5.1 billion and was primarily related to the 50
% farm-down of Borssele 1 & 2, resulting in a
gain from new partnerships of DKK 5.4 billion
and earnings from finalised construction
projects. This was partly offset by a DKK 0.8
billion warranty provision towards our part-
ners related to cable protection system is-
sues at some of our offshore wind farms in Q1
2021.
EBITDA from other activities, including pro-
ject development, amounted to DKK -0.9
billion, slightly lower than in the same period
last year, and was mainly related to ex-
pensed project development costs.
Depreciation increased by 7 % and amount-
ed to DKK 3.0 billion. The increase was main-
ly due to the commissioning of Borssele 1 & 2.
Cash flow from operating activities amount-
ed to DKK 6.5 billion, which was DKK 3.7
billion higher than in H1 2020. The significant
increase was mainly driven by the divest-
ment of the Hornsea 1 offshore transmission
assets in March 2021. In H1 2021, we had a net
cash inflow from work in progress of DKK 3.8
billion, mainly from the above-mentioned
12.5
8.4
8.6
9.9
9.8
10.5
7.8
9.4*
Q1 Q2 Q3 Q4 FY
2020 2021 "Normal wind year"
Wind speed, (m/s) for our offshore wind farms
The wind speed indicates how
many metres per second the
wind has blown in the areas
where we have offshore wind
farms. The weighting is based
on our generation capacity.
* Indicates m/s for full year
2021 (if Q3 and Q4 follows the
normal wind year)
divestment. In H1 2020, we had a net cash
outflow of DKK 2.0 billion, mainly from suppli-
er payments related to the construction of
Hornsea 1 for partners, the offshore transmis-
sion assets at Hornsea 2, and from the divest-
ment of the offshore transmission asset at
Walney Extension.
Gross investments amounted to DKK 10.4
billion and were mainly related to Greater
Changhua 1 & 2a, Hornsea 2, our US portfolio
as well as Baltica 2 & 3.
Divestments amounted to DKK 10.7 billion in
H1 2021 and were mainly related to the 50 %
farm-down of Borssele 1 & 2 with proceeds
(NIBD impact) of DKK 9.3 billion. Furthermore,
proceeds from the divestment of a 25 % own-
ership interest in Ocean Wind 1 to New Jer-
sey’s Public Service Enterprise Group (PSEG)
and final settlement with Global Infrastruc-
ture Partners (GIP) regarding Hornsea 1 were
included in divestments.
2020 numbers have been restated. See note 2.5 in our ESG Performance Report.
16/43
Management’s review
Interim financial report First half year 2021
Highlights
– Commissioned Permian Energy Center in
Texas, our first combined solar PV and stor-
age facility.
– Western Trail wind farm in Texas was com-
missioned in August.
– Closed the agreement to acquire Brookfield
Renewable Ireland, a European onshore
wind platform.
– Signed PPAs with NIMECA, Microsoft Corpo-
ration , and Royal DSM.
Financial results Q2 2021
Power generation from our operating onshore
assets increased by 25 % relative to Q2 2020.
The increase was due to the commissioning of
the wind farms Plum Creek and Willow Creek,
and the solar PV farm Permian Energy Center.
In Q2 2021, the wind speed across the portfolio
was 7.3 m/s, which was significantly lower than
both last year (8.0 m/s) and in a normal wind
year in Q2 (8.1 m/s).
Revenue was down DKK 0.1 billion relative to
Q2 2020 and amounted to DKK 0.1 billion. The
decrease was mainly due to a minor subse-
quent credit loss in Q2 2021 regarding the win-
ter storm period in February 2021, negative
effects from ceasing to report according to the
business performance principle in 2021, and
lower wind speeds. This was only partly offset
by higher power generation and higher realised
prices together with more assets in operation.
EBITDA for Q2 2021 amounted to DKK 0.2 bil-
lion, DKK 0.1 billion lower than in the same
period last year. The decrease was caused by
the lower revenue as described above and
higher fixed costs due to the acquisition of
Brookfield Renewable Ireland (BRI) in June.
Additionally, Q2 2020 was positively impact-
ed by a gain from the divestment of Oak Solar.
Cash flow from operating activities decreased
by DKK 2.4 billion compared to the same peri-
od last year. The decrease was mainly due to
large tax equity contributions in Q2 2020 for
Sage Draw and Plum Creek, only partly offset
by an initial tax equity contribution for Permi-
an Energy Center in Q2 2021.
Gross investments amounted to DKK 6.3 bil-
lion in Q2 2021 and were related to the acqui-
sition of BRI as well as the construction of
Permian Energy Center, Old 300, Muscle
Shoals, Western Trail, Helena Energy Center,
Haystack, and Kennoxhead 1.
Financial results H1 2021
In H1 2021, power generation from our operat-
ing onshore assets increased by 33 % com-
pared to H1 2020, amounting to 3.6 TWh. The
increase was driven by the commissioning of
our wind farms Sage Draw, Plum Creek, and
Willow Creek, and the solar PV farm Permian
Energy Center. Wind speeds across the portfo-
lio amounted to 7.5 m/s, which was both lower
than in the same period last year (7.8 m/s), and
in a normal wind year (8.0 m/s).
Availability for our wind assets ended at 95 %,
down 1 percentage point compared to the
same period last year. The decrease was driv-
Financial results Q2 2021 Q2 2020 % H1 2021 H1 2020 %
Business drivers
Decided (FID'ed) and installed capacity GW
4.6 2.1 119 % 4.6 2.1 119 %
Installed capacity GW
2.5 1.6 56 % 2.5 1.6 56 %
Wind speed
1
m/s
7.3 8.0 (9 %) 7.5 7.8 (4 %)
Load factor, wind
1
%
45 49 (4 %p) 45 47 (2 %p)
Availability, wind
1
%
97 96 1 %p 95 96 (1 %p)
Power generation
TWh
2.0 1.6 25 % 3.6 2.7 33 %
US dollar
DKK/USD
6.2 6.8 (9 %) 6.2 6.8 (9 %)
Financial performance
Revenue
DKKm
107 160 (33 %) 227 297 (24 %)
EBITDA
DKKm
178 312 (43 %) 406 499 (19 %)
Sites
(5) 103 n.a. 39 176 (78 %)
Production tax credits and tax attributes
312 268 16 % 595 477 25 %
Other, incl. project development
(129) (59) 119 % (228) (154) 48 %
Depreciation
DKKm
(201) (109) 84 % (329) (207) 59 %
EBIT
DKKm
(23) 203 n.a. 77 292 (74 %)
Cash flow from operating activities
DKKm
857 3,209 (73 %) 411 3,162 (87 %)
Gross investments
DKKm
(6,275) (733) 756 % (8,280) (1,481) 459 %
Divestments
DKKm
(1) 114 n.a. - 114 n.a.
Free cash flow
DKKm
(5,419) 2,590 n.a. (7,869 1,795 n.a.
Capital employed
DKKm
17,968 8,608 109 % 17,968 8,608 109 %
US, wind
1.6 1.6 0 % 3.2 2.7 19 %
US, solar PV
0.4 0.0 n.a. 0.4 0.0 n.a.
Europe
0.0 0.0 n.a. 0.0 0.0 n.a.
Load factor, solar PV
%
29 31 (2 %p) 29 20 9 %p
Availability, solar PV
%
90 - n.a. 90 - n.a.
Onshore
1)
US only.
Management’s review
17/43
Interim financial report
First half year 2021
en by the unprecedented winter storm in Feb-
ruary in Texas. In H1 2021, availability for our
solar asset was 90 %, adversely impacted by
substation outages and testing at Permian
Energy Center.
Revenue was down DKK 0.1 billion relative to
H1 2020 and amounted to DKK 0.2 billion. The
decrease was due to lower prices for the part
of the portfolio not covered by PPAs and the
winter storm period in Q1 2021. Furthermore, a
negative effect from ceasing to report accord-
ing to the business performance principle in
2021, and lower wind speeds contributed to the
lower revenue. This was partly offset by more
assets in operation and generally higher real-
ised prices.
EBITDA for H1 2021 decreased by DKK 0.1 bil-
lion compared to the same period last year
and amounted to DKK 0.4 billion. The decrease
was caused by the lower revenue as described
above and higher fixed costs due to the acquisi-
tion of BRI. Additionally, H1 2020 was positive-
ly impacted by a gain from the divestment of
Oak Solar.
Cash flow from operating activities decreased
by DKK 2.8 billion compared to the same peri-
od last year. The decrease was mainly due to
large tax equity contributions for Sage Draw
and Plum Creek in H1 2020 as well as more
funds tied up in net working capital, only partly
offset by a tax equity contribution for Permian
Energy Center in H1 2021.
Gross investments amounted to DKK 8.3 billion
in H1 2021 and were related to the acquisition
of BRI as well as the construction of Permian
Energy Center, Old 300, Muscle Shoals, West-
ern Trail, Helena Energy Center, Haystack, and
Kennoxhead 1.
7.5
8.0
6.7
8.0
7.6
7.7
7.3
7.4*
Q1 Q2 Q3 Q4 FY
2020 2021 "Normal wind year"
Wind speed, (m/s) for our onshore wind farms
The wind speed indicates how
many metres per second the
wind has blown in the areas
where we have onshore wind
farms. The weighting is based
on our generation capacity.
* Indicates m/s for full year
2021 (if Q3 and Q4 follows the
normal wind year)
Willow Creek,
Butte County, South Dakota, US
18/43
Management’s review
Interim financial report First half year 2021
Financial results Q2 2021
Power generation was 67 % higher than in Q2
2020, primarily driven by higher realised prices
and higher sales of ancillary services. Heat
generation increased by 10 % in Q2 2021, main-
ly due to colder weather in the beginning of
the quarter.
Revenue increased by 43 % compared to Q2
2020 and amounted to DKK 5.6 billion. The
increase was driven by significantly higher gas
prices, which led to higher revenue in our gas
business despite lower volumes sold, mainly
due to the divestment of our LNG activities.
Furthermore, we had higher revenue from our
CHP plants due to the higher power generation
and higher Danish power prices. This was partly
offset by the divestment of our RBC businesses
in August 2020.
EBITDA amounted to DKK 0.5 billion compared
to DKK 0.2 billion in Q2 2020.
EBITDA from CHP plants was DKK 0.2 billion
higher than in the same period last year, total-
ling DKK 0.4 billion in Q2 2021. The increase
was mainly due to higher power prices in Den-
mark combined with higher earnings from the
sale of ancillary services.
EBITDA from Gas Markets & Infrastructure in-
creased by DKK 0.4 billion relative to the same
period last year, amounting to DKK 0.2 billion
in Q2 2021. The positive effect was driven by
significant increases in gas prices throughout
Q2 2021, whereas gas prices fell during Q2
2020. This led to a net positive effect from
revaluating our gas at storage and storage
hedges.
EBITDA from our distribution, residential cus-
tomer, and city light businesses amounted to
DKK 0.3 billion in Q2 2020, which has not been
repeated due to the divestment in August
2020 to Andel.
Cash flow from operating activities amounted
to DKK 1.3 billion in Q2 2021. The increase of
DKK 0.5 billion was mainly due to a significant
change in the value of derivatives and the
higher EBITDA. This was partly offset by more
funds tied up in net working capital due to
increasing trade receivables during Q2 2021
versus decreasing trade receivables during Q2
2020.
Financial results H1 2021
Power generation was 53 % higher than in H1
2020, driven by higher realised prices as well
as increased demand for ancillary services.
Heat generation increased by 22 % in H1 2021
mainly due to colder weather in January and
April.
Revenue increased by 10 % compared to H1
2020 and amounted to DKK 12.6 billion. The
increase was driven by a significant increase in
the average gas price leading to higher reve-
nue in our gas business, partly offset by lower
gas volumes sold, mainly due to the divest-
ment of our LNG activities. Further, we saw
higher revenue from our CHP plants due to
higher power prices in Denmark, which was
partly offset by the divestment of our distribu-
Financial results Q2 2021 Q2 2020 % H1 2021 H1 2020 %
Business drivers
Degree days Number 487 436 12 % 1,812 1,501 21 %
Heat generation TWh
1.1 1.0 10 % 5.0 4.1 22 %
Power generation
TWh
1.5 0.9 67 % 3.8 2.5 53 %
Gas sales
TWh
15.1 20.1 (25 %) 34.0 46.7 (27 %)
Power sales
TWh
2.2 3.0 (27 %) 4.5 6.6 (32 %)
Gas price, TTF
EUR/MWh
24.8 5.3 368 % 21.6 7.5 187 %
Power price, DK
EUR/MWh
58.8 20.5 187 % 53.9 20.8 159 %
Green dark spread, DK
EUR/MWh
(8.3) (12.2) (32 %) (6.3) (13.7) (54 %)
Green spark spread, DK
EUR/MWh
(9.4) 1.2 n.a. (5.6) (3.2) 71 %
Financial performance
Revenue DKKm
5,567 3,895 43 % 12,587 11,404 10 %
EBITDA
DKKm
503 185 172 % 1,125 1,118 1 %
CHP plants
351 152 131 % 1,027 672 53 %
Gas Markets & Infrastructure
232 (190) n.a. 251 (179) n.a.
Distribution, B2C, and city light
- 305 n.a. - 781 n.a.
Other, incl. project development
(80) (82) (2 %) (153) (156) (2 %)
Depreciation
DKKm
(194) (208) (7 %) (394) (400) (2 %)
EBIT
DKKm
309 (23) n.a. 731 718 2 %
Cash flow from operating activities
DKKm
1,275 817 56 % 4,293 2,374 81 %
Gross investments
DKKm
(30) (179) (83 %) (89) (423) (79 %)
Divestments
DKKm
(174) 81 n.a. (203) 80 n.a.
Free cash flow
DKKm
1,071 719 49 % 4,001 2,031 97 %
Capital employed
DKKm
1,727 13,670 (87 %) 1,727 13,670 (87 %)
Bioenergy & Other
Management’s review
19/43
Interim financial report
First half year 2021
tion, residential customer, and city light busi-
nesses in August 2020 and part of our B2B
business on 1 March 2021.
EBITDA amounted to DKK 1.1 billion, in line
with H1 2020.
EBITDA from CHP plants was DKK 0.4 billion
higher than in the same period last year, to-
talling DKK 1.0 billion in H1 2021. The increase
was mainly due to higher power prices in Den-
mark combined with higher earnings from
ancillary services and a positive effect from
ceasing to report according to the business
performance principle in 2021.
EBITDA from Gas Markets & Infrastructure
amounted to DKK 0.3 billion in H1 2021, a
DKK 0.4 billion increase relative to the same
period last year. This was a result of a higher
net positive effect from revaluating our gas
at storage and storage hedges as prices in Q2
2021 saw a steep increase versus a decrease
in Q2 2020. This was combined with a provi-
sion for bad debt in our B2B business in Q1
2020 to cover the COVID-19-related default
risk among our customers as well as a posi-
tive effect from ceasing to report according
to the business performance principle in 2021.
EBITDA from our RBC businesses amounted
to DKK 0.8 billion in H1 2020, which has not
been repeated due to the divestment in Au-
gust 2020 to Andel.
Cash flow from operating activities amount-
ed to DKK 4.3 billion in H1 2021. The increase
of DKK 1.9 billion was mainly due to a positive
effect from the change in the value of deriva-
tives. This was partly offset by on-account
taxes paid in H1 2021 versus receipt of on-
account taxes in H1 2020 and generally more
funds tied up in net working capital.
Gross investments amounted to DKK 0.1
billion in H1 2021 and mainly related to rein-
vestments at our CHP plants.
Asnæs bioplant,
Kalundborg, Denmark
20/43
Management’s review
Interim financial report First half year 2021
Financials, DKKm
H1 2021 H1 2020 2020
Income statement (BP
1
comparables)
Revenue
32,497 27,001 52,601
EBITDA
13,059 9,761 18,124
Offshore
11,473 7,993 14,750
Sites, O&M and PPAs
7,254 7,514 15,476
Construction agreements and divestment gains
5,075 1,495 1,593
Other, incl. project development
(856) (1,016) (2,319)
Onshore
406
499
1,131
Bioenergy & Other
1,125 1,118 2,136
Other activities
55 151 107
Operating profit (loss) (EBIT)
9,170
6,180
10,536
Profit (loss) for the period
7,142 2,493 16,716
Income statement (IFRS comparables)
Revenue
32,497 28,194 50,151
EBITDA
13,059 11,041 16,598
Depreciation and amortisation
(3,889) (3,581) (7,588)
Operating profit (loss) (EBIT)
9,170 7,460 9,010
Gain (loss) on divestment of enterprises
(36) (17) 10,831
Net financial income and expenses
(885) (1,786) (2,524)
Profit (loss) before tax
8,245 5,663 17,324
Tax
(1,103) (2,126) (1,776)
Profit (loss) for the period
7,142 3,493 15,537
Balance sheet
Assets
223,791 193,124 196,719
Equity
96,910 85,930 97,329
Shareholders in Ørsted A/S
75,842 69,789 81,376
Non-controlling interests
3,084 2,909 2,721
Hybrid capital
17,984 13,232 13,232
Interest-bearing net debt
12,067 22,272 12,343
Capital employed
108,977 108,203 109,672
Additions to property, plant, and equipment
15,423 14,844 28,442
Cash flow
Cash flow from operating activities
11,234 7,769 16,466
Gross investments
(18,798) (9,065) (26,967)
Divestments
10,560 52 19,039
Free cash flow
2,996 (1,244) 8,538
Financial ratios
Return on capital employed (ROCE)
2
, % 12.5 10.8 9.7
FFO/adjusted net debt
3
, % 62.9 43.4 65.0
Number of outstanding shares, end of period, '000
420,175 419,985 420,068
Share price, end of period, DKK
880 765 1,244
Market capitalisation, end of period, DKK billion
370 321 522
Earnings per share (EPS) (BP
1
), DKK 15.7 5.2 38.8
Dividend yield, %
0.9
Q2 2021
13,553
8,196
7,527
2,368
5,648
(489)
178
503
(12)
6,237
5,544
13,553
8,196
(1,959)
6,237
(72)
(466)
5,698
(154)
5,544
223,791
96,910
75,842
3,084
17,984
12,067
108,977
8,954
3,147
(12,133)
10,591
1,605
12.5
62.9
420,175
880
370
12.9
Q2 2020
11,625
2,956
2,361
2,578
396
(613)
312
185
98
1,129
(825)
9,962
1,592
(1,827)
(235)
(3)
(1,010)
(1,245)
(625)
(1,886)
193,124
85,930
69,789
2,909
13,232
22,272
108,203
10,011
8,197
(3,757)
45
4,485
10.8
43.4
419,985
765
321
(2.7)
Business drivers H1 2021 H1 2020 2020
Offshore
Decided (FID'ed) and installed capacity
4
, GW
9.8
9.9 9.9
Installed capacity, GW
7.6 6.8 7.6
Generation capacity, GW
4.0 3.8 4.4
Wind speed
5
, m/s
9.2
10.4 9.8
Load factor, %
39 46 45
Availability, %
94 93 94
Power generation, TWh
7.1 7.2 15.2
Power sales, TWh
11.4 14.3 29.2
Onshore
Decided (FID'ed) and installed capacity, GW
4.6 2.1 3.4
Installed capacity, GW
2.5 1.6 1.7
Wind speed
6
, m/s
7.5 7.8 7.6
Load factor, wind
6
, %
45 47 45
Availability, wind
6
, %
95 96 96
Power generation, TWh
3.6 2.7 5.7
Bioenergy & Other
Degree days, number
1,812 1,501 2,432
Heat generation, TWh
5.0 4.1 6.7
Power generation, TWh
3.8 2.5 4.4
Power sales, TWh
4.5 6.6 11.6
Gas sales, TWh
34.0 46.7 90.3
People and environment
Employees (FTE), end of period number
6,472 6,731 6,179
Total recordable injury rate (TRIR)
7
3.1 3.7 3.6
Fatalities, number
0 0 0
Green share of heat and power generation, %
89 88 90
GHG intensity, g CO
2
e/kWh (scopes 1 & 2)
56 64 58
GHG emissions, Mtonnes (scope 3)
9.9 13.1 25.3
Q2 2021
9.8
7.6
4.0
7.8
29
93
2.5
4.5
4.6
2.5
7.3
45
97
2.0
487
1.1
1.5
2.2
15.1
6,472
3.1
0
93
51
4.6
Q2 2020
9.9
6.8
3.8
8.4
32
95
2.6
5.5
2.1
1.6
8.0
49
96
1.6
436
1.0
0.9
3.0
20.1
6,731
3.7
0
86
84
5.5
Load factor, solar PV, %
29 20 29 31 20
Availability, solar PV, %
90 0 90 0 0
Performance highlights
Income statement
The income statement (BP
1
comparables)
shows business performance numbers for
2020 to form a better like-for-like compari-
son, in line with the comparison numbers
used throughout the management’s review.
1)
Business performance.
2)
EBIT (last 12 months)/average capital employed.
3)
FFO last 12 months. Net debt including 50% of hybrid capital and
cash and securities not available for use (with the exception of repo
transactions). Numbers for 2020 and 2021 have been restated.
See
note 13 for adjusted definition.
4)
Nameplate capacity from Q2 2021.
5)
2020 numbers restated. See note 2.5 in our ESG Performance Report.
6)
US only.
7)
YTD.
21/43
Management’s review
Interim financial report First half year 2021
Quarterly overview
Financials, DKKm
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Income statement (BP
1
comparables)
Revenue 18,944 15,559 10,041 11,625 15,376 18,679 15,481
EBITDA 4,863 5,003 3,360 2,956 6,805 4,613 4,116
Offshore 3,946 4,128 2,629 2,361 5,632 4,048 3,223
Sites, O&M and PPAs 4,886 4,950 3,012 2,578 4,936 4,626 2,612
Construction agreements and
divestment gains
(573) (149) 247 396 1,099 51 1,188
Other incl. project development (367) (673) (630) (613) (403) (629) (577)
Onshore 228 324 308 312 187 165 308
Bioenergy & Other 622 643 375 185 933 490 436
Other activities 67 (92) 48 98 53 (90) 149
Operating profit (loss) (EBIT) 2,933 3,091 1,265 1,129 5,051 2,169 2,435
Profit (loss) for the period 1,598 2,189 12,034 (825) 3,318 896 1,477
Income statement (IFRS comparables)
Revenue 18,944 13,195 8,762 9,962 18,232 19,815 14,543
EBITDA 4,863 3,102 2,455 1,592 9,449 5,260 3,328
Depreciation and amortisation (1,930) (1,912) (2,095) (1,827) (1,754) (1,876) (1,681)
Impairment losses - - - - - (568) -
Operating profit (loss) (EBIT) 2,933 1,190 360 (235) 7,695 2,816 1,647
Gain (loss) on divestment of enterprises 36 (291) 11,139 (3) (14) (13) (15)
Net financial income and expenses (419) (456) (282) (1,010) (776) (644) (47)
Profit (loss) before tax 2,547 442 11,219 (1,245) 6,908 2,162 1,580
Tax (949) 258 92 (625) (1,501) (733) (758)
Profit (loss) for the period 1,598 715 11,329 (1,886) 5,379 1,400 856
Balance sheet
Assets 210,972 196,719 194,567 193,124 193,636 192,860 194,521
Equity 96,541 97,329 96,472 85,930 89,015 89,562 87,369
Shareholders in Ørsted A/S 75,835 81,376 80,450 69,789 72,728 73,082 70,977
Non-controlling interests 2,722 2,721 2,790 2,909 3,055 3,248 3,153
Hybrid capital 17,984 13,232 13,232 13,232 13,232 13,232 13,239
Interest-bearing net debt 13,190 12,343 8,216 22,272 27,084 17,230 12,082
Capital employed 109,731 109,672 104,688 108,203 116,098 106,792 99,451
Additions to property, plant, equipment 6,469 8,121 5,477 10,011 4,833 6,560 8,449
Cash flow
Cash flow from operating activities 8,087 6,756 1,941 8,197 (428) 4,816 871
Gross investments (6,665) (8,639) (9,263) (3,757) (5,308) (8,816) (7,222)
Divestments (31) (1,519) 20,506 45 7 402 260
Free cash flow 1,391 (3,402) 13,184 4,485 (5,729) (3,598) (6,091)
Financial ratios
Return on capital employed (ROCE)
2
, % 7.5 9.7 9.4 10.8 11.0 10.6 29.3
FFO/adjusted net debt
3
, % 59.4 65.0 35.6 43.4 37.8 31.0 47.4
Number of outstanding shares, end of period, '000 420,068 420,068 420,066 419,985 419,985 419,985 419,985
Share price, end of period, DKK
1,025 1,244 875 765 666 689 637
Market capitalisation, end of period, DKK billion 430 522 368 321 280 290 267
Earnings per share (EPS) (BP
1
), DKK 2.8 4.9 28.6 (2.7) 8.0 1.1 3.5
Q2
2021
13,553
8,196
7,527
2,368
5,648
(489)
178
503
(12)
6,237
5,544
13,553
8,196
(1,959)
-
6,237
(72)
(466)
5,698
(154)
5,544
223,791
96,910
75,842
3,084
17,984
12,067
108,977
8,954
3,147
(12,133)
10,591
1,605
12.5
62.9
420,175
880
370
12.9
Business drivers
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Offshore
Decided (FID'ed) and installed capacity
4
, GW
9.9 9.9 9.9 9.9 9.9 9.9 9.9
Installed capacity, GW
7.6 7.6 6.8 6.8 6.8 6.8 5.6
Generation capacity, GW
4.4 4.4 4.1 3.8 3.6 3.6 3.6
Wind speed
5
, m/s
10.5 9.9 8.6 8.4 12.5 10.0 8.5
Load factor, %
50 53 35 32 60 50 37
Availability, %
95 94 94 95 93 93 93
Power generation, TWh
4.5 4.8 3.2 2.6 4.6 3.9 2.8
Power sales, TWh
6.9 8.6 6.3 5.5 8.8 7.7 7.0
Onshore
Decided (FID'ed) and installed capacity, GW
3.9 3.4 2.7 2.1 2.1 2.1 1.7
Installed capacity, GW
1.7 1.7 1.7 1.6 1.3 1.0 1.0
Wind speed
6
, m/s
7.7 8.0 6.7 8.0 7.5 7.3 6.6
Load factor, wind
6
, %
45 50 36 49 44 46 39
Availability, wind
6
, %
93 95 97 96 95 98 98
Power generation, TWh
1.6 1.8 1.2 1.6 1.1 1.0 0.9
Bioenergy & Other
Degree days, number
1,325 825 106 436 1,065 882 108
Heat generation, TWh
3.9 2.3 0.3 1.0 3.1 3.0 0.5
Power generation, TWh
2.3 1.3 0.6 0.9 1.6 1.6 0.4
Power sales, TWh
2.3 2.6 2.4 3.0 3.6 4.1 3.3
Gas sales, TWh
18.9 20.3 23.2 20.1 26.7 36.7 30.8
People and environment
Employees (FTE) end of period, number
6,311 6,179 6,120 6,731 6,608 6,526 6,454
Total recordable injury rate (TRIR)
7
3.0 3.6 3.8 3.7 3.6 4.9 4.7
Fatalities, number
0 0 0 0 0 0 0
Green share of heat and power generation, %
87 93 90 86 90 90 87
GHG intensity, g CO
2
e/kWh (scopes 1 & 2)
59 34 83 84 53 44 62
GHG emissions, Mtonnes (scope 3)
5.3 5.9 6.3 5.5 7.6 10.7 8.2
Q2
2021
9.8
7.6
4.0
7.8
29
93
2.5
4.5
4.6
2.5
7.3
45
97
2.0
487
1.1
1.5
2.2
15.1
6,472
3.1
0
93
51
4.6
Load factor, solar PV, %
29 - - - - - - -
Availability, solar PV, %
90 - - - - - - -
Income statement
The income statement (BP
1
comparables)
shows business performance numbers for
2020 to form a better like-for-like compari-
son, in line with the comparison numbers
used throughout the management’s review.
1)
Business performance.
2)
EBIT (last 12 months)/average capital employed.
3)
FFO last 12 months. Net debt including 50% of hybrid capital and
cash and securities not available for use (with the exception of repo
transactions). Numbers for 2020 and 2021 have been restated.
See
note 13 for adjusted definition.
4)
Nameplate capacity from Q2 2021.
5)
2020 numbers restated. See note 2.5 in our ESG Performance Report.
6)
US only.
7)
YTD.
22/43
Management’s review
Interim financial report First half year 2021
Consolidated
financial statements
First half 2021
1 January – 30 June
23/43
Consolidated financial statements
Interim financial report First half year 2021
Discontinued operations related to our Oil & Gas
business which was sold to INEOS in 2017. We ended
the reporting on discontinued operations as of
columns are no longer included in our financial
reporting.
Compared with the business performance principle,
the H1 2021 IFRS EBITDA was positively impacted
by DKK 645 million from hedge values that would
have been recognised as a loss under business
performance. However, as this loss has already
been recognised in prior periods under IFRS, H1 2021
was not impacted.
See note 2 ’Business performance’ for more
information.
Accounting policies
Cease the use of business performance as of
1 January 2021
From 1 January 2021, we only report IFRS numbers.
Thus, the business performance and adjustment
1 January – 30 June
1 January – 30 June
31 December 2020. Provisions regarding tax indemni-
fications and payments related to the Fredericia
stabilisation plant (DKK 705 million) were transferred
to continuing operations at 31 December 2020.
Note Income statement, DKKm H1 2021 H1 2020
4 Revenue 32,497 28,194
Cost of sales (21,754 ) (14,536 )
Other external expenses (2,106 ) (2,467 )
Employee costs (2,215 ) (2,115 )
Share of profit (loss) in associates and joint ventures 59 11
5 Other operating income 6,730 2,101
5 Other operating expenses (152 ) (147 )
Operating profit (loss) before depreciation,
amortisation, and impairment losses (EBITDA) 13,059 11,041
Amortisation, depreciation, and impairment losses on
intangible assets, and property, plant, and equipment (3,889 ) (3,581 )
Operating profit (loss) (EBIT)
Gain (loss) on divestment of enterprises (36 ) (17 )
Share of profit (loss) in associates and joint ventures (4 ) 6
6 Financial income 1,970 1,357
6 Financial expenses (2,855 ) (3,143 )
Profit (loss) before tax
10 Tax on profit (loss) for the period (1,103 ) (2,126 )
Profit (loss) for the period from continuing operations
Profit (loss) for the period from discontinued operations
Profit (loss) for the period
Profit (loss) for the period is attributable to:
Shareholders in Ørsted A/S 6,584 3,178
Interests and costs, hybrid capital owners of Ørsted A/S 575 326
Non-controlling interests (17 ) (11 )
Profit (loss) per share
1
, DKK:
From continuing operations 15.7 7.7
From discontinued operations - (0.1 )
Total profit (loss) per share 15.7 7.6
1
Diluted profit (loss) per share corresponds to profit (loss) per share, as the dilutive effect of the share incentive
programme is less than 0.1 % of the share capital.
Statement of comprehensive income, DKKm H1 2021 H1 2020
Profit (loss) for the period 7,142 3,493
Other comprehensive income:
Cash flow hedging:
Value adjustments for the period (12,759 ) (1,081 )
Value adjustments transferred to income statement 2,383 514
Value adjustments transferred to balance sheet (48 ) -
Exchange rate adjustments:
Exchange rate adjustments relating to net investments in foreign enterprises 3,357 (4,260 )
Value adjustment of net investment hedges (1,977 ) 2,111
Tax:
Tax on hedging instruments 1,846 97
Tax on exchange rate adjustments (84 ) 476
Other:
Share of other comprehensive income of associated companies, after tax 9 (7 )
Other comprehensive income (7,273 ) (2,150 )
Total comprehensive income (131 ) 1,343
Comprehensive income for the period is attributable to:
Shareholders in Ørsted A/S (800 ) 1,173
Interest payments and costs, hybrid capital owners of Ørsted A/S 575 326
Non-controlling interests 94 (156 )
Total comprehensive income (131 ) 1,343
Value adjustments for the period in H1 2021 are
mainly due to losses on power hedges due to the
increase in power prices and to a lesser extent losses
on currency and inflation hedges.
Consolidated statements of income
24/43
Consolidated financial statements
Interim financial report First half year 2021
1 April – 30 June
1 April – 30 June
Statement of comprehensive income, DKKm Q2 2021 Q2 2020
Profit (loss) for the period 5,544 (1,886 )
Other comprehensive income:
Cash flow hedging:
Value adjustments for the period (6,903 ) (471 )
Value adjustments transferred to income statement 365 448
Value adjustments transferred to balance sheet (4 ) -
Exchange rate adjustments:
Exchange rate adjustments relating to net investment in foreign enterprises (417 ) (1,991 )
Value adjustment of net investment hedges 159 963
Tax:
Tax on hedging instruments 1,222 85
Tax on exchange rate adjustments 61 203
Other:
Share of other comprehensive income of associated companies, after tax - 3
Other comprehensive income (5,517 ) (760 )
Total comprehensive income 27 (2,646 )
Comprehensive income for the period is attributable to:
Shareholders in Ørsted A/S (83 ) (2,877 )
Interest payments and costs after tax, hybrid capital owners of Ørsted A/S 160 326
Non-controlling interests (50 )
(95 )
Total comprehensive income 27 (2,646 )
Consolidated statements of income
Note Income statement, DKKm Q2 2021 Q2 2020
4 Revenue 13,553 9,962
Cost of sales (8,843 ) (6,517 )
Other external expenses (1,175 ) (1,208 )
Employee costs (1,176 ) (1,092 )
Share of profit (loss) in associates and joint ventures 21 7
5 Other operating income 5,907 514
5 Other operating expenses (91 ) (74 )
Operating profit (loss) before depreciation,
amortisation, and impairment losses (EBITDA) 8,196 1,592
Amortisation, depreciation, and impairment losses on
intangible assets, and property, plant, and equipment (1,959 ) (1,827 )
Operating profit (loss) (EBIT) 6,237 (235 )
Gain (loss) on divestment of enterprises (72 ) (3 )
Share of profit (loss) in associates and joint ventures (1 ) 3
6 Financial income 1,485 552
6 Financial expenses (1,951 ) (1,562 )
Profit (loss) before tax 5,698 (1,245 )
10 Tax on profit (loss) for the period (154 ) (625 )
Profit (loss) for the period from continuing operations 5,544 (1,870 )
Profit (loss) for the period from discontinued operations - (16 )
Profit (loss) for the period 5,544 (1,886 )
Profit (loss) for the period is attributable to:
Shareholders in Ørsted A/S 5,410 (2,201 )
Interests and costs, hybrid capital owners of Ørsted A/S 160 326
Non-controlling interests (26 ) (11 )
Profit (loss) per share, DKK:
From continuing operations 12.9 (5.2 )
From discontinued operations 0.0 0.0
Total profit (loss) per share 12.9 (5.2 )
25/43
Consolidated financial statements
Interim financial report First half year 2021
Assets and liabilities classified as held for sale
Assets classified as held for sale at 30 June 2021
comprised our oil pipe system in Denmark.
Consolidated balance sheet
Note Equity and liabilities, DKKm
30 June
2021
31 December
2020
30 June
2020
Share capital 4,204 4,204 4,204
9 Reserves (9,349 ) (1,956 ) (1,585 )
Retained earnings 80,987 74,294 67,170
Proposed dividends - 4,834 -
Equity attributable to shareholders in Ørsted A/S 75,842 81,376 69,789
Hybrid capital 17,984 13,232 13,232
Non-controlling interests 3,084 2,721 2,909
Equity 96,910 97,329 85,930
Deferred tax 3,581 2,187 3,903
Provisions 14,002 12,475 12,203
Lease liabilities 4,885 4,455 4,444
13 Bond and bank debt 34,565 34,374 32,975
Contract liabilities 3,317 3,650 3,703
Tax equity liabilities 7,876 6,780 7,595
Other payables 763 374 463
Non-current liabilities 68,989 64,295 65,286
Provisions 577 1,388 455
Lease liabilities 653 599 653
13 Bond and bank debt 9,884 2,392 2,052
12 Derivatives 23,260 6,318 5,387
Contract liabilities 386 480 435
Trade payables 10,943 9,742 12,933
Tax equity liabilities 1,298 1,187 630
Other payables 4,694 6,082 4,846
Income tax 5,509 6,220 6,048
Current liabilities 57,204 34,408 33,439
Liabilities 126,193 98,703 98,725
Liabilities relating to assets classified
as held for sale 688 687 8,469
Equity and liabilities 223,791 196,719 193,124
Note Assets, DKKm
30 June
2021
31 December
2020
30 June
2020
Intangible assets 1,037 639 504
Land and buildings 6,095 5,574 5,073
Production assets 86,533 86,184 80,463
Fixtures and fittings, tools, and equipment 529 507 588
Property, plant, and equipment under construction 44,265 29,345 27,868
Property, plant, and equipment 137,422 121,610 113,992
Investments in associates and joint ventures 668 555 542
Other securities and equity investments 222 209 227
Deferred tax 6,437 6,784 8,441
Other receivables 2,416 1,925 3,019
Other non-current assets 9,743 9,473 12,229
Non-current assets 148,202 131,722 126,725
Inventories 10,091 14,739 11,417
12 Derivatives 11,794 6,109 7,841
Contract assets 2 30 1,216
Trade receivables 6,073 6,732 4,723
Other receivables 5,073 3,720 4,294
Income tax 3,104 852 1,176
12 Securities 30,401 25,173 12,327
Cash 7,724 6,178 6,754
Current assets 74,262 63,533 49,748
Assets classified as held for sale 1,327 1,464 16,651
Assets 223,791 196,719 193,124
26/43
Consolidated financial statements
Interim financial report First half year 2021
* See note 9 ‘Reserves’ for more information about reserves.
Consolidated statement of shareholders equity
In February 2021, we issued two new hybrid capital
bonds with a nominal amount of EUR 500 million
and GBP 425 million with a fixed annual coupon of
1.50 % (until 2031) and 2.50 % (until 2033), respec-
tively. Both maturing in 3021.
In addition, we redeemed EUR 350 million of our
3013 hybrid capital bond in February 2021.
2021 2020
DKKm
Share
capital Reserves*
Retained
earnings
Proposed
dividends
Share-
holders in
Ørsted A/S
Hybrid
capital
Non-con-
trolling
interests
Total
Group
Share
capital Reserves*
Retained
earnings
Proposed
dividends
Share-
holders in
Ørsted A/S
Hybrid
capital
Non-con-
trolling
interests
Total
Group
Equity at 1 January 4,204 (1,956 ) 74,294 4,834 81,376 13,232 2,721 97,329 4,204 413 64,051 4,414 73,082 13,232 3,248 89,562
Comprehensive income
for the period:
Profit (loss) for the period - - 6,584 - 6,584 575 (17 ) 7,142 - - 3,178 - 3,178 326 (11 ) 3,493
Other comprehensive income:
Cash-flow hedging - (10,424 ) - - (10,424 ) - - (10,424 ) - (567 ) - - (567 ) - - (567 )
Exchange rate adjustments - 1,269 - - 1,269 - 111 1,380 - (2,004 ) - - (2,004 ) - (145 ) (2,149 )
Tax on other comprehensive income - 1,762 - - 1,762 - - 1,762 - 573 - - 573 - - 573
Share of other comprehensive income
of associated companies, after tax - - 9 - 9 - - 9 - - (7 ) - (7 ) - - (7 )
Total comprehensive income - (7,393 ) 6,593 - (800 ) 575 94 (131 ) - (1,998 ) 3,171 - 1,173 326 (156 ) 1,343
Coupon payments, hybrid capital - - - - - (268 ) - (268 ) - - - - - (326 ) - (326 )
Tax, hybrid capital - - - - - 89 - 89 - - - - - - - -
Additions, hybrid capital - - - - - 7,327 - 7,327 - - - - - - - -
Disposals, hybrid capital - - - - - (2,971 ) - (2,971 ) - - - - - - - -
Dividends paid - - 4 (4,834 ) (4,830 ) - (183 ) (5,013 ) - - 4 (4,414 ) (4,410 ) - (185 ) (4,595 )
Purchases of treasury shares - - - - - - - - - - (58 ) - (58 ) - - (58 )
Additions, non-controlling interests - - 83 - 83 - 450 533 - - - - - - - -
Other changes - - 13 - 13 - 2 15 - - 2 - 2 - 2 4
Equity at 30 June 4,204 (9,349 ) 80,987 - 75,842 17,984 3,084 96,910 4,204 (1,585 ) 67,170 - 69,789 13,232 2,909 85,930
27/43
Consolidated financial statements
Interim financial report First half year 2021
Change in work in progress
‘Change in work in progress’ consists of elements in
contract assets, contract liabilities, and construction
management agreements related to construction of
offshore wind farms and construction of offshore
transmission assets as well as the related trade
payables.
Statement of cash flows
Our supplementary statement of gross and net
investments appears from note 8 ’Gross and net
investments’ and free cash flows (FCF) from note 3
’Segment information’.
’Cash’ according to the balance sheet as at
30 June 2021 includes ’Cash, not available for use’,
amounting to DKK 164 million and ’Bank overdrafts
that are part of the ongoing cash management’
amounting to DKK 9 million.
Consolidated statement of cash flows
Note Statement of cash flows, DKKm H1 2021 H1 2020 Q2 2021 Q2 2020
Proceeds from raising of loans 6,865 328
(952 ) (3,311 )
Instalments on loans (1,329 ) (977 )
(1,713 ) (407 )
Instalments on leases (184 ) (226 )
(111 ) (112 )
Coupon payments on hybrid capital (268 ) (326 )
(162 ) (326 )
Repurchase of hybrid capital (2,971 ) -
Proceeds from issuance of hybrid capital 7,327 -
Dividends paid to shareholders in
Ørsted A/S (4,830 ) (4,410 ) - -
Purchase of own shares - (58 ) - (58 )
Transactions with non-controlling
interests 330 (228 ) 471 (89 )
Net proceeds from tax equity partners 25 3
(95 ) 23
Change in collateral related to
derivatives (2,177 ) 2,376 (408 ) 586
Cash flows from financing activities 2,788 (3,518 ) (2,970 ) (3,694 )
Cash flows from continuing operations 2,159 (639 )
Cash flows from discontinued operations - (44 )
Total net change in cash and cash
equivalents for the period 2,159 (683 ) 67 1,680
Cash and cash equivalents at the
beginning of the period 5,210 6,459 7,478 4,223
Total net change in cash and cash
equivalents 2,159 (683 ) 67 1,680
Exchange rate adjustments of cash and
cash equivalents 182 103 6 (24 )
Cash and cash equivalents at 30 June 7,551 5,879 7,551 5,879
Note Statement of cash flows, DKKm H1 2021 H1 2020 Q2 2021 Q2 2020
Operating profit (loss) before
depreciation, amortisation, and
impairment losses (EBITDA), IFRS 13,059 11,041 8,196 1,592
2
Change in derivatives, business
performance adjustments - (1,280 ) - 1,364
Change in derivatives, other adjustments (475 ) (514 )
Change in provisions
Reversal of gain (loss) on divestment
of assets (5,678 ) (1,288 ) (5,458 ) (71 )
Other items
(46 ) (7 ) 15 (43 )
Change in work in progress 3,754 (2,015 ) (857 ) (177 )
Change in tax equity partner liabilities 619 2,892 866 3,017
Change in other working capital 1,178 1,821 729 2,904
Interest received and similar items 933 2,326
Interest paid and similar items (1,569 ) (3,489 )
(992 ) (1,328 )
Income tax paid (1,186 ) (1,353 )
(313 ) (86 )
Cash flows from operating activities 11,234 7,769 3,147 8,197
Purchase of intangible assets,
and property, plant, and equipment (14,129 ) (9,008 ) (7,481 ) (3,770 )
Sale of intangible assets, and property,
plant, and equipment 10,177 80 10,202 57
7 Acquisition of enterprises
(2,359 ) 1 (2,348 ) (3 )
Divestment of enterprises
(145 ) (22 ) (114 ) (5 )
Purchase of other equity investments
(15 ) (11 ) (11 ) (2 )
Purchase of securities
(7,065 ) (4,133 ) (1,025 ) (593 )
Sale/maturation of securities
Change in other non-current assets
Transactions with associates and
joint ventures (26 ) (47 ) (26 ) 18
Dividends received and capital reduction
Cash flows from investing activities (11,863 ) (4,890 ) (110 ) (2,925 )
28/43
Consolidated financial statements
Interim financial report First half year 2021
Definitions of alternative performance
measures can be found on page 89 of the
annual report for 2020.
This interim financial report contains selected
accounting policies and should therefore be
read in conjunction with the annual report for
2020.
Cease the use of business performance as of
1 January 2021
From 1 January 2021, we only report IFRS
numbers. Thus, the business performance and
adjustment columns are no longer included in
our financial reporting. This will simplify our
reporting and avoid potential conflicts with
future reporting requirements for alternative
performance measures.
See note 2 ‘Business performance’ for more
information.
Implementation of new or changed
accounting standards and interpretations
Effective from 1 January 2021, we implemented
the following changed accounting standard
(IAS and IFRS) and interpretations:
Amendments to IFRS 9 and IFRS 7: Interest
Rate Benchmark Reform — phase 2.
The adoption of the changed accounting
standard has not impacted our interim
financial report and is not expected to impact
the consolidated financial statements for 2021.
This section provides an overall description of
our accounting policies as well as an overview
of the impact of new and amended accounting
standards and interpretations.
Accounting policies
Ørsted is a listed public company, headquar-
tered in Denmark .
This interim financial report for the first half-
year of 2021 comprises the interim financial
statements of Ørsted A/S (the parent
company) and any subsidiaries controlled by
Ørsted A/S.
The interim financial report has been prepared
in accordance with the International Financial
Reporting Standards (IFRS), IAS 34 ’Interim
Financial Reporting’ as adopted by the EU, and
further requirements in the Danish Financial
Statements Act (Årsregnskabsloven) for the
presentation of quarterly interim reports by
listed companies.
The interim financial report for the first half
year of 2021 follows the same accounting
policies as the annual report for 2020, except
for any new, amended, or revised accounting
standards and interpretations (IFRSs) endorsed
by the EU, effective for the accounting period
beginning on 1 January 2021.
Any new or amended standards and interpre-
tations that may impact Ørsted are presented
in the section below.
1. Basis of reporting
Key accounting estimates and judgements
On 9 June 2021, we acquired all of the mem-
bership interests in Brookfield Renewable
Ireland, effectively gaining control of the
company, which has been incorporated in our
Onshore business area.
We have made a number of estimates and
judgements when we recognised the assets
and liabilities as a result of the acquisition. The
accounting estimates and judgements, which
may entail a risk of material adjustments in
subsequent years, are listed below. Except for
the below mentioned accounting estimate for
purchase price allocations in business
combinations, the assessment of the key
accounting estimates and judgements are the
same as in the annual report for 2020.
Purchase price allocations in business
combinations
When we apply the acquisition method for
business combinations, by nature this involves
judgement in assessing the fair value of
identifiable assets and liabilities. Fair value
calculations are based on a number of
estimates regarding WACC and expected
future cash flows from financial budgets and
forecasts which include a number of
assumptions and estimates. These
assumptions include future market conditions,
market prices of power, estimated discount
rates, estimated useful lives of the projects,
etc. The market prices applied are based on
available forward prices for a period of up to
five years and our best estimate of long-term
prices for the remainder of the period.
29/43
Consolidated financial statements
Interim financial report First half year 2021
At the end of 2020, the value of our business
performance hedges deferred to a future
period was DKK -2.7 billion, of which
DKK -1.1 billion relate to 2021. This net loss was
recognised in the income statement under IFRS
in previous years, as we have not previously
applied hedge accounting.
Consequently, for the period 2021-2025,
EBITDA (according to IFRS) will be higher by a
similar amount compared to what the
business performance EBITDA would have
been if we had continued to report based on
this principle. For H1 2021, EBITDA according to
IFRS was DKK 645 million higher than if we had
kept reporting according to the business
performance principle. This amount primarily
related to site EBITDA in Offshore and the
remaining part related to our CHP plants and
gas activities in Bioenergy & Other.
With the implementation of IFRS 9 in 2018, it
has become significantly easier to apply IFRS
hedge accounting to our commodity hedges.
We have concluded that IFRS 9 can replace
our business performance principle, and we
have therefore reported based on IFRS only
from 1 January 2021.
Among other things, IFRS 9 has made it easier
to apply hedge accounting by the removal of
the 80-125 % effectiveness requirement, as
compliance can be difficult in connection with
proxy hedging. For example, we use proxy
hedging to hedge our power exposure 4-5
years into the future with gas hedges due to
illiquidity in the market for power hedges with
this time horizon.
Since we did not apply IFRS hedge accounting
in 2020, the IFRS 2021 numbers are not fully
comparable to the IFRS 2020 numbers. There-
fore, we use EBITDA according to the business
performance principle in 2020 as comparable
for EBITDA in the ‘Management’s review’ for
2021.
2. Business performance
H1 2020
DKKm
Business
performance Adjustments IFRS
Revenue 27,001 1,193 28,194
Cost of sales (14,623) 87 (14,536)
Operating profit (loss) before depreciation, amortisation,
and impairment losses (EBITDA) 9,761 1,280 11,041
EBIT 6,180
1,280
7,460
Tax on profit (loss) for the period (1,846) (280) (2,126)
Profit for the year 2,493 1,000 3,493
The installation of the 16th turbine
at Hornsea 2 which also marked
Ørsted’s 1,000th offshore wind
turbine in UK waters, UK.
30/43
Consolidated financial statements
Interim financial report First half year 2021
The column ’Other activities/eliminations’ primarily
covers the elimination of inter-segment transactions.
It also includes income and costs, assets and
liabilities, investment activity, taxes, etc., handled at
Group level.
1
Including the elimination of other activities, the total
elimination of intra-group revenue amounts to
DKK 3,824 million, which primarily relates to our
Shared Functions services as well as our B2B
business activities.
3. Segment information
New corporate structure
On 28 January 2021, we announced a change
to our organisational structure effective from
4 February 2021. The change entails moving
from a business unit structure to a more
functional structure where the commercially
focused functions from the former business
units Offshore and Markets & Bioenergy will
be brought together. Onshore will remain a
separate business unit. We are making these
changes in our organisation to establish an
even stronger customer and market focus, to
further strengthen the focus on EPC and
operations, and to support the scaling of our
organisation as we continue our strong
growth trajectory.
Externally, we will continue to report
Offshore and Onshore financials as we have
done previously. Our former Markets &
Bioenergy will be named ‘Bioenergy & Other’
going forward and will, as previously, include
our CHP plants, legacy gas activities, B2B
activities and Renescience activities.
H1 2021
Income statement, DKKm Offshore Onshore
Bioenergy
& Other
Reportable
segments
Other
activities/
eliminations Total
External revenue 19,284 227 12,992 32,503 (6) 32,497
Intra-group revenue 2,941 - (405) 2,536 (2,536)
1
-
Revenue 22,225 227 12,587 35,039 (2,542) 32,497
Cost of sales (13,801) (9) (10,438) (24,248) 2,494 (21,754)
Employee costs and other external expenses (2,978) (422) (1,026) (4,426) 105 (4,321)
Gain (loss) on disposal of non-current assets 5,678 - - 5,678 - 5,678
Additional other operating income and expenses 291 610 1 902 (2) 900
Share of profit (loss) in associates and joint ventures 58 - 1 59 - 59
EBITDA 11,473 406 1,125 13,004 55 13,059
Depreciation and amortisation
(3,049) (329) (394)
(3,772)
(117)
(3,889)
Impairment losses
- - -
-
-
-
Operating profit (loss) (EBIT) 8,424 77 731 9,232 (62) 9,170
Key ratios
Intangible assets, and property, plant, and equipment 94,777 34,380 7,901 137,058 1,401 138,459
Equity investments and non-current receivables 543 35 157 735 167 902
Net working capital, work in progress 6,463 - - 6,463 - 6,463
Net working capital, tax equity - (8,338) - (8,338) - (8,338)
Net working capital, capital expenditures (3,764) (1,203) (24) (4,991) - (4,991)
Net working capital, other items 3,161 367 (2,008) 1,520 179 1,699
Derivatives, net (6,594) (3,223) (2,790) (12,607) 1,141 (11,466)
Assets classified as held for sale, net - - 654 654 - 654
Decommissioning obligations (5,482) (1,003) (1,283) (7,768) - (7,768)
Other provisions (3,928) (105) (1,946) (5,979) (832) (6,811)
Tax, net 2,347 (2,902) 1,064 509 (58) 451
Other receivables and other payables, net 339 (40) 2 301 (578) (277)
Capital employed at 30 June 87,862 17,968 1,727 107,557 1,420 108,977
Return on capital employed (ROCE), % - - - - - 12.5
Cash flow from operating activities 6,507 411 4,293 11,211 23 11,234
Gross investments (10,360) (8,280) (89) (18,729) (69) (18,798)
Divestments 10,669 - (203) 10,466 94 10,560
Free cash flow (FCF) 6,816 (7,869) 4,001 2,948 48 2,996
31/43
Consolidated financial statements
Interim financial report First half year 2021
Profit (loss) and cash flows are
shown only for continuing
operations.
The column ‘Other activities/
eliminations’ primarily covers the
elimination of inter-segment
transactions. It also includes
income and costs, assets and
liabilities, investment activity,
taxes, etc., handled at Group level.
1
Including the elimination of other
activities, the total elimination of
intra-group revenue amounts to
DKK 3,440 million, which primarily
relates to our Shared Functions
services as well as our B2B, B2C,
and power distribution businesses
activities.
3. Segment information (continued)
H1 2020
Income statement, DKKm Offshore Onshore
Bioenergy
& Other
Reportable
segments
Other
activities/
eliminations
Business
performance Adjustments IFRS
External revenue 15,066 302 11,627 26,995 6 27,001 1,193 28,194
Intra-group revenue 2,273 (5) (223) 2,045 (2,045)
1
- - -
Revenue 17,339 297 11,404 29,040 (2,039) 27,001 1,193 28,194
Cost of sales (7,853) 5 (8,706) (16,554) 1,931 (14,623) 87 (14,536)
Employee costs and other external expenses (2,892) (315) (1,635) (4,842) 260 (4,582) - (4,582)
Gain (loss) on disposal of non-current assets 1,217 34 37 1,288 - 1,288 - 1,288
Additional other operating income and expenses 171 478 18 667 (1) 666 - 666
Share of profit (loss) in associates and joint ventures 11 - - 11 - 11 - 11
EBITDA 7,993 499 1,118 9,610 151 9,761 1,280 11,041
Depreciation and amortisation
(2,860) (207) (400)
(3,467)
(114)
(3,581)
-
(3,581)
Impairment losses
- - -
-
-
-
-
-
Operating profit (loss) (EBIT) 5,133 292 718 6,143 37 6,180 1,280 7,460
Key ratios
Intangible assets, and property, plant, and equipment 85,620 18,819 8,306 112,745 1,751 114,496 - 114,496
Equity investments and non-current receivables 1,849 - 239 2,088 153 2,241 - 2,241
Net working capital, work in progress 10,029 - 1 10,030 - 10,030 - 10,030
Net working capital, tax equity - (7,588) - (7,588) - (7,588) - (7,588)
Net working capital, capital expenditures (9,006) (89) (26) (9,121) - (9,121) - (9,121)
Net working capital, other items 3,777 80 (2,964) 893 199 1,092 - 1,092
Derivatives, net 552 (241) 2,007 2,318 136 2,454 - 2,454
Assets classified as held for sale, net - - 8,182 8,182 - 8,182 - 8,182
Decommissioning obligations (4,797) (383) (1,310) (6,490) - (6,490) - (6,490)
Other provisions (3,797) - (1,639) (5,436) (732) (6,168) - (6,168)
Tax, net 717 (1,990) 856 (417) 83 (334) - (334)
Other receivables and other payables, net (633) - 18 (615) 24 (591) - (591)
Capital employed at 30 June 84,311 8,608 13,670 106,589 1,614 108,203 - 108,203
Of which, capital employed for discontinued operations (34) - (34)
Of which, capital employed for continuing operations 108,237 - 108,237
Return on capital employed (ROCE), % - - - - - 10.8 - -
Cash flow from operating activities 2,785 3,162 2,374 8,321 (552) 7,769 - 7,769
Gross investments (7,094) (1,481) (423) (8,998) (67) (9,065) - (9,065)
Divestments (141) 114 80 53 (1) 52 - 52
Free cash flow (FCF) (4,450) 1,795 2,031 (624) (620) (1,244) - (1,244)
32/43
Consolidated financial statements
Interim financial report First half year 2021
Profit (loss) and cash flows are
shown only for continuing
operations.
The column ‘Other activities/
eliminations’ primarily covers the
elimination of inter-segment
transactions. It also includes
income and costs, assets and
liabilities, investment activity,
taxes, etc., handled at Group level.
1
Including the elimination of other
activities, the total elimination of
intra-group revenue amounts to
DKK 1,892 million (Q2 2020:
DKK 1,560 million), which primarily
relates to our Shared Functions
services as well as our B2B
businesses and for Q2 2020 our
B2C, and power distribution
business activities as well.
3. Segment information (continued)
Q2 2020, Income statement and FCF, DKKm
External revenue 8,377 165 4,003 12,545 (920) 11,625 (1,663) 9,962
Intra-group revenue 987 (5) (108) 874 (874)
1
- - -
Revenue 9,364 160 3,895 13,419 (1,794) 11,625 (1,663) 9,962
Cost of sales (5,594) 5 (2,985) (8,574) 1,758 (6,816) 299 (6,517)
Employee costs and other external expenses (1,512) (157) (767) (2,436) 136 (2,300) - (2,300)
Gain (loss) on disposal of non-current assets - 34 37 71 - 71 - 71
Additional other operating income and expenses 95 270 6 371 (2) 369 - 369
Share of profit (loss) in associates and joint ventures 8 - (1) 7 - 7 - 7
EBITDA 2,361 312 185 2,858 98 2,956 (1,364) 1,592
Depreciation and amortisation (1,452) (109) (208) (1,769) (58) (1,827) - (1,827)
Impairment losses - - - - - - - -
Operating profit (loss) (EBIT) 909 203 (23) 1,089 40 1,129 (1,364) (235)
Cash flow from operating activities 4,338 3,209 817 8,364 (167) 8,197 - 8,197
Gross investments (2,802) (733) (179) (3,714) (43) (3,757) - (3,757)
Divestments (150) 114 81 45 - 45 - 45
Free cash flow (FCF) 1,386 2,590 719 4,695 (210) 4,485 - 4,485
Q2 2021, Income statement and FCF, DKKm Offshore Onshore
Bioenergy
& Other
Reporting
segments
Other
activities/
eliminations
Business
performance Adjustments IFRS
External revenue 7,565 93 5,709 13,367 186 13,553
Intra-group revenue 1,375 14 (142) 1,247 (1,247)
1
-
Revenue 8,940 107 5,567 14,614 (1,061) 13,553
Cost of sales (5,306) (4) (4,556) (9,866) 1,023 (8,843)
Employee costs and other external expenses (1,618) (249) (512) (2,379) 28 (2,351)
Gain (loss) on disposal of non-current assets 5,458 - - 5,458 - 5,458
Additional other operating income and expenses 33 324 3 360 (2) 358
Share of profit (loss) in associates and joint ventures 20 - 1 21 - 21
EBITDA 7,527 178 503 8,208 (12) 8,196
Depreciation and amortisation (1,502) (201) (194) (1,897) (62) (1,959)
Impairment losses - - - - - -
Operating profit (loss) (EBIT) 6,025 (23) 309 6,311 (74) 6,237
Cash flow from operating activities 1,301 857 1,275 3,433 (286) 3,147
Gross investments (5,793) (6,275) (30) (12,098) (35) (12,133)
Divestments 10,702 (1) (174) 10,527 64 10,591
Free cash flow (FCF) 6,210 (5,419) 1,071 1,862 (257) 1,605
33/43
Consolidated financial statements
Interim financial report First half year 2021
Revenue increased by 15 % relative to H1
2020 and was DKK 32,497 million in H1 2021.
The increase was mainly due to the divest-
ment of the offshore transmission asset at
Hornsea 1 in H1 2021 and higher gas and
power prices across all markets. This was
partly offset by lower wind speeds in H1 2021,
the divestments of the LNG business, the
Danish distribution, residential customer, and
city light businesses in 2020, and the divest-
ment of the offshore transmission asset for
Walney Extension in H1 2020.
4. Revenue
On 1 January 2021, we implemented hedge
accounting on our commodity and related currency
hedges. Accordingly, our hedges are presented in the
same line item as the hedged exposure. For example,
when we hedge generation of power, any gain (loss)
related to the hedges is presented in the line item
‘Generation of power’.
Revenue, DKKm Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
H1 2021
total Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
H1 2020
total
Sale of gas - - 5,424 4 5,428 - - 3,915 5 3,920
Generation of power 3,376 349 2,306 - 6,031 2,023 222 840 - 3,085
Sale of power 7,540 - 2,521 (2,398) 7,663 4,684 - 3,059 (2,070) 5,673
Revenue from construction of offshore wind farms 5,135 - - - 5,135 3,049 - - - 3,049
Generation and sale of heat and steam - - 1,609 - 1,609 - - 1,602 - 1,602
Distribution and transmission - - 157 (1) 156 - - 1,128 (2) 1,126
Other revenue 1,193 - 111 (23) 1,281 931 26 453 (39) 1,371
Total revenue from customers, IFRS 17,244 349 12,128 (2,418) 27,303 10,687 248 10,997 (2,106) 19,826
Government grants 4,661 5 393 - 5,059 6,121 17 204 - 6,342
Economic hedging - - - - - 2,307 32 (280) 216 2,275
Miscellaneous revenue 320 (127) 66 (124) 135 (12) (24) (329) 116 (249)
Total revenue, IFRS 22,225 227 12,587 (2,542) 32,497 19,103 273 10,592 (1,774) 28,194
Adjustments (1,764) 24 812 (265) (1,193)
Total revenue, business performance 17,339 297 11,404 (2,039) 27,001
Timing of revenue recognition from customers, IFRS
At a point in time 13,123 349 4,160 (2,418) 15,214 5,576 248 1,635 (2,106) 5,353
Over time 4,121 - 7,968 - 12,089 5,111 - 9,362 - 14,473
Total revenue from customers, IFRS 17,244 349 12,128 (2,418) 27,303 10,687 248 10,997 (2,106) 19,826
34/43
Consolidated financial statements
Interim financial report First half year 2021
4. Revenue (continued)
Revenue, DKKm Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
Q2 2021
total Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
Q2 2020
total
Sale of gas - - 2,456 97 2,553 - - 1,245 (2) 1,243
Generation of power 1,207 104 1,172 - 2,483 687 123 323 -
1,133
Sale of power 5,186 - 1,104 (1,049) 5,241
3,146 - 1,365 (1,848) 2,663
Revenue from construction of offshore wind farms 34 - - - 34
2,486 - - - 2,486
Generation and sale of heat and steam - - 416 - 416
- - 454 - 454
Distribution and transmission - - 76 - 76
- - 468 (1) 467
Other revenue 623 - 74 (16) 681 511 13 164 (31) 657
Total revenue from customers, IFRS 7,050 104 5,298 (968) 11,484 6,830 136 4,019 (1,882) 9,103
Government grants 1,663 3 166 - 1,832 2,296 6 40 - 2,342
Economic hedging - - - - - (636) 8 (329) 489 (468)
Miscellaneous revenue 227 - 103 (93) 237 (19) (16) (1,068) 88 (1,015)
Total revenue, IFRS 8,940 107 5,567 (1,061) 13,553 8,471 134 2,662 (1,305) 9,962
Adjustments 893 26 1,233 (489) 1,663
Total revenue, business performance 9,364 160 3,895 (1,794) 11,625
Timing of revenue recognition from customers, IFRS
At a point in time 3,334 104 2,093 (968) 4,563 2,696 136 (529) (1,882) 421
Over time 3,716 - 3,205 - 6,921 4,134 - 4,548 - 8,682
Total revenue from customers, IFRS 7,050 104 5,298 (968) 11,484 6,830 136 4,019 (1,882) 9,103
35/43
Consolidated financial statements
Interim financial report First half year 2021
5. Other operating
income and expenses
Gain on divestment of assets in H1 2021
primarily relates to the 50 % farm-down of
Borssele 1 & 2 in May, resulting in a gain from
new partnerships of DKK 5.4 billion.
Remaining gains in H1 2021 were related to
earnings from finalised construction projects.
In H1 2020, gain on divestment of assets was
mainly related to the Hornsea 1 offshore
transmission asset where we lowered our
assumption regarding the preferred bidder’s
expected return requirement.
Other compensation is primarily compensa-
tions regarding outages and curtailments
from TenneT, the German grid operator.
US tax credits and tax equity income originate
from our US onshore wind farms in operation
and correspond to the tax credits and other
tax attributes provided to Ørsted and our tax
equity partners for generated power. The
increase was mainly due to commissioning of
new onshore wind farms in 2020 which have
had full impact in H1 2021.
6. Financial income
and expenses
The table shows net financial income and expenses
corresponding to our internal control.
Exchange rate adjustments and hedging contracts
entered into to hedge currency risks are presented
net under the item ’Exchange rate adjustments, net’.
Other operating income, DKKm H1 2021 H1 2020 Q2 2021 Q2 2020
Gain on divestment of assets 5,754 1,332 5,499 99
Other compensation 229 127 66 10
US tax credits and tax equity income 595 477 312 269
Miscellaneous operating income 152 165 30 136
Total other operating income 6,730 2,101 5,907 514
Other operating expenses, DKKm H1 2021 H1 2020 Q2 2021 Q2 2020
Loss on divestment of assets 76 44 41 28
Miscellaneous operating expenses 76 103 50 46
Total other operating expenses 152 147 91 74
Net financial income and expenses, DKKm H1 2021 H1 2020 Q2 2021 Q2 2020
Interest expenses, net (409) (886) (139) (508)
Interest expenses, leasing (101) (97) (51) (53)
Interest element of provisions, etc. (201) (221) (101) (108)
Tax equity partner's contractual return (309) (209) (161) (118)
Capital losses on early repayment of loans and
interest rate swaps - (369) - (369)
Value adjustments of derivatives, net 117 (72) 26 (30)
Exchange rate adjustments, net 290 195 59 (3)
Value adjustments of securities, net (378) (131) (115) 191
Other financial income and expenses 106 4 16 (12)
Net financial income and expenses (885) (1,786) (466) (1,010)
36/43
Consolidated financial statements
Interim financial report First half year 2021
Since the acquisition date, BRI has contributed
with a revenue of DKK 25 million and a loss
after tax of DKK 54 million. If the acquisition
had been made on 1 January 2021, the half-
year revenue would have been DKK 438
million, and loss after tax would have been
DKK 75 million.
As part of the acquisition process, we have
incurred costs of DKK 49 million which have
On 9 June 2021, we acquired all of the
membership interests in Brookfield Renewable
Ireland (BRI), Brookfield Renewable’s onshore
wind business in Ireland and UK, at an
enterprise value of DKK 4,617 million. With the
acquisition of BRI, Ørsted enters the European
onshore market. BRI’s management team
continue to run the business, which will be
incorporated into our Onshore business unit
over time.
been expensed in our income statement in the
Onshore segment.
The fair values of the assets and liabilities
acquired are not considered final until
12 months after acquisition date.
We made no acquisitions in H1 2020.
7. Acquisition of enterprises
Cash flows used for acquisitions, DKKm BRI Other H1 2021 H1 2020 Q2 2021 Q2 2020
Fair value at time of acquisition:
Other intangible assets than goodwill 452 - 452 - 452 -
Property, plant, and equipment 5,182 - 5,182 - 5,182 -
Joint ventures 33 - 33 - 33 -
Trade receivables 236 - 236 - 236 -
Other receivables 163 - 163 - 163 -
Cash 146 - 146 - 146 -
Interest-bearing debt (2,273) - (2,273) - (2,273) -
Provisions (47) - (47) - (47) -
Derivatives (456) - (456) - (456) -
Deferred tax (634) - (634) - (634) -
Other liabilities (312) - (312) - (312) -
Net assets acquired 2,490 - 2,490 - 2,490 -
Goodwill - - - -
Purchase price 2,490 - 2,490 - 2,490 -
Cash, available and acquired (142) - (142) - (142) -
Contingent consideration - 11 11 (1) - 3
Cash flow used for acquisition of enterprises 2,348 11 2,359 (1) 2,348 3
Purchase price 2,490 - 2,490 - 2,490 -
Adjustments for cash (146) - (146) - (146) -
Adjustments for interest-bearing debt 2,273 - 2,273 - 2,273 -
Enterprise value 4,617 - 4,617 - 4,617 -
37/43
Consolidated financial statements
Interim financial report First half year 2021
9. Reserves
8. Gross and net
investments
Amazon Wind,
Scurry County,
Texas US.
Reserves 2020, DKKm
Foreign
currency
translation
reserve
Hedging
reserve
Total
reserves
Reserves at 1 January 2020 168 245 413
Exchange rate adjustments (4,115) - (4,115)
Value adjustments of hedging reserve - 1,030 1,030
Value adjustments transferred to:
Revenue - 53 53
Financial income and expenses - 461 461
Tax:
Tax on hedging and currency adjustments 940 (367) 573
Movement in comprehensive income for the period (3,175) 1,177 (1,998)
Total reserves at 30 June (3,007) 1,422 (1,585)
Reserves 2021, DKKm
Foreign
currency
translation
reserve
Hedging
reserve
Total
reserves
Reserves at 1 January 2021 (3,829) 1,873 (1,956)
Exchange rate adjustments 3,246 - 3,246
Value adjustments of hedging reserve - (14,736) (14,736)
Value adjustments transferred to:
Revenue - 2,364 2,364
Financial income and expenses - 19 19
Property, plant, and equipment - (48) (48)
Tax:
Tax on hedging and currency adjustments (519) 2,281 1,762
Movement in comprehensive income for the period 2,727 (10,120) (7,393)
Total reserves at 30 June (1,102) (8,247) (9,349)
Gross and net investments, DKKm H1 2021 H1 2020 Q2 2021 Q2 2020
Cash flow from investing activities (11,863) (4,890) (110) (2,925)
Dividends received and capital reductions
reversed (28) - (28) -
Purchase and sale of securities, reversed 5,419 (4,117) 362 (780)
Sale of non-current assets, reversed (10,057) (58) (10,088) (52)
Interest-bearing debt in acquired enterprises (2,273) - (2,273) -
Restricted cash in acquired enterprises 4 - 4 -
Gross investments (18,798) (9,065) (12,133) (3,757)
Transactions with non-controlling interests
in connection with divestments 503 (6) 503 (7)
Sale of non-current assets 10,057 58 10,088 52
Divestments 10,560 52 10,591 45
Net investments (8,238) (9,013) (1,542) (3,712)
’Value adjustments of hedging reserve’ in H1 2021
are mainly due to losses on power hedges due to
the increase in power prices and to a lesser extent
losses on currency and inflation hedges.
38/43
Consolidated financial statements
Interim financial report First half year 2021
Tax on profit (loss) for the period
Tax on profit (loss) was DKK 1,103 million in
H1 2021 compared to DKK 2,126 million in
H1 2020. The effective tax rate for the first
half year of 2021 was 13 %.
The effective tax rate was affected by the
farm-down of Borssele and recognition of
deferred tax liabilities in the US related to tax
equity partnerships for offshore wind farms in
our north-east cluster, for Ocean Wind, and
for Permian Energy Center. The deferred tax
liabilities will increase until COD.
Also, the effective tax rate was affected by
an updated management assessment on
uncertain tax positions, the enacted increase
of the UK tax rate from 19 % to 25 %, and the
winter storm in Texas in February 2021 as we
incurred hedge income in entities with no tax
equity partnership agreements in place.
Tax controversies
On 28 April 2021, Ørsted received a draft
administrative decision from the Danish Tax
Agency in relation to the development of the
offshore wind farm Race Bank. In line with its
Effective tax rate
The estimated average annual tax rate for the
’Remaining Ørsted business activities’ is 21 %
compared to 22 % for the full-year of 2020.
‘Other adjustments’ include changes in tax rates,
movements in uncertain tax positions, tax concerning
previous years, and other non-taxable income and
non-deductible costs.
The effective tax is calculated on the basis of the
profit (loss) before tax from continuing operations.
Accounting policies
Effective tax rate
The estimated average annual tax rate is
separated based on regions and into two different
categories: a) ordinary business activities and
b) gain (loss) on divestments and impacts from tax
equity contributions.
10. Tax on profit (loss) for the period
administrative decision from 1 December
2020 regarding the Walney Extension and
Hornsea 1 offshore wind farms, the Danish Tax
Agency claims that Ørsted Wind Power A/S
has not acted at arm’s length terms when
charging fees for technical development
services provided to the Race Bank project
company. If the draft decision is finalised, it
entails an additional Danish tax payment of
DKK 2.5 billion plus interest for the income
year 2015. As part of the process, Ørsted is
given time and the opportunity to make
submissions before the Danish Tax Agency
makes a final decision in the matter.
In response to the tax risks connected to
cross-border activities, including the current
controversy regarding the pricing of technical
development service fees, we have made
tax-related provisions in accordance with
IAS 12 and IAS 37 as well as relevant
interpretation, such as IFRIC 23. The provisions
have been calculated on the basis of
differences in tax rates and statistical risks of
suffering economic or legal double taxation.
H1 2021 H1 2020
Tax for the period, DKK
Profit (loss)
before tax Tax Tax in %
Profit (loss)
before tax Tax Tax in %
Deferred tax liability, new tax equity contributions (788) n.a. (885) n.a.
Gain (loss) on divestment of enterprises 5,355 - 0 % - - n.a.
Other adjustments 319 n.a. (23) n.a.
Remaining Ørsted business activities 2,890 (634) 22 % 5,663 (1,218) 22 %
Effective tax for the period 8,245 (1,103) 13 % 5,663 (2,126) 38 %
39/43
Consolidated financial statements
Interim financial report First half year 2021
For USD and NTD, we manage our
risk to a natural time spread bet-
ween front-end capital expenditures
and long-term revenue. In the five-
year horizon, we are therefore seeing
that our hedges increase our net
exposure to USD, but in the longer
horizon, our hedges reduce the USD
risk.
We do not deem EUR to constitute a
risk, as we expect Denmark to
maintain its fixed exchange-rate
policy.
Our power exposure before hedges
have increased approx. 30 % in Q2
2021, mainly due to the increase in
power prices.
Energy exposure 1 July 2021 - 30 June 2026, DKKbnCurrency exposure 1 July 2021 - 30 June 2026, DKKbn
11. Market risks
The table shows the time of the
transfer of the market value of
hedging contracts to EBITDA.
Expected value for recognition in EBITDA, DKKbn
Market risk management
Our most significant market risks relate to:
energy prices
foreign exchange rates
interest and inflation.
We manage market risks to protect Ørsted
against market price volatility and to ensure
stable and robust financial ratios that support
our growth strategy as well as protect the
value of our assets. In the short- to medium-
term horizon, we primarily hedge future prices
using derivatives to reduce cash flow
fluctuations after tax. Minimum hedging levels
are determined by the Board of Directors. In
the first two years, we are almost fully
hedged. The degree of hedging declines in
subsequent years. For more details on our
market risks please see note 7.1 ’Market risks’
in the annual report for 2020.
40/43
Consolidated financial statements
Interim financial report First half year 2021
CFO. The market value developments are
monitored on a continuous basis and reported
to the Executive Committee.
’Quoted prices’ comprise gas and derivatives
that are traded in active markets. Where
derivatives are traded in an active market, we
generally have daily settlements, which is why
the market value is zero.
‘Observable input’ comprises securities and
derivatives, for which valuation models with
Valuation principles and key assumptions
In order to minimise the use of subjective
estimates or modifications of parameters
and calculation models, it is our policy to
determine fair values based on the external
information that most accurately reflects the
market values. We use pricing and benchmark
services to increase data quality.
Market values are determined by the Risk
Management function which reports to the
The table shows the move-
ments during the year in the
total market value (assets
and liabilities) of derivatives
valued on the basis of non-
observable inputs.
The main non-observable
input is German power pri-
ces in the period 2025-2034.
The avarage power price for
the period is estimated at
EUR 62.14 per MWh, based
on an inflation-adjusted
extrapolation of the obser-
vable price. An increase or
decrease in the German
power prices of 10 % would
impact the fair value by +/-
DKK 455 million.
12. Fair value measurement
observable inputs are used to measure fair
value. The majority of our securities are quoted
Danish mortgage or government bonds. Since
these are not always traded on a daily basis,
we are valuing these based on market interest
rates for similar bonds. ‘Non-observable input’
primarily comprises long-term contracts on the
purchase or sale of power and gas. The fair
values are based on assumptions, including the
long-term prices of power and gas as well as
risk premiums in respect of liquidity and
market risks. Since there are no active markets
for long-term prices, the fair value has been
determined through an estimate of future
prices.
Normally, the energy price can be observed for
a maximum of five years in the power market,
after which an active market no longer exists.
Beyond the five-year horizon, the energy price
is thus projected on the basis of the observable
forward prices for years one to five.
Assets Liabilities
Fair value hierarchy
DKKm Inventories Securities Derivatives Derivatives
2021
Quoted prices 340 - 4,016 5,268
Observable input - 30,401 7,587 16,551
Non-observable input - - 191 1,441
Total 30 June 2021 340 30,401 11,794 23,260
2020
Quoted prices 285 - 8 30
Observable input - 12,327 7,476 5,298
Non-observable input - - 357 59
Total 30 June 2020 285 12,327 7,841 5,387
Derivatives valued on the basis of
non-observable input, DKKm 2021 2020
Market value at 1 January (82) 236
Value adjustments through profit or loss (326) 240
Value adjustments through other
comprehensive income (623) -
Sales/redemptions 18 (205)
Purchases/issues (229) 27
Transferred to observable input (8) -
Market value at 30 June
(1,250)
298
Non-observable input per commodity
price input, DKKm 2021 2020
German power prices (820) -
Other power prices (341) 63
Gas prices (89) 235
Total (1,250) 298
41/43
Consolidated financial statements
Interim financial report First half year 2021
Comparative figures
are restated in
accordance with the
new definition of FFO
and adjusted interest-
bearing net debt
(NIBD).
Adjusted definition of FFO and adjusted
interest-bearing net debt (NIBD)
We have adjusted our definition of FFO and
adjusted NIBD to better align with the rating
agencies.
Generally, we are now adjusting FFO for the
cash flow effects instead of the profit and loss
effects. Further, adjusted NIBD no longer inclu-
des the decommissioning obligation.
Market value of bond and bank debt
The market values of bond and bank debts
were DKK 41.5 billion and DKK 8.5 billion,
respectively, at 30 June 2021.
Interest-bearing net debt totalled DKK 12,067 mil-
lion at 30 June 2021, which was a decrease of DKK
276 million relative to 31 December 2020. The main
changes in the composition of our net debt
compared to 31 December 2020 was an increase in
bank debt of DKK 6,612 million which was partly
countered by an increase in securities of DKK 5,228
million. The increase in bank debt is mainly related
to an increase in short-term repo loans.
The table shows
which items are
included in the
adjusted interest-
bearing debt.
13. Interest-bearing debt and FFO
We have adjusted our
target FFO/adjusted
NIBD from above
30 % to above 25 %
to be in line with the
rating agencies.
Interest-bearing debt and interest-bearing assets
DKKm
30 June
2021
31 December
2020
30 June
2020
Interest-bearing debt:
Bank debt 8,554 1,942 3,520
Bond debt 35,895 34,824 31,507
Total bond and bank debt 44,449 36,766 35,027
Tax equity liability 836 721 638
Lease liability 5,538 5,054 5,097
Other interest-bearing debt 940 1,906 1,690
Total interest-bearing debt 51,763 44,447 42,452
Interest-bearing assets:
Securities 30,401 25,173 12,327
Cash 7,724 6,178 6,754
Other receivables 829 11 1,099
Receivables in connection with divestments 742 742 -
Total interest-bearing assets 39,696 32,104 20,180
Total interest-bearing net debt 12,067 12,343 22,272
Funds from operations (FFO) LTM
1
DKKm
30 June
2021
31 December
2020
30 June
2020
EBITDA
2
21,423 18,124 18,489
Change in provisions and other
adjustments 606 (403) (1,003)
Reversal of gain (loss) on divestment
of assets (5,196) (805) (878)
Income tax paid (952) (1,118) (1,296)
Interest and similar items,
received/paid
(1,301) (1,829) (1,439)
Reversal of interest expenses
transferred to assets
(545) (449) (377)
50 % of coupon payments on
hybrid capital
(215) (245) (278)
Dividends received and
capital reductions
46 18 15
Funds from operations (FFO) 13,866 13,293 13,233
1
Last 12 months.
2
EBITDA according to business performance up until the end of 2020.
Adjusted interest-bearing net debt
DKKm
30 June
2021
31 December
2020
30 June
2020
Total interest-bearing net debt 12,067 12,343 22,272
50 % of hybrid capital 8,992 6,616 6,616
Cash and securities not available
for distribution, excluding repo loans 977 1,485 1,628
Total adjusted interest-bearing
net debt 22,036 20,444 30,516
Funds from operations (FFO)/
adjusted interest-bearing net debt
30 June
2021
31 December
2020
30 June
2020
Funds from operations (FFO)/
adjusted interest-bearing net debt 62.9 % 65.0 % 43.4 %
42/43
Consolidated financial statements
Interim financial report First half year 2021
*Employee representative
Executive Board:
Board of Directors:
Statement by the Executive Board
and the Board of Directors
43/43
Consolidated financial statements
Interim financial report First half year 2021
Forward-looking statements
Forward-looking statements
This report contains certain forward-looking
statements, including, but not limited to, the
statements and expectations contained in the
‘Outlook’ section of this report (p. 8).
Statements herein, other than statements of
historical facts, regarding our future results
related to operations, financial condition, cash
flows, business strategy, plans, and future
objectives are forward-looking statements.
Words such as ‘target’, ‘believe’, ‘expect’, ‘aim’,
‘intend’, ‘plan’, ‘seek’, ‘will’, ‘may’, ‘should’
‘anticipate’, ‘continue’, ‘predict’, or variations of
these words as well as other statements
regarding matters that are not historical facts
or that regards future events or prospects
constitute forward-looking statements.
We have based these forward-looking
statements on our current views with respect
to future events and financial performance.
These views involve a number of risks and
uncertainties which could cause actual results
to differ materially from those predicted in the
forward-looking statements and from our past
performance.
Although we believe that the estimates and
projections reflected in the forward-looking
statements are reasonable, they may prove
materially incorrect, and actual results may
materially differ due to a variety of factors.
These factors include, but are not limited to,
market risks, development and construction of
assets, changes in temperature, wind
conditions, wake and blockage effects,
precipitation levels, the development in power,
coal, carbon, gas, oil, currency, and interest
rate markets, changes in legislation,
regulations, or standards, the renegotiation of
contracts, changes in the competitive
environment in our markets, security of supply,
cable break-downs, or other disruptions.
Read more about the risks in note 7 ‘Risk
management’ in this report, in the annual
report for 2020, and in the section ‘Risk and
risk management’ in the Management’s review
in the annual report for 2020 available at
http://www.orsted.com.
Unless required by law, we are under no duty
and undertake no obligation to update or
revise any forward-looking statements after
the distribution of this report, whether as a
result of new information, future events, or
otherwise.
Installation of turbines
at Hornsea 2, UK.
23/43
Management’s review
Interim financial report First half year 2021
Ørsted A/S
CVR no. 36213728
Kraftværksvej 53
DK-7000 Fredericia
Tel.: +45 9955 1111
orsted.com
Group Communication
Martin Barlebo
Tel.: +45 9955 9552
Investor Relations
Allan Bødskov Andersen
Tel.: +45 9955 7996
Front page image
Burbo Bank,
Liverpool Bay, UK
Publication
12 August 2021