Interim financial report
First nine months 2022
2/40
Interim financial report
First nine months 2022
Management’s review
Overview
CEO’s review 3
At a glance 6
Outlook 7
Re
sults 9M 8
Business units’ Q3 results 14
Performance highlights 17
Quarterly overview 18
Results Q3 12
Financial statements
Consolidated financial statements
Consolidated statements of income 9M 20
Consolidated balance sheet 22
Consolidated statement of shareholders’ equity 23
Consolidated statement of cash flows 24
Notes
1. B
asis of reporting 25
2. Segment in
formation 26
3.
Revenue 29
4.
Other operating income and expenses 31
5.
Financial income and expenses 31
7.
Gross and net investments 33
8. Reserves 33
9.
Tax on profit (loss) for the period 34
10.
Market risks 35
11.
Fair value measurement 36
12.
Interest-bearing debt and FFO 37
Management’s statement
Statement by the Executive Board and the
Board of Directors
40
Consolidated statements of income Q3 21
13.
Financial resources 38
6.
Acquisition of enterprises 32
14. Subs
equent events 39
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, 3 November
2022 at 14:00 CEST:
Denmark: +45 82 33 31 94
International: +44 333 300 9266
USA: +1 646 722 4902
The earnings call can be followed live here:
https://edge.media-server.com/mmc/p/a6p6zq4d
Presentation slides will be available prior to the
earnings call and can be downloaded here:
https://orsted.com/financial-reports
Further information
Group Communication
Martin Barlebo
Tel.: +45 99 55 95 52
Investor Relations
Rasmus Keglberg Hærvig
Tel.: +45 99 55 90 95
ESG pe
rformance report, 9M 2022
3/40
Management’s review
Interim financial report First nine months 2022
we invest, influencing industry frame condi-
tions, and leveraging our scale and capabili-
ties.
Financials
Operating profit (EBITDA) for the first nine
months of the year increased by 58 % and
amounted to DKK 25.4 billion, of which DKK
10.9 billion related to the 50 % farm-downs of
Hornsea 2 and Borkum Riffgrund 3.
EBITDA excluding new partnerships increased
by 3.7 billion and amounted to DKK 14.4 billion.
During the first nine months of the year, we
have had to recognise a DKK 1.5 billion nega-
tive impact on hedges related to our trading
activities which are not effective from a hedge
accounting point of view. This impact is tem-
porary and will improve EBITDA in later peri-
ods.
Earnings from our wind and solar assets in
operation amounted to DKK 9.7 billion, which
was a decrease of DKK 0.6 billion compared to
the same period last year, mainly due to
negative effects from volume-ineffective
hedges as a result of lower than expected
wind speeds and later than expected commis-
sioning of Hornsea 2 (approx. DKK 2.8 billion),
and part of the ineffective hedges related to
our trading activities (approx. DKK 1.2 billion).
This was partly offset by ramp-up of genera-
tion from new assets and higher wind speeds
compared to last year.
Reflections from the CEO
The world and not least Europe is in a highly
unusual and volatile period with war, sanc-
tions, political instability, extremely high
inflation, threatening recession, and steeply
increasing interest rates. In Europe, the energy
crisis continues to significantly impact house-
holds, companies, and countries. And although
gas and power prices have fallen from the
peak in late August, prices remain high and
volatile compared to any period before 2022.
These dramatic developments have had both
positive and negative impacts on our business.
In both the EU and the UK, governments are
working on implementing energy price caps or
similar mechanisms to protect citizens and
businesses against soaring energy bills. We
continue to support such initiatives, which are
needed to mitigate the societal effects. At the
same time, these initiatives impose a regulato-
ry risk if they are implemented without taking
the individual power generator’s long-term
contracts and hedges into account. We contin-
ue to be in a constructive dialogue with the
relevant governments about these important
initiatives, and remain confident that responsi-
ble solutions will be found.
While many dynamics in our industry are
currently challenging, the fundamental out-
look remains positive with strong short and
long term growth. Our pipeline of exciting
opportunities continues to expand, and we
remain very focused on ensuring profitable
growth through being highly selective in where
CEO’s review
Full-year EBITDA guidance increased and strategic milestones
achieved with new partnerships and acquisitions
Financials
Our operating profit (EBITDA) for the first
nine months of the year increased by 58 %
and amounted to DKK 25.4 billion, of which
DKK 10.9 billion related to the 50 % farm-
downs of Hornsea 2 and Borkum Riffgrund 3.
EBITDA excluding new partnerships in-
creased by 3.8 billion and amounted to DKK
14.4 billion. Temporary IFRS 9 effects nega-
tively impacted EBITDA with DKK 1.5 billion.
We have increased our full-year EBITDA
guidance excluding new partnerships by
DKK 1 billion to DKK 21-23 billion.
Construction and operational progress
Hornsea 2, the world’s largest wind farm,
was fully commissioned in late August.
At Greater Changhua 1 & 2a, we continue to
make good progress on construction.
Our green share of heat and power genera-
tion amounted to 92 %.
Business development
We completed the 50 % farm-down of
Hornsea 2 in September. The farm-down is
one of the largest renewable energy M&A
transactions ever with a valuation that un-
derpins the attractiveness of our offshore
wind assets.
We have entered into a partnership with
Copenhagen Infrastructure Partners (CIP) to
develop approx. 5.2 GW of offshore wind in
Denmark.
We completed the acquisition of the Ger-
man and French onshore wind platform Ost-
wind.
We closed our first-ever agreement to farm-
down 50 % of a portfolio of four onshore
projects to the US investor Energy Capital
Partners.
We entered into a five year global partner-
ship with WWF to unite action on climate
and ocean biodiversity.
Highlights
Management’s review
4/40
Interim financial report
First nine months 2022
Construction and operational progress
We fully commissioned Hornsea 2, the world’s
largest installed wind farm, in August. The 1.3
GW offshore wind farm comprises 165 wind
turbines, located 89 km off the Yorkshire
Coast, which will help power over 1.4 million
UK homes with low-cost, clean and secure
renewable energy.
At Greater Changhua 1 & 2a, we have success-
fully installed all 111 jacket foundations and 71
wind turbines. We continue to make good
progress in all areas of the construction and
still expect to fully commission the wind farm
in 2023.
Construction of the solar PV farm Old 300 and
the solar part of Helena Energy Center is
progressing according to the updated plan,
and we still expect to commission both in
2023.
Green share of heat and power generation
amounted to 92 %, an increase of 3 percent-
age points compared to the same period last
year. The development was primarily due to
more wind and solar farms in operation, and
higher wind speeds, partly offset by higher
CHP generation on coal due to higher demand
and scarcity of sustainable biomass.
We have entered into a short-term agreement
with Equinor to offtake up to 8 TWh of gas to
meet the demand from our Danish and Swe-
dish B2B customers. The volumes will substi-
tute the gas we currently source at European
markets in the period when the Tyra field is
not supplying gas to Denmark. The agreement
covers the period from 1 January 2023 to 1
April 2024.
We continued to see strong results from our
CHP plants in the first nine months, as the high
power prices continued. Earnings from our gas
business were on the same level as in the same
period last year.
During the quarter, we saw an increase in the
collateral related to hedges we are required to
post on exchanges due to the increasing power
and gas prices. By the end of September, we
had posted a total of DKK 30.6 billion in collat-
eral. To ensure sufficient liquidity to cope with
potentially further collateral payments and
continue our investment in the green transfor-
mation, we have taken several initiatives to
improve our financial resources. In September,
we issued green bonds denominated in GBP
and EUR with proceeds equivalent to DKK 14.8
billion, established a new DKK 15 billion two-
year syndicated RCF, and increased an existing
two-year committed bilateral credit facility
with an aggregate amount of DKK 9 billion. As
of 30 September 2022, our liquidity reserve
stood strong at DKK 88 billion.
We have increased our full-year EBITDA guid-
ance with DKK 1 billion to DKK 21-23 billion
excluding earnings from new partnerships
during the year, i.e. excluding the gain from the
50 % farm-downs of Borkum Riffgrund 3 and
Hornsea 2. The increase is primarily due to
higher earnings in Bioenergy & Other as de-
scribed in the outlook section.
We have lowered our gross investments guid-
ance by DKK 5.0 billion to DKK 38-42 billion,
mainly due to timing effects on projects, with
lower spend in 2022 than originally planned.
We have increased our full-year EBITDA guidance with
DKK 1 billion to DKK 21-23 billion excluding earnings from
new partnerships during the year. The increase is primarily
due to higher earnings in Bioenergy & Other.
”
Business development
Since the publication of our last quarterly
report, we have reached significant milestones
in our ambitious green strategy.
Offshore
We completed the 50 % farm-down of
Hornsea 2 to a consortium comprising AXA IM
Alts, acting on behalf of clients, and Crédit
Agricole Assurances. As part of the agree-
ment, we will provide O&M and energy bal-
ancing services. The farm-down is one of the
largest renewable energy M&A transactions
ever and included the largest single-project
renewable energy financing scheme to date,
with a valuation that underpins the attractive-
ness of our offshore wind assets.
We entered into a partnership with Copenha-
gen Infrastructure Partners (CIP) to develop
approx. 5.2 GW of offshore wind in Denmark
across four projects. The partnership aims to
accelerate the green transformation, create
value in the offshore wind industry, and create
a Danish business and export stronghold
within P2X.
Onshore
We completed the acquisition of the onshore
renewable energy company Ostwind. The
acquisition expands our European onshore
portfolio into Germany and France with more
than 1.5 GW of development pipeline projects.
In October, we closed our first-ever agreement
to farm down a portfolio of four onshore
projects to the US investor Energy Capital
Partners (ECP). Under the agreement, ECP will
acquire a 50 % ownership stake in the onshore
wind farms Lincoln Land Wind, Plum Creek
Wind, and Willow Creek Wind as well as the
solar farm Muscle Shoals with a total capacity
of 862 MW geographically spread over four
US states. The transaction successfully recy-
Management’s review
5/40
Interim financial report
First nine months 2022
cles a material amount of capital, which will
support our ambition of approx. 50 GW of
renewable capacity by 2030.
New organisational structure and changes
to executive management
To continue to drive growth under increasing-
ly different local market requirements, while
leveraging the synergies of a global organisa-
tion, we have decided to implement a new
organisational structure and changes to
executive management as of 1 November
2022.
In connection with the reorganisation, Martin
Neubert has decided to step down as Chief
Commercial Officer and Deputy Group CEO
and leave Ørsted after almost 15 years with
the company. On behalf of all our colleagues
and the Board of Directors, I would like to
express our sincere gratitude for Martin’s
years of strong contributions to the company
and wish him all the best in the future.
Henriette Fenger Ellekrog, our CHRO and
EVP, joined the Executive Board as of 1 No-
vember 2022.
Sustainability
We entered into a five year global partner-
ship with WWF to unite action on climate and
ocean biodiversity. Ørsted and WWF will
jointly identify, develop, and advocate for
offshore wind deployment initiatives and
approaches that not only are in balance with
nature but also enhance biodiversity.
Committed to leading the way
The European energy crisis, the global cli-
mate crisis and an accelerating biodiversity
crisis call for the highest level of urgency in
rolling out renewable energy. And doing so in
the right way - in harmony with nature and
society.
We remain strongly committed to demon-
strate the necessary leadership in order to
shape a healthy long-term financial, environ-
mental, and social development of our
industry. This includes pushing regulatory
and political barriers to accelerate and
ensure a financially viable development of
the renewables industry. To take tangible
action to address biodiversity challenges. To
come up with needed energy system innova-
tion. To support a just transition through
opportunities for young people, stable jobs
and support to the communities in which we
operate . And to occasionally even say no to
opportunities because they do not enable a
sustainable development of our business and
industry.
The opportunities are endless but they come
with an obligation to do things the right way.
We entered into a partnership with Copenhagen Infrastruc-
ture Partners (CIP) to develop approx. 5.2 GW of offshore
wind in Denmark across four projects. The partnership aims
to accelerate the green transformation, create value in the
offshore wind industry, and create a Danish business and
export stronghold within P2X.
”
Mads Nipper
Group President & CEO
6/40
Management’s review
Interim financial report First nine months 2022
At a glance
Key figures 9M 2022
Revenue DKK 96.6 bn
Gross investments DKK 27.6 bn
Capital employed DKK 99.5 bn
TRIR
3.3
ROCE, last 12 months 24.4 %
Ørsted
Number of employees: 7,681
EBITDA, DKKbn
25.4
69 %
20 %
11 %
Offshore
Onshore Bioenergy & Other
Green share of energy generation, %
89
92
2021 2022
Offshore
Number of employees: 3,876
EBITDA, DKKbn
Availability, %
94
93
2021 2022
8.7
9.0
9.3
2021 2022 Norm
7.5
6.6
5.3
10.9
2021 2022
12.8
17.5
Wind speed, m/s
Onshore
Number of employees: 309
EBITDA, DKKbn
Availability, wind, the US, %
96
93
2021 2022
7.1
7.2
7.1
2021 2022 Norm
0.8
2.8
2021 2022
Wind speed, the US, m/s
Bioenergy & Other
Number of employees: 985
EBITDA, DKKbn
74
72
2021 2022
2.3
5.0
2021 2022
Green share of energy generation, %
Degree days, number
1,893
1,687
1,902
2021 2022 Norm
New partnerships
7/40
Management’s review
Interim financial report First nine months 2022
EBITDA
We have increased our full-year EBITDA guid-
ance with DKK 1 billion to DKK 21-23 billion
excluding earnings from new partnerships dur-
ing the year, i.e. excluding the gain from the 50
% farm-downs of Borkum Riffgrund 3 and
Hornsea 2. The increase is primarily due to
higher earnings in Bioenergy & Other from our
CHP plants due to the higher power prices in
Denmark. As we only hedge the power we co-
generate with heat, we expect to continue to
benefit from the high power prices.
This guidance is based on an assumption of
normal wind speeds in the remainder of the
year. We have not included impacts from po-
tential price caps or other impacts from politi-
cal intervention such as wind fall taxes etc. in
our guidance. As always, the guidance is sub-
ject to a number of uncertainties (see box).
Gross investments
We have lowered our gross investments guid-
ance by DKK 5.0 billion to DKK 38-42 billion,
mainly due to timing effects on projects, with
lower spend in 2022 than originally planned.
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 2021.
Outlook 2022, DKK billion
2021
realised
Guidance
2 Feb 2022
Guidance
29 Apr 2022
EBITDA, without new partnerships 15.8
19-21
19-21
Offshore, without new partnerships 9.5
Significantly
higher
Significantly
higher
Onshore 1.3
Significantly
higher
Significantly
higher
Bioenergy & Other 4.7
Significantly
lower
Lower
Gross investments 39.3 38-42 38-42
Guidance
11 Aug 2022
20-22
Significantly
higher
Significantly
higher
Significantly
higher
43-47
Guidance
3 Nov 2022
21-23
Significantly
higher
Significantly
higher
Significantly
higher
38-42
Outlook 2022
Forward-looking statements
The interim financial report contains forward-looking statements which include projections
of our short- and long-term financial performance and targets as well as our financial poli-
cies. These statements are by nature uncertain and associated with risk. Many factors may
cause the actual development to differ materially from our expectations. These factors
include, but are not limited to, changes in temperature, wind conditions, wake and blockage
effects, precipitation levels, the development in power, coal, carbon, gas, oil, currency, infla-
tion rates, and interest rate markets, the ability to uphold hedge accounting , changes in
legislation, regulations, or standards, the renegotiation of contracts, changes in the compet-
itive environment in our markets, reliability of supply, and market volatility and disruptions
from geopolitical tensions. Read more about the risks in the annual report for 2021 in the
chapter ‘Our risks and risk management’ and in note 6.
8/40
Management’s review
Interim financial report First nine months 2022
Financial results
Revenue
Power generation from offshore and onshore
assets increased by 40 % and totalled 20.8
TWh in 9M 2022. The increase was due to
ramp-up of generation from Hornsea 2, West-
ern Trail, Haystack, Lincoln Land, Old 300, the
wind part of Helena Energy Center, the acquisi-
tion of Ford Ridge, the full-year effects from
onshore assets commissioned in 2021, and
higher wind speeds, partly offset by the 50 %
farm-down of Borssele 1 & 2 in May 2021.
Heat generation amounted to 4.3 TWh, 21 %
lower than in the same period last year, mainly
due to warmer weather. Thermal power gen-
eration decreased by 4 % and amounted to 4.6
TWh. Lower CHP generation (warmer weather)
was partly offset by higher condensing power
generation.
Our renewable share of generation was 92 %
in 9M 2022, 3 percentage points higher than
the same period last year driven by higher
share of generation from offshore and onshore
renewables.
Revenue amounted to DKK 96.6 billion. The
increase of 105 % relative to 9M 2021 was pri-
marily due to the significantly higher power
and gas prices across all markets.
EBITDA
Operating profit (EBITDA) totalled DKK 25.4
billion, of which the gain from the 50 % farm-
downs of Hornsea 2 and Borkum Riffgrund 3
amounted to DKK 9.3 billion and DKK 1.6 bil-
lion, respectively. Thus, EBITDA excluding new
partnerships amounted to DKK 14.4 billion, an
increase of DKK 3.7 billion compared to the
same period last year.
Earnings from wind and solar assets in opera-
tion amounted to DKK 9.7 billion, a decrease
of DKK 0.6 billion compared to the same peri-
od last year. The decrease was due to both
volume-related overhedging (approx. DKK 2.8
billion) and other IFRS 9-related ineffective
hedges in Offshore (approx. DKK 1.2 billion),
partly offset by higher wind speeds than last
year (approx. DKK 1.4 billion).
The negative effect from volume-related over-
hedging was mainly a consequence of lower-
than-expected wind speeds (9.0 m/s vs 9.3 m/s
in a normal wind year) and later than expected
commissioning of wind turbines at Hornsea 2
resulting in Ørsted having hedged too large
volumes.
The negative effect from other hedges, which
are not effective from a hedge accounting
perspective under IFRS 9, cannot be kept at
EBITDA excluding new partnerships, DKKbn
Results 9M
Financial results, DKKm 9M 2022 9M 2021 %
Revenue
96,598 47,007 105 %
EBITDA
25,361 16,043 58 %
Depreciation and amortisation
(6,962) (5,828) 19 %
Operating profit (loss) (EBIT)
18,399 10,215 80 %
Gain (loss) on divestment of enterprises
299 (58) n.a.
Financial items, net
(1,551) (1,236) 25 %
Profit before tax
17,149 8,916 92 %
Tax on profit (loss) for the period
(1,824) (1,287) 42 %
Tax rate
11 % 14 % (4 %p)
Profit (loss) for the period
15,325 7,629 101 %
- New partnerships
10,916 5,296 106 %
- EBITDA excl. new partnerships
14,445 10,747 34 %
our equity hedge reserve, but have to be rec-
ognised in EBITDA. The early recognition of
these hedges are only a matter of timing and
will improve EBITDA in later periods, when
the corresponding effective hedges with posi-
tive values expire (or if prices decline again).
In ‘Sites, other’, we had negative impact from
high prices and volatility (balancing costs and
outages), from expanding our portfolio (higher
OPEX, BSUoS, and TNUoS tariffs), and from
the farm-down of 50 % of Borssele. This was
partly offset by ramp-up of generation at
Hornsea 2 , higher achieved prices from one-
sided German CFD sites, and from value cre-
ating market trading activities.
EBITDA from partnerships amounted to DKK
13.0 billion and was mainly related to the
DKK 9.3 billion and DKK 1.6 billion gains on
the 50 % farm-downs of Hornsea 2 and
Offshore (DKK -0.9bn)
Onshore
(DKK 2.0bn)
Bio & Other
(DKK 2.7bn)
Management’s review
9/40
Interim financial report
First nine months 2022
Borkum Riffgrund 3 (new partnerships), respec-
tively. Earnings from existing partnerships
amounted to DKK 2.1 billion. In 9M 2022, we
had positive earnings from finalised projects
and construction work for partners at Greater
Changhua 1. In addition, we reversed DKK 0.5
billion of the DKK 0.8 billion warranty provision
towards our partners we recognised in 9M 2021
related to cable protection system issues at
some of our offshore wind farms. We now ex-
pect lower costs to reinstate the integrity of
the cables. As mentioned in our Q1 2022 report,
the updated estimate for the total costs to be
covered by us is DKK 1.3 billion, down from
previously DKK 3.0 billion.
EBITDA from our Onshore sites was positively
impacted by ramp-up of generation and higher
achieved prices across the portfolio.
EBITDA from our CHP plants amounted to DKK
4.1 billion, an increase of DKK 2.6 billion com-
pared to the same period last year. The in-
crease was mainly due to higher realised pow-
er prices combined with higher sales of ancil-
lary services. As we initially only hedge the
power we co-generate with heat, we have
been able to benefit from the high power pric-
es on our condensing power generation. This
was partly offset by the recognition of ineffec-
tive hedges from power hedging related to
future periods (approx. DKK 0.3 billion).
EBITDA from our gas business contributed with
earnings of DKK 1.0 billion in 9M 2022, in line
with the same period last year, however with
offsetting effects. We saw a positive effect
from optimising our north-western European
gas activities, where we were able to lock in
gains from the offtake flexibility in some of our
sourcing contracts and at gas storages. In
contrast, our decision during the spring to un-
wind gas hedges related to the Gazprom Ex-
port contract to balance our risk if gas sup-
plies from Russia were ceased led to a net loss
on the Gazprom Export sourcing contract in
the first half of the year. Furthermore, 9M 2021
was positively impacted by renegotiation of
gas purchase contracts.
EBIT
EBIT increased by DKK 8.2 billion to DKK 18.4
billion in 9M 2022, primarily as a result of the
higher EBITDA.
Financial income and expenses
Net financial income and expenses amounted
to DKK -1.6 billion compared to DKK -1.2 billion
in 9M 2021. The higher net expenses were
mainly due to capital losses on the bond port-
folio (net of related interest rate swaps) due to
increasing interest rates and higher agreed
returns on tax equity contributions due to
more onshore assets in operation, only partly
offset by positive exchange rate adjustments.
Tax and tax rate
Tax on profit for the period amounted to DKK
1.8 billion, DKK 0.5 higher than in the same
period last year. The effective tax rate was 11
% and was impacted by the tax-exempt gains
of DKK 10.9 billion from the 50 % farm-downs
of Hornsea 2 and Borkum Riffgrund 3, the
recognition of deferred taxes related to an
initial tax equity contribution for the wind part
of Helena Energy Center in the US, and prior
year adjustments.
Profit for the period
Profit for the period totalled DKK 15.3 billion,
DKK 7.7 billion higher than in 9M 2021. The
increase was mainly due to the higher EBITDA,
as explained above.
Wind technicians at CTV
Anholt Wind, Kattegatt,
Denmark
Management’s review
10/40
Interim financial report
First nine months 2022
Hornsea 1 offshore transmission asset, only
partly offset by construction work regarding
the offshore transmission asset at Hornsea 2.
In 9M 2022, smaller cash inflows from tax equi-
ty contributions were more than offset by tax
equity reversals, whereas we had a large in-
flow of tax equity contributions in 9M 2021.
Furthermore, higher gas and fuel storages
contributed to the lower cash flow.
Investments and divestments
Gross investments amounted to DKK 27.6
billion in line with 9M 2021. The main invest-
ments in 9M 2022 were:
–
offshore wind farms (DKK 18.8 billion), in-
cluding Greater Changhua 1 & 2a in Tai-
wan, Hornsea 2 in the UK, and our portfolio
of US and German projects
–
onshore wind and solar PV farms (DKK 8.5
billion), including the acquisition of Ost-
wind and Ford Ridge as well as the con-
struction of Sunflower Wind, Old 300, Hel-
ena Energy Center, Haystack, and Kennox-
head 1.
Divestments amounted to DKK 24.7 billion in
9M 2022 and were mainly related to the 50 %
farm-downs of Hornsea 2 and Borkum
Riffgrund 3 with proceeds (NIBD impact) of
DKK 22.0 billion and DKK 1.9 billion, respec-
tively, and payments from our 25 % partner in
Ocean Wind 1. In 9M 2021, divestments
amounted to DKK 10.6 billion and were mainly
related to the 50 % farm-down of Borssele 1 &
2.
Interest-bearing net debt
Interest-bearing net debt (NIBD) totalled DKK
Cash flows and net debt
Cash flows from operating activities
Cash flows from operating activities totalled
DKK -9.0 billion in 9M 2022 compared to DKK
11.5 billion in 9M 2021. The decrease of DKK
20.5 billion was mainly driven by higher collat-
eral payments related to hedges.
During 9M 2022, we tied up additional DKK
24.3 billion, net, in variation margin payments
on unrealised hedges (part of ‘Change in deriv-
atives’) and initial margin payments at clearing
houses (part of ‘Change in other working capi-
tal’) due to the increasing and volatile power
and gas prices:
–
the variation margin payments were a cash
outflow of DKK 19.0 billion, of which DKK
13.4 billion related to power hedges in Off-
shore, and DKK 5.6 billion related to gas
hedges in Bioenergy & Other
–
the initial margin payments were a cash
outflow of DKK 5.3 billion
–
during the second quarter, we issued parent
company guarantees in total of EUR 1 bil-
lion, which reduced our initial margin pay-
ments.
The negative impact from variation margin
payments included in ‘Change in derivatives’
was partly offset by the reversal of unrealised
market trading results and ineffective hedges.
In 9M 2022, we had a net cash inflow from
work in progress of DKK 2.4 billion, mainly from
the farm-down of 50 % of the offshore trans-
mission asset at Hornsea 2, partly offset by
construction work at Greater Changhua 1. In
9M 2021, we had a net cash inflow of DKK 3.1
billion, mainly from the divestment of the
Cash flow and net debt, DKKm 9M 2022 9M 2021 %
Cash flows from operating activities
(8,991) 11,480 n.a.
EBITDA
25,361 16,043 58 %
Reversal of gain (loss) on divestments of assets
(10,942 (5,626) 94 %
Change in derivatives
(10,802) 11 n.a.
Change in provisions
(1,267) (270) 369 %
Other items
(180) (53) 240 %
Interest expense, net
(509) (597) (15 %)
Paid tax
(1,235) (1,354) (9 %)
Change in work in progress
2,441 3,144 (22 %)
Change in tax equity partner liabilities
(604) 2,660 n.a.
Change in other working capital
(11,254) (2,478) 354 %
Gross investments
(27,621) (27,555) 0 %
Divestments
24,653 10,567 133 %
Free cash flow
(11,959) (5,508) 117 %
Net debt, beginning of period
24,280 12,343 97 %
Free cash flow
11,959 5,508 117 %
Dividends and hybrid coupon paid
5,824 5,369 8 %
Addition of lease obligations, net
1,016 650 56 %
Issuance of hybrid capital, net
- (4,356) n.a.
Exchange rate adjustments, etc.
2,622 1,697 55 %
Net debt, end of period
45,701 21,211 115 %
45.7 billion at the end of September 2022
against DKK 24.3 billion at the end of 2021.
The increase was mainly due to a negative
free cash flow of DKK 12.0 billion and dividend
payments of DKK 5.8 billion.
Equity
Equity was DKK 53.8 billion at the end of Sep-
tember 2022 against DKK 85.1 billion at the
end of 2021. The reduction during 9M 2022
was driven by unrealised losses on the hedge
reserve for power hedges due to the signifi-
cantly increasing prices, partly offset by prof-
its for the period. At the end of September
2022, the post-tax hedging and currency trans-
lation reserve amounted to a loss of DKK 66.3
billion. The reserve will be matched by higher
future revenue from the underlying activities
when the contracts fall into delivery. Approx.
15 % and 58 % of the reserve will materialise
before 31 December 2022 and 2023, respec-
tively, thus gradually increasing equity again.
Capital employed
Capital employed was DKK 99.5 billion at the
end of September 2022 against DKK 109.4
billion at the end of 2021, as the before-
mentioned unrealised losses on power hedges
Management’s review
11/40
Interim financial report
First nine months 2022
Greenhouse gas emissions
Our greenhouse gas emissions from heat and
power generation (scope 1 and 2) increased by
9 % compared to 9M 2021 to 1.7 million tonnes
due to increased use of coal in the thermal
heat and power generation.
Greenhouse gas intensity from our heat and
power generation and other operating activi-
ties decreased to 59 g CO
2
e/kWh in 9M 2022
against 64 g CO
2
e/kWh in 9M 2021. The de-
crease was mainly driven by the higher gener-
ation from our onshore and offshore assets
offsetting the increased GHG emissions from
thermal heat and power generation.
Greenhouse gas emissions from our supply
chain and sales activities (scope 3) decreased
by 37 % to 9 million tonnes in 9M 2022. This
was primarily due to 42 % lower gas sales and
a 34 % reduction in emissions from COD of
renewable assets.
Safety
In 9M 2022, we had 64 total recordable injuries
(TRIs), of which 44 injuries were related to con-
tractors’ employees. This was an increase of 10
injuries compared to the same period last year.
The number of hours worked was 19.4 million
hours, an increase of 10 % compared to 9M
2021. During 9M 2022, the total recordable
injury rate (TRIR) increased from 3.0 in 9M 2021
to 3.3 in 9M 2022.
.
more than outweighed new investments.
Financial ratios
Return on capital employed (ROCE)
Return on capital employed (ROCE, last 12
months) was 24.4 % at the end of 9M 2022. The
increase of 11.5 percentage points compared to
the same period last year was attributable to a
higher EBIT over the 12 month period.
Credit metric (FFO/adjusted net debt)
The funds from operations (FFO)/adjusted net
debt credit metric was 35.3 % at the end of
September against 42.5 % in the same period
last year. The decrease was mainly due to a
higher NIBD, partly offset by higher FFO over
the 12-month period.
During Q3 2022, we have updated the defini-
tion of our FFO/adjusted net debt. We have
excluded variation margin payments in our FFO
definition, to reflect the changes implemented
by the rating agencies. Furthermore, we have
excluded ‘other interest-bearing debt’ and
‘other interest-bearing receivables’ from our
adjusted net debt, to align with the common
methodology used by the rating agencies. We
have restated comparison numbers for 2022
and 2021 accordingly. See note 12 for defini-
tions.
Non-financial results
Green share of energy generation
The green share of heat and power generation
amounted to 92 % in 9M 2022 compared to 89
% in 9M 2021. The 3 percentage points increase
was driven by more wind and solar assets in
operation and higher wind speeds, partially
offset by lower biomass-based heat and power
generation.
Taxonomy-eligible KPIs
The taxonomy-eligible share of revenue was 73 %, whereas the eligible share of EBITDA was
92 %, gross investments was 99 %, and OPEX was 80 %, in 9M 2022. The non-eligible part of
our revenue primarily concerned our long-term legacy activities related to sourcing and sale
of gas (20 % of revenue in 9M 2022) and non-eligible power sales (including end customer
sales). We expect the share of taxonomy-eligible revenue to increase in the coming years.
Read more about our EU taxonomy-eligible KPIs in note 2.1 in the ESG Performance Report
for 9M 2022.
Capital employed
Offshore
Onshore
Bioenergy & Other
DKK 99 billion
0 %
29 %
71 %
Key ratios, DKKm, % 9M 2022 9M 2021 %
ROCE 24.4 12.9 12 %p
Adjusted net debt 58,047 33,248 75 %
FFO/adjusted net debt 35.3 42.5 (7 %p)
FFO/adjusted net debt restated numbers for 9M 2021. See note 12 for adjusted definition.
12/40
Management’s review
Interim financial report First nine months 2022
EBITDA
Operating profit (EBITDA) totalled DKK 12.3
billion compared to DKK 3.0 billion in Q3 2021.
In September 2022, we divested 50 % of
Hornsea 2 resulting in a farm-down gain of
DKK 9.3 billion. Thus, EBITDA excluding new
partnerships was in line with the same period
last year at DKK 3.0 billion.
Earnings from offshore and onshore assets in
operation were DKK 0.8 billion lower than the
same period last year and amounted to DKK
1.7 billion. The decrease was due to both vol-
ume-related overhedging (approx. DKK 0.8
billion) and other IFRS 9-related ineffective
hedges (approx. DKK 1.2 billion), partly offset
by higher wind speeds than last year (approx.
DKK 0.2 billion).
In ‘Sites, other’, we had a positive impact from
ramp-up of generation at Hornsea 2, higher
achieved prices from one-sided German CFD
sites, and value creating market trading activi-
ties. This was partly offset by negative effects
from high prices and volatility (balancing costs
and outages) and from expanding our portfolio
(higher OPEX, BSUoS, and TNUoS tariffs).
EBITDA from our Onshore sites was positively
impacted by ramp-up of generation and higher
achieved prices across the portfolio.
EBITDA from our CHP plants more than dou-
bled relative to the same period last year and
amounted to DKK 1.7 billion. The increase was
mainly due to higher achieved power prices. As
we initially only hedge the power we co-
generate with heat, we have been able to
benefit from the high power prices on our con-
densing power generation, which was higher
than in the same period last year.
Earnings from our gas business were DKK 0.3
billion, a DKK 0.6 billion decrease compared to
the same period last year, mainly due to the
renegotiation of gas purchase contracts, which
led to a positive effect in Q3 2021. However,
underlying earnings increased driven by a posi-
tive effect from our gas storage activities.
Financial income and expenses
Net financial income and expenses amounted
to DKK -0.2 billion in Q3 2022, slightly lower
than last year.
Tax and tax rate
Tax on profit for the period amounted to DKK
0.3 billion in Q3 2022 compared to DKK 0.2
billion in Q3 2021. The effective tax rate in Q3
2022 was 4 % and was significantly impacted
by the tax-exempt gain from the 50 % farm-
down of Hornsea 2.
Profit for the period
Profit for the period totalled DKK 9.4 billion,
DKK 8.9 billion higher than Q3 2021. The in-
crease was primarily due to the gain from the
50 % farm-down of Hornsea 2.
Results Q3
Financial results, DKKm Q3 2022 Q3 2021 %
Revenue
36,541 14,510 152 %
EBITDA
12,317 2,984 313 %
Depreciation and amortisation
(2,530) (1,939) 30 %
Operating profit (loss) (EBIT)
9,787 1,045 837 %
Gain (loss) on divestment of enterprises
124 (22) n.a.
Financial items, net
(217) (351) (38 %)
Profit before tax
9,695 671 1,345 %
Tax on profit (loss) for the period
(340) (184) 85 %
Tax rate
4 % 27 % (23 %p)
Profit (loss) for the period
9,355 487 1,821 %
- New partnerships
9,346 (59) n.a.
- EBITDA excl. new partnerships
2,971 3,043 (2 %)
Offshore (DKK –1.1bn)
Onshore
(DKK 0.5bn)
Bio & Other
(DKK 0.6bn)
EBITDA excluding new partnerships, DKKbn
13/40
Management’s review
Interim financial report First nine months 2022
Cash flows and net debt
Cash flows from operating activities
Cash flows from operating activities totalled
DKK -11.3 billion in Q3 2022 compared to DKK
0.2 billion in Q3 2021. The decrease of DKK 11.6
billion was mainly due to higher collateral
payments at clearing houses.
During Q3 2022, we tied up additional DKK
18.4 billion, net, in variation margin payments
on unrealised hedges (part of ‘Change in deriv-
atives’) and initial margin payments at clearing
houses (part of ‘Change in other working capi-
tal’) due to the increasing and volatile power
and gas prices:
–
the variation margin payments were a
cash outflow of DKK 10.9 billion
–
the initial margin payments were a cash
outflow of DKK 7.5 billion.
The negative impact from variation margin
payments included in ‘Change in derivatives’
was partly offset by reversal of unrealised
market trading results and ineffective hedges.
We had no cash inflow in Q3 2022 related to
tax equity partners, whereas we received large
tax equity contributions in Q3 2021 from West-
ern Trail and Muscle Shoals.
In Q3 2022, we had a net cash inflow from
work in progress of DKK 4.8 billion, mainly due
to the farm-down of 50 % of the offshore
transmission asset at Hornsea 2 and milestone
payments received at Greater Changhua 1. In
Q3 2021, we had a net cash outflow of DKK
0.6 billion, mainly from the construction of the
offshore transmission asset at Hornsea 2.
Investments and divestments
Gross investments amounted to DKK 14.4 bil-
lion against DKK 8.8 billion in Q3 2021. The
main investments in Q3 2022 were:
–
offshore wind farms (DKK 8.0 billion), in-
cluding Greater Changhua 1 & 2a in Taiwan,
Hornsea 2 in the UK, and our portfolio of
US AND German projects
–
onshore wind and solar PV farms (DKK 6.3
billion), including the acquisition of Ostwind
and Ford Ridge as well as the construction
of Old 300, Sunflower Wind, Helena Energy
Center, and Haystack.
Divestments amounted to DKK 22.5 billion in
Q3 2022 and were mainly related to the 50 %
farm-down of Hornsea 2.
Cash flow and net debt, DKKm Q3 2022 Q3 2021 %
Cash flows from operating activities
(11,309) 246 n.a.
EBITDA
12,317 2,984 313 %
Reversal of gain (loss) on divestments of assets
(9,058) 52 n.a.
Change in derivatives
(5,587) 486 n.a.
Change in provisions
(312) (915) (66 %)
Other items
(26) (7) 271 %
Interest expense, net
(255) 39 n.a.
Paid tax
(716) (168) 326 %
Change in work in progress
4,789 (610) n.a.
Change in tax equity partner liabilities
(583) 2,041 n.a.
Change in other working capital
(11,878) (3,656) 225 %
Gross investments
(14,417) (8,757) 65 %
Divestments
22,459 7 n.a.
Free cash flow
(3,267) (8,504) (62 %)
Net debt, beginning of period
41,449 12,067 243 %
Free cash flow
3,267 8,504 (62 %)
Dividends and hybrid coupon paid
132 115 15 %
Addition of lease obligations , net
(121) 164 n.a.
Exchange rate adjustments, etc.
974 361 170 %
Net debt, end of period
45,701 21,211 115 %
14/40
Management’s review
Interim financial report First nine months 2022
Highlights
– We completed the farm-down of 50 % of
Hornsea 2.
– We have entered into a partnership with
Copenhagen Infrastructure Partners (CIP)
to develop approx. 5.2 GW of offshore
wind in Denmark.
Financial results Q3 2022
Power generation increased by 42 % to 3.2
TWh in Q3 2022. The increase was due to
ramp up at Hornsea 2 and higher wind speeds.
Wind speeds amounted to a portfolio average
of 7.7 m/s, which was higher than in Q3 2021
(7.6 m/s), but below the normal wind speeds
expected in the third quarter (8.4 m/s).
Availability ended at 91 %, slightly lower than
the same period last year. This was mainly
driven by lower availability at Hornsea 2 in the
commissioning and start-up phase.
Revenue increased by 174 % to DKK 25.1 billion.
Revenue from offshore wind farms in operation
increased by 16 % to DKK 4.0 billion, mainly
driven by higher generation and higher power
prices for the merchant part of the portfolio.
Revenue from power sales more than doubled
to DKK 14.5 billion, due to the higher power
prices and higher volumes sold.
Revenue from construction agreements in-
creased by DKK 6.6 billion and mainly related
to the divestment of 50 % of the offshore
transmission assets at Hornsea 2 and the con-
struction of Greater Changhua 1 for partners.
EBITDA increased by DKK 8.3 billion and
amounted to DKK 9.7 billion.
EBITDA from Sites, O&M, and PPAs amounted
to DKK 0.5 billion in Q3 2022. Despite a posi-
tive impact from higher wind speeds than last
year (DKK 0.2 billion), ramp-up of generation
at Hornsea 2 and higher achieved prices main-
ly from one-sided German CFD sites, and value
creating market trading activities, earnings
decreased by DKK 1.4 billion. This was primari-
ly due to both volume-related overhedging
(approx. DKK 0.8 billion) from lower-than-
expected wind speeds, and other IFRS 9-
related ineffective hedges (approx. DKK 1.2
billion). Furthermore, we saw negative effects
from high prices and volatility (balancing costs
and outages) and from expanding our portfolio
(higher OPEX, BSUoS, and TNUoS tariffs).
EBITDA from partnerships amounted to DKK
9.8 billion and mainly related to the farm-
down of 50 % of Hornsea 2 with a gain of DKK
9.3 billion. Adjusted for new partnerships,
EBITDA from existing partnerships amounted
to DKK 0.4 billion, mainly from construction
work at Greater Changhua 1 for partners.
EBITDA from other activities, including project
development, amounted to DKK -0.6 billion,
DKK 0.1 billion more than in Q3 2021, and was
mainly related to expensed project develop-
ment costs.
Financial results Q3 2022 Q3 2021 %
Business drivers
Decided (FID'ed) and installed capacity GW
11.1 9.8 13 %
Installed capacity
GW
8.9 7.6 17 %
Generation capacity
GW
5.3 4.0 33 %
Wind speed
m/s
7.7 7.6 1 %
Load factor
%
28 27 1 %p
Availability
%
91 93 (2 %p)
Power generation
GWh
3,246 2,286 42 %
Denmark
423 375 13 %
United Kingdom
2,212 1,271 74 %
Germany
387 399 (3 %)
The Netherlands
197 235 (16 %)
Other
27 6 386 %
Power sales GWh 5,600 4,803 17 %
Power price, LEBA UK
GBP/MWh
361 164 120 %
British pound
DKK/GBP
8.7 8.7 (0 %)
Financial performance
Revenue
DKKm
25,057 9,156 174 %
Sites, O&M and PPAs
3,963 3,415 16 %
Power sales
14,460 5,658 156 %
Construction agreements
6,629 4 n.a.
Other
5 79 (94 %)
EBITDA
DKKm
9,652 1,304 640 %
Sites, O&M, and PPAs
467 1,822 (74 %)
Construction agreements and divestment gains 9,765 (9) n.a.
Other, incl. project development (580) (509) 14 %
Depreciation
DKKm
(1,820) (1,425) 28 %
EBIT
DKKm
7,832 (121) n.a.
Cash flow from operating activities
DKKm
(10,296) (5,644) 82 %
Gross investments
DKKm
(7,979) (6,041) 32 %
Divestments
DKKm
22,296 16 n.a.
Free cash flow DKKm
4,021 (11,669) n.a.
Capital employed DKKm
68,361 83,648 (18 %)
9M 2022 9M 2021 %
11.1 9.8 13 %
8.9 7.6 17 %
5.3 4.0 33 %
9.0 8.7 4 %
38 35 3 %p
93 94 (1 %p)
11,072 9,356 18 %
1,450 1,307 11 %
7,358 5,123 44 %
1,323 1,342 (1 %)
858 1,521 (44 %)
83 63 31 %
22,182 16,229 37 %
267 110 143 %
8.8 8.6 2 %
62,199 31,381 98 %
12,582 12,444 1 %
38,792 13,517 187 %
10,724 5,139 109 %
101 281 (64 %)
17,475 12,777 37 %
6,194 8,976 (31 %)
12,992 5,066 156 %
(1,711) (1,265) 35 %
(5,012) (4,474) 12 %
12,463 8,303 50 %
(12,456) 863 n.a.
(18,784) (16,401) 15 %
24,417 10,685 129 %
(6,823) (4,853) 41 %
68,361 83,648 (18 %)
O&M: Operation and maintenance agreements, PPAs: Power purchase agreements
Offshore
15/40
Management’s review
Interim financial report First nine months 2022
Highlights
– We completed the acquisition of Ostwind.
– We closed our first-ever agreement to farm
-down 50 % of a portfolio of four onshore
projects.
Financial results Q3 2022
Power generation from our operating onshore
assets increased by 43 % compared to Q3 2021
and amounted to 2.7 TWh. The increase was
due to the commissioning of the Western Trail,
Haystack, Ford Ridge, and Lincoln Land wind
farms, the wind part of Helena Energy Center,
and the solar PV and storage facility Permian
Energy Center, and the ramp-up of generation
at Old 300. In Q3 2022, the wind speeds across
the portfolio were 6.0 m/s, which were lower
than both last year (6.4 m/s) and for a normal
wind year (6.3 m/s).
Availability for both wind and solar PV was
lower during the quarter due to minor tech-
nical issues, mainly at Haystack and Muscle
Shoals.
Revenue was up DKK 0.4 billion compared to
Q3 2021 and amounted to DKK 0.8 billion. The
increase was mainly due to increased power
generation as a result of the newly commis-
sioned assets mentioned above and higher
achieved prices across the onshore portfolio.
In the US we benefitted from the higher power
prices during the ramp-up phases of our assets
under construction, where PPAs do not start
until COD. Furthermore, some of our PPAs
have upside share structures that allow for
capture of additional revenue in periods of
high pricing compared to traditional PPAs.
EBITDA for Q3 2022 amounted to DKK 0.9
billion, DKK 0.5 billion higher than in the same
period last year. The increase was due to high-
er generation and higher prices across the
portfolio. This was partly offset by higher fixed
costs due to the expansion of the business and
project development.
Onshore
Financial results Q3 2022 Q3 2021 % 9M 2022 9M 2021 %
Business drivers
Decided (FID'ed) and installed capacity GW 5.1 4.7 9 % 5.1 4.7 9 %
Installed capacity
GW
4.2 3.0 36 % 4.2 3.0 36 %
Wind speed, US
m/s
6.0 6.4 (7 %) 7.2 7.1 1 %
Load factor, wind, US
%
30 33 (3 %p) 42 41 1 %p
Load factor, solar PV
%
32 27 5 %p 28 28 0 %p
Availability, wind, US
%
92 98 (6 %p) 93 96 (3 %p)
Availability, solar PV
%
96 98 (2 %p) 98 95 3 %p
Power generation
GWh
2,723 1,904 43 % 9,721 5,534 76 %
US, wind
1,946 1,441 35 % 7,678 4,661 65 %
US, solar PV
676 375 80 % 1,532 746 105 %
Europe
101 88 15 % 511 127 302 %
US dollar DKK/USD
7.4 6.3 17 % 7.0 6.2 13 %
Financial performance
Revenue
DKKm
836 406 106 % 2,256 633 256 %
EBITDA
DKKm
867 413 110 % 2,792 819 241 %
Sites
610 285 114 % 1,677 324 418 %
Production tax credits and tax attributes 597 307 94 % 1,844 902 104 %
Other, incl. project development (340) (179) 90 % (729) (407) 79 %
Depreciation
DKKm
(456) (261) 75 % (1,196) (590) 103 %
EBIT
DKKm
411 152 170 % 1,596 229 597 %
Cash flow from operating activities
DKKm
364 2,465 (85 %) 1,470 2,876 (49 %)
Gross investments
DKKm
(6,322) (2,639) 140 % (8,540) (10,919) (22 %)
Divestments
DKKm
(1) - n.a. 43 - n.a.
Free cash flow DKKm (5,958) (174) 3324 % (7,027) (8,043) (13 %)
Capital employed DKKm
28,340 17,301 64 % 28,340 17,301 64 %
16/40
Management’s review
Interim financial report First nine months 2022
Financial results Q3 2022
Heat generation decreased by 41 % in Q3 2022
mainly due to a breakdown of a non-Ørsted
district heating facility in 2021, leading to Ør-
sted providing more heat to the Greater Co-
penhagen area in Q3 2021. Power generation
increased by 33 % due to higher condensing
power generation.
Gas sales and power sales decreased by 58 %
and 41 %, respectively, due to no volumes be-
ing delivered under the Gazprom Export sourc-
ing contract and a gradual phase-out of our
remaining UK B2B activities.
Revenue increased by 88 % compared to Q3
2021 and amounted to DKK 12.3 billion. The
increase was driven by significant increases in
both gas and power prices, which led to higher
revenue from our gas and power sales busi-
nesses. The unhedged part of power genera-
tion at our CHP plants was also positively im-
pacted by the higher Danish power prices.
EBITDA amounted to DKK 1.8 billion compared
to DKK 1.2 billion in Q3 2021.
EBITDA from CHP plants was DKK 1.2 billion
higher than in the same period last year, total-
ling DKK 1.7 billion in Q3 2022. The increase
was mainly due to higher power prices and
condensing power generation in Denmark as
mentioned above.
EBITDA from Gas Markets & Infrastructure
decreased by DKK 0.6 billion relative to the
same period last year, amounting to DKK 0.3
billion in Q3 2022. The decrease was mainly
due to the renegotiation of gas purchase con-
tracts which led to a positive effect in Q3 2021.
However, underlying earnings increased, driv-
en by a positive effect from our gas storage
activities.
Bioenergy & Other
Financial results Q3 2022 Q3 2021 % 9M 2022 9M 2021 %
Business drivers
Degree days Number 98 81 21 % 1,687 1,893 (11 %)
Heat generation
GWh
239 402 (41 %) 4,305 5,440 (21 %)
Power generation
GWh
1,363 1,028 33 % 4,603 4,794 (4 %)
Gas sales
GWh
5,706 13,580 (58 %) 27,589 47,605 (42 %)
Power sales
GWh
1,339 2,271 (41 %) 4,495 6,725 (33 %)
Gas price, TTF
EUR/MWh
196.2 47.4 314 % 129.1 30.2 327 %
Power price, DK
EUR/MWh
347.8 96.3 261 % 226.2 68.1 232 %
Green dark spread, DK
EUR/MWh
146.6 4.6 n.a. 45.0 (2.7) n.a.
Green spark spread, DK
EUR/MWh
(74.8) (19.3) 287 % (63) (10.2) 521 %
Financial performance
Revenue
DKKm
12,336 6,551 88 % 35,992 19,138 88 %
EBITDA
DKKm
1,849 1,206 53 % 5,010 2,331 115 %
CHP plants 1,691 460 268 % 4,133 1,487 178 %
Gas Markets & Infrastructure 253 808 (69 %) 1,044 1,059 (1 %)
Other, incl. project development
(95) (62) 53 % (167) (215) (22 %)
Depreciation DKKm
(190) (194) (2 %) (572) (588) (3 %)
EBIT
DKKm
1,659 1,012 64 % 4,438 1,743 155 %
Cash flow from operating activities
DKKm
(1,881) 2,881 n.a. 1,884 7,174 (74 %)
Gross investments
DKKm
(84) (72) 17 % (242) (161) 50 %
Divestments
DKKm
2 (48) n.a. - (251) n.a.
Free cash flow
DKKm
(1,963) 2,761 n.a. 1,642 6,762 (76 %)
Capital employed DKKm
(14) (1,700) (99 %) (14) (1,700) (99 %)
17/40
Management’s review
Interim financial report First nine months 2022
Financials, DKKm
9M 2022 9M 2021 2021
Income statement
Revenue
96,598 47,007 77,673
EBITDA
25,361 16,043 24,296
Offshore
17,475 12,777 18,021
Sites, O&M and PPAs
6,194 8,976 13,059
Construction agreements and divestment gains
12,992 5,066 7,535
Other, incl. project development
(1,711) (1,265) (2,573)
Onshore
2,792
819
1,349
Bioenergy & Other
5,010 2,331 4,747
Other activities
84 116 179
Depreciation, amortisation and impairment
(6,962) (5,828) (8,101)
Operating profit (loss) (EBIT)
18,399 10,215 16,195
Gain (loss) on divestment of enterprises
299 (58) (742)
Net financial income and expenses
(1,551) (1,236) (2,166)
Profit (loss) before tax
17,149 8,916 13,277
Tax
(1,824) (1,287) (2,390)
Profit (loss) for the period
15,325 7,629 10,887
Balance
Assets 359,758 261,892 270,385
Equity
53,777 79,150 85,137
Shareholders in Ørsted A/S
32,413 58,129 64,072
Non-controlling interests
3,380 3,037 3,081
Hybrid capital
17,984 17,984 17,984
Interest-bearing net debt
45,701 21,211 24,280
Capital employed
99,478 100,361 109,416
Additions to property, plant, and equipment
23,750 26,900 43,941
Cash flow
Cash flow from operating activities
(8,991) 11,480 12,148
Gross investments
(27,621) (27,555) (39,307)
Divestments
24,653 10,567 21,519
Free cash flow
(11,959) (5,508) (5,640)
Financial ratios
Return on capital employed (ROCE)
1
, % 24.4 12.9 14.8
FFO/adjusted net debt
2
, % 35.3 42.5 26.3
Number of outstanding shares, end of period, '000
420,381 420,381 420,381
Share price, end of period, DKK
608 849 835
Market capitalisation, end of period, DKK billion
255 357 351
Earnings per share (EPS), DKK
35.8 16.8 24.3
Dividend yield, %
- - 1.5
Q3 2022 Q3 2021
36,541 14,510
12,317 2,984
9,652 1,304
467 1,822
9,765 (9)
(580) (509)
867 413
1,849 1,206
(51) 61
(2,530) (1,939)
9,787 1,045
124 (22)
(217) (351)
9,695 671
(340) (184)
9,355 487
359,758 261,892
53,777 79,150
32,413 58,129
3,380 3,037
17,984 17,984
45,701 21,211
99,478 100,361
9,899 11,477
(11,309) 246
(14,417) (8,757)
22,459 7
(3,267) (8,504)
24.4 12.9
35.3 42.5
420,381 420,381
608 849
255 357
22.3 1.1
- -
Business drivers 9M 2022 9M 2021 2021
Offshore
Decided (FID'ed) and installed capacity, GW
11.1
9.8 10.9
Installed capacity, GW
8.9 7.6 7.6
Generation capacity, GW
5.3 4.0 4.0
Wind speed, m/s
9.0
8.7 9.1
Load factor, %
38 35 39
Availability, %
93 94 94
Power generation, GWh
11,072 9,356 13,808
Power sales, GWh
22,182 16,229 25,020
Onshore
Decided (FID'ed) and installed capacity, GW
5.1 4.7 4.7
Installed capacity, GW
4.2 3.0 3.4
Wind speed, US, m/s
7.2 7.1 7.4
Load factor, wind, US, %
42 41 42
Load factor, solar PV, %
28 28 24
Availability, wind, US, %
93 96 96
Availability, solar PV, %
98 95 96
Power generation, GWh
9,721 5,534 8,352
Bioenergy & Other
Degree days, number
1,687
1,893 2,820
Heat generation, GWh
4,305 5,440 7,907
Power generation, GWh
4,603 4,794 6,890
Power sales, GWh
4,495 6,725 8,797
Gas sales, GWh
27,589 47,605 61,349
People and environment
Employees (FTE), end of period number
7,681 6,672 6,836
Total recordable injury rate (TRIR), YTD
3.3 3.0 3.0
Fatalities, number
- - -
Green share of energy generation, %
92 89 90
GHG intensity (scope 1 & 2), g CO
2
e/kWh 59 64 58
GHG emissions (scope 3), Mtonnes
9.0 14.3 18.2
GHG emission (scope 1 & 2), Mtonnes
1.7 1.6 2.1
Q3 2022 Q3 2021
11.1 9.8
8.9 7.6
5.3 4.0
7.7 7.6
28 27
91 93
3,246 2,286
5,600 4,803
5.1 4.7
4.2 3.0
6.0 6.4
30 33
32 27
92 98
96 98
2,723 1,904
98 81
239 402
1,363 1,028
1,339 2,271
5,706 13,580
7,681 6,672
3.3 3.0
- -
89 89
0.7 0.5
88 91
2.7 4.4
Performance highlights
1)
EBIT (last 12 months)/average capital employed.
2)
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
2021 have been restated
. See note 12 for adjusted
definition.
18/40
Management’s review
Interim financial report First nine months 2022
Quarterly overview
Financials, DKKm
Q3
2022
Q2
2022
Q1
2022
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Income statement (BP
1
comparables)
Revenue 36,541 26,295 33,762 30,666 14,510 13,553 18,944 15,559
EBITDA 12,317 3,615 9,429 8,253 2,984 8,196 4,863 5,003
Offshore 9,652 1,904 5,919 5,244 1,304 7,527 3,946 4,128
Sites, O&M and PPAs 467 2,031 3,698 3,983 1,822 2,368 4,886 4,950
Construction agreements and
divestment gains
9,765 601 2,620 2,469 (9) 5,648 (573) (149)
Other incl. project development (580) (728) (399) (1,208) (509) (489) (367) (673)
Onshore 867 1,075 850 530 413 178 228 324
Bioenergy & Other 1,849 647 2,514 2,416 1,206 503 622 643
Other activities (51) (11) 146 63 61 (12) 67 (92)
Operating profit (loss) (EBIT) 9,787 1,311 7,301 5,980 1,045 6,237 2,933 3,091
Profit (loss) for the period 9,355 269 5,701 3,258 487 5,544 1,598 2,189
Income statement (IFRS comparables)
Revenue 36,541 26,295 33,762 30,666 14,510 13,553 18,944 13,195
EBITDA 12,317 3,615 9,429 8,253 2,984 8,196 4,863 3,102
Depreciation, amortisation and
impairment losses
(2,530) (2,304) (2,128) (2,273) (1,939) (1,959) (1,930) (1,912)
Operating profit (loss) (EBIT) 9,787 1,311 7,301 5,980 1,045 6,237 2,933 1,190
Gain (loss) on divestment of enterprises 124 67 108 (684) (22) (72) 36 (291)
Net financial income and expenses (217) (486) (848) (930) (351) (466) (419) (456)
Profit (loss) before tax 9,695 893 6,561 4,361 671 5,698 2,547 442
Tax (340) (624) (860) (1,103) (184) (154) (949) 258
Profit (loss) for the period 9,355 269 5,701 3,258 487 5,544 1,598 715
Balance sheet
Assets 359,758 320,722 285,087 270,385 261,892 223,791 210,972 196,719
Equity 53,777 61,276 76,719 85,137 79,150 96,910 96,541 97,329
Shareholders in Ørsted A/S 32,413 40,091 55,704 64,072 58,129 75,842 75,835 81,376
Non-controlling interests 3,380 3,201 3,031 3,081 3,037 3,084 2,722 2,721
Hybrid capital 17,984 17,984 17,984 17,984 17,984 17,984 17,984 13,232
Interest-bearing net debt 45,701 41,449 30,026 24,280 21,211 12,067 13,190 12,343
Capital employed 99,478 102,725 106,745 109,416 100,361 108,977 109,731 109,672
Additions to property, plant, equipment 9,899 8,724 5,127 17,041 11,477 8,954 6,469 8,121
Cash flow
Cash flow from operating activities (11,309) 2,355 (37) 668 246 3,147 8,087 6,756
Gross investments (14,417) (6,372) (6,832) (11,752) (8,757) (12,133) (6,665) (8,639)
Divestments 22,459 267 1,927 10,952 7 10,591 (31) (1,519)
Free cash flow (3,267) (3,750) (4,942) (132) (8,504) 1,605 1,391 (3,402)
Financial ratios
Return on capital employed (ROCE)
2
, % 24.4 14.8 19.0 14.8 12.9 12.5 7.5 9.7
FFO/adjusted net debt
3
, % 35.3 39.0 37.5 26.3 42.5 56.9 51.7 65.0
Number of outstanding shares, end of period, '000 420,381 420,381 420,381 420,381 420,381 420,381 420,381 420,381
Share price, end of period, DKK
608 742 849 835 849 880 1,025 1,244
Market capitalisation, end of period, DKK billion 255 312 357 351 357 370 430 522
Earnings per share (EPS), DKK 22.3 0.3 13.2 7.5 1.1 12.9 2.8 1.5
Business drivers
Q2
2022
Q1
2022
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Offshore
Decided (FID'ed) and installed capacity
4
, GW 11.1 11.1 10.9 9.8 9.8 9.9 9.9
Installed capacity, GW
7.6 7.6 7.6 7.6 7.6 7.6 7.6
Generation capacity, GW
4.8 4.2 4.0 4.0 4.0 4.4 4.4
Wind speed, m/s
8.4 11.3 10.6 7.6 7.8 10.5 10.6
Load factor, %
35 54 53 27 29 50 53
Availability, %
94 95 95 93 93 95 94
Power generation, GWh
3,324 4,502 4,452 2,286 2,521 4,549 4,912
Power sales, GWh
7,416 9,166 8,791 4,803 4,541 6,885 8,561
Onshore
Decided (FID'ed) and installed capacity, GW
4.9 4.7 4.7 4.7 4.7 4.0 3.4
Installed capacity, GW
4.0 3.6 3.4 3.0 2.5 1.7 1.7
Wind speed, US, m/s
7.7 7.7 7.9 6.4 7.3 7.7 8.0
Load factor, wind, US, %
50 49 47 33 45 45 50
Availability, wind, US, %
92 96 96 98 97 93 95
Power generation, GWh
3,795 3,203 2,818 1,904 1,983 1,647 1,817
Bioenergy & Other
Degree days, number
448 1,141 927 81 487 1,325 825
Heat generation, GWh
823 3,243 2,467 402 1,148 3,890 2,230
Power generation, GWh
1,102 2,138 2,096 1,028 1,507 2,259 1,291
Power sales, GWh
1,466 1,690 2,072 2,271 2,167 2,287 2,574
Gas sales, GWh
8,891 12,993 13,744 13,580 15,079 18,945 20,441
People and environment
Employees (FTE) end of period, number
7,292 7,016 6,836 6,672 6,472 6,311 6,179
Total recordable injury rate (TRIR), YTD
2.8 1.3 3.0 3.0 3.1 3.0 3.6
Fatalities, number
- - - - - - -
Green share of energy generation, %
93 92 93 89 93 87 93
GHG intensity (scope 1 & 2), g CO
2
e/kWh
49 48 45 91 51 59 34
GHG emissions (scope 3), Mtonnes
2.6 3.7 3.9 4.4 4.6 5.3 5.9
Q3
2022
11.1
8.9
5.3
7.7
28
91
3,246
5,600
5.1
4.2
6.0
30
92
2,723
98
239
1,363
1,339
5,706
7,681
3.3
-
89
88
2.7
Load factor, solar PV, %
32 31 21 19 27 29 - -
Availability, solar PV, %
96 99 99 99 98 90 - -
GHG emissions (scope 1 & 2), Mtonnes
0.7 0.4 0.6 0.5 0.5 0.4 0.7 0.4
Income statement
The income statement (BP
1
comparables)
shows business performance numbers for
Q4 2020 to form a better like-for-like com-
parison
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 12 for adjusted definition.
4)
Nameplate capacity from Q2 2021.
19/40
Management’s review
Interim financial report First nine months 2022
Consolidated
financial statements
First nine months 2022
1 January – 30 September
20/40
Consolidated financial statements
Interim financial report First nine months 2022
1 January – 30 September
1 January – 30 September
Value adjustments for the period in the first nine
months of 2022 are mainly due to losses on power
hedges as a consequence of the increase in power
prices and, to a lesser extent, losses on gas and
inflation hedges.
Consolidated statements of income
Note Income statement, DKKm 9M 2022 9M 2021
3 Revenue 96,598 47,007
Cost of sales (72,339 ) (31,099 )
Other external expenses (4,625 ) (3,699 )
Employee costs (3,801 ) (3,125 )
Share of profit (loss) in associates and joint ventures 44 55
4 Other operating income 13,192 7,143
4 Other operating expenses (3,708 ) (239 )
Operating profit (loss) before depreciation,
amortisation, and impairment losses (EBITDA) 25,361 16,043
Amortisation, depreciation, and impairment losses on
intangible assets, and property, plant, and equipment (6,962 ) (5,828 )
Operating profit (loss) (EBIT)
Gain (loss) on divestment of enterprises 299 (58 )
Share of profit (loss) in associates and joint ventures 2 (5 )
5 Financial income 7,776 3,003
5 Financial expenses (9,327 ) (4,239 )
Profit (loss) before tax
9 Tax on profit (loss) for the period (1,824 ) (1,287 )
Profit (loss) for the period
Profit (loss) for the period is attributable to:
Shareholders in Ørsted A/S 15,037 7,074
Interests and costs, hybrid capital owners of Ørsted A/S 277 575
Non-controlling interests 11 (20 )
Profit (loss) per share
1
, DKK 35.8 16.8
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 9M 2022 9M 2021
Profit (loss) for the period 15,325 7,629
Other comprehensive income:
Cash flow hedging:
Value adjustments for the period (71,736 ) (36,733 )
Value adjustments transferred to income statement 22,854 2,977
Value adjustments transferred to balance sheet (118 ) (86 )
Exchange rate adjustments:
Exchange rate adjustments relating to net investments in foreign enterprises 1,622 3,846
Value adjustment of net investment hedges (1,970 ) (2,244 )
Value adjustments and hedges transferred to income statement 676 -
Tax:
Tax on hedging instruments 6,523 6,782
Tax on exchange rate adjustments 666 (19 )
Other:
Share of other comprehensive income of associated companies, after tax 31 6
Other comprehensive income (41,452 ) (25,471 )
Total comprehensive income (26,127 ) (17,842 )
Comprehensive income for the period is attributable to:
Shareholders in Ørsted A/S (26,431 ) (18,517 )
Interest payments and costs, hybrid capital owners of Ørsted A/S 277 575
Non-controlling interests 27 100
Total comprehensive income (26,127 ) (17,842 )
21/40
Consolidated financial statements
Interim financial report First nine months 2022
1 July – 30 September
1 July – 30 September
Consolidated statements of income (continued)
Note Income statement, DKKm Q3 2022 Q3 2021
3 Revenue 36,541 14,510
Cost of sales (28,503 ) (9,345 )
Other external expenses (1,777 ) (1,593 )
Employee costs (1,367 ) (910 )
Share of profit (loss) in associates and joint ventures (12 ) (4 )
4 Other operating income 9,759 413
4 Other operating expenses (2,324 ) (87 )
Operating profit (loss) before depreciation,
amortisation, and impairment losses (EBITDA) 12,317 2,984
Amortisation, depreciation, and impairment losses on
intangible assets, and property, plant, and equipment (2,530 ) (1,939 )
Operating profit (loss) (EBIT) 9,787 1,045
Gain (loss) on divestment of enterprises 124 (22 )
Share of profit (loss) in associates and joint ventures 1 (1 )
5 Financial income 4,685 1,033
5 Financial expenses (4,902 ) (1,384 )
Profit (loss) before tax 9,695 671
9 Tax on profit (loss) for the period (340 ) (184 )
Profit (loss) for the period 9,355 487
Profit (loss) for the period is attributable to:
Shareholders in Ørsted A/S 9,349 490
Interests and costs, hybrid capital owners of Ørsted A/S (16 ) -
Non-controlling interests 22 (3 )
Profit (loss) per share, DKK 22.3 1.1
Statement of comprehensive income, DKKm Q3 2022 Q3 2021
Profit (loss) for the period 9,355 487
Other comprehensive income:
Cash flow hedging:
Value adjustments for the period (33,176 ) (23,974 )
Value adjustments transferred to income statement 15,248 594
Value adjustments transferred to balance sheet (49 ) (38 )
Exchange rate adjustments:
Exchange rate adjustments relating to net investments in foreign enterprises 797 489
Value adjustment of net investment hedges (1,254 ) (267 )
Value adjustments and hedges transferred to income statement 676 -
Tax:
Tax on hedging instruments 477 4,936
Tax on exchange rate adjustments 268 65
Other:
Share of other comprehensive income of associated companies, after tax (6 ) (3 )
Other comprehensive income (17,019 ) (18,198 )
Total comprehensive income (7,664 ) (17,711 )
Comprehensive income for the period is attributable to:
Shareholders in Ørsted A/S (7,688 ) (17,717 )
Interest payments and costs after tax, hybrid capital owners of Ørsted A/S (16 ) -
Non-controlling interests 40 6
Total comprehensive income (7,664 ) (17,711 )
22/40
Consolidated financial statements
Interim financial report First nine months 2022
Assets and liabilities classified as held for sale
At 30 September 2022 and at 30 September 2021,
assets and related liabilities held for sale comprised
our oil pipe system in Denmark, which is an activity
in Bioenergy & Other.
Consolidated balance sheet
Note Equity and liabilities, DKKm
30 September
2022
31 December
2021
30 September
2021
Share capital 4,204 4,204 4,204
8 Reserves (66,277 ) (24,778 ) (27,553 )
Retained earnings 94,486 79,391 81,478
Proposed dividends - 5,255 -
Equity attributable to shareholders in Ørsted A/S 32,413 64,072 58,129
Hybrid capital 17,984 17,984 17,984
Non-controlling interests 3,380 3,081 3,037
Equity 53,777 85,137 79,150
Deferred tax 8,432 5,616 3,588
Provisions 13,938 15,124 13,789
Lease liabilities 7,903 6,812 4,892
12 Bond and bank debt 62,198 31,502 30,327
11 Derivatives 40,138 17,464 19,202
Contract liabilities 3,117 3,230 3,289
Tax equity liabilities 15,719 13,358 10,044
Other payables 5,412 4,682 1,276
Non-current liabilities 156,857 97,788 86,407
Provisions 828 764 533
Lease liabilities 589 720 698
12 Bond and bank debt 2,117 19,493 23,139
11 Derivatives 107,695 32,325 44,487
Contract liabilities 1,371 2,440 486
Trade payables 20,222 20,231 15,182
Tax equity liabilities 1,847 1,206 1,434
Other payables 8,858 4,768 4,832
9 Income tax 5,076 5,021 4,869
Current liabilities 148,603 86,968 95,660
Liabilities 305,460 184,756 182,067
Liabilities relating to assets classified
as held for sale 521 492 675
Equity and liabilities 359,758 270,385 261,892
Note Assets, DKKm
30 September
2022
31 December
2021
30 September
2021
Intangible assets 3,510 1,543 1,330
Land and buildings 8,009 8,066 6,186
Production assets 114,468 95,618 88,993
Fixtures and fittings, tools, and equipment 1,575 604 559
Property, plant, and equipment under construction 52,098 57,108 52,886
Property, plant, and equipment 176,150 161,396 148,624
Investments in associates and joint ventures 1,044 572 643
Other securities and equity investments 217 221 222
11 Derivatives 13,069 2,716 5,142
Deferred tax 21,719 13,281 12,820
Other receivables 3,290 2,492 2,543
Other non-current assets 39,339 19,282 21,370
Non-current assets 218,999 182,221 171,324
Inventories 17,132 15,998 14,906
11 Derivatives 51,441 14,078 23,018
Contract assets 1,344 2 2
Trade receivables 11,091 9,565 6,271
Other receivables 29,479 14,815 7,484
Receivables from associates and joint ventures 174 - -
9 Income tax 620 1,200 1,023
11 Securities 18,803 21,228 30,136
Cash 9,418 9,943 6,375
Current assets 139,502 86,829 89,215
Assets classified as held for sale 1,257 1,335 1,353
Assets 359,758 270,385 261,892
23/40
Consolidated financial statements
Interim financial report First nine months 2022
* See note 8 ‘Reserves’ for more information about reserves.
Consolidated statement of shareholders’ equity
‘Cash flow hedging’ is impacted by large losses on
hedges, mainly power hedges, due to the increase
in power prices and, to a lesser extent, by losses on
gas and inflation hedges.
2022 2021
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 (24,778 ) 79,391 5,255 64,072 17,984 3,081 85,137 4,204 (1,956 ) 74,294 4,834 81,376 13,232 2,721 97,329
Comprehensive income
for the period:
Profit (loss) for the period - - 15,037 - 15,037 277 11 15,325 - - 7,074 - 7,074 575 (20 ) 7,629
Other comprehensive income:
Cash flow hedging - (49,000 ) - - (49,000 ) - - (49,000 ) - (33,842 ) - - (33,842 ) - - (33,842 )
Exchange rate adjustments - 312 - - 312 - 16 328 - 1,482 - - 1,482 - 120 1,602
Tax on other comprehensive income - 7,189 - - 7,189 - - 7,189 - 6,763 - - 6,763 - - 6,763
Share of other comprehensive income
of associated companies, after tax - - 31 - 31 - - 31 - - 6 - 6 - - 6
Total comprehensive income - (41,499 ) 15,068 - (26,431 ) 277 27 (26,127 ) - (25,597 ) 7,080 - (18,517 ) 575 100 (17,842 )
Coupon payments, hybrid capital - - - - - (314 ) - (314 ) - - - - - (268 ) - (268 )
Tax, hybrid capital - - - - - 37 - 37 - - - - - 89 - 89
Additions, hybrid capital - - - - - - - - - - - - - 7,327 - 7,327
Disposals, hybrid capital - - - - - - - - - - - - - (2,971 ) - (2,971 )
Dividends paid - - 3 (5,255 ) (5,252 ) - (275 ) (5,527 ) - - 4 (4,834 ) (4,830 ) - (298 ) (5,128 )
Additions, non-controlling interests - - - - - - 547 547 - - 83 - 83 - 514 597
Other changes - - 24 - 24 - - 24 - - 17 - 17 - - 17
Equity at 30 September 4,204 (66,277 ) 94,486 - 32,413 17,984 3,380 53,777 4,204 (27,553 ) 81,478 - 58,129 17,984 3,037 79,150
24/40
Consolidated financial statements
Interim financial report First nine months 2022
Statement of cash flows
Our supplementary statement of gross and net
investments appears from note 6 ’Gross and net
investments’ and free cash flow (FCF) from note 2
’Segment information’.
’Cash’ according to the balance sheet as at
30 September 2022 includes ’Cash, not available
for use’ amounting to DKK 2,139 million and ’Bank
overdrafts that are part of the ongoing cash
management’ amounting to DKK 3 million.
Consolidated statement of cash flows
Note Statement of cash flows, DKKm 9M 2022 9M 2021 Q3 2022 Q3 2021
Operating profit (loss) before
depreciation, amortisation, and
impairment losses (EBITDA) 25,361 16,043 12,317 2,984
Reversal of gain (loss) on divestment
of assets (10,942 ) (5,626 ) (9,058 ) 52
Change in derivatives
(10,802 ) 11 (5,587 ) 486
Change in provisions
(1,267 ) (270 ) (312 ) (915 )
Other items
(180 ) (53 ) (26 ) (7 )
Change in inventories (1,573 ) 313 1,406 (4,830 )
Change in contract assets and liabilities (2,962 ) (404 ) 330 46
Change in trade receivables (1,371 ) 870 (2,304 ) (198 )
Change in other receivables (6,136 ) (2,475 ) (9,420 ) (1,702 )
Change in trade payables 2,576 1,373 2,037 1,535
Change in tax equity liabilities (604 ) 2,660 (583 ) 2,041
Change in other payables 653 989 862 883
Interest received and similar items 6,171 2,339
Interest paid and similar items (6,680 ) (2,936 ) (3,483 ) (1,367 )
Income tax paid (1,235 ) (1,354 )
(716 ) (168 )
Cash flows from operating activities (8,991 ) 11,480 (11,309 ) 246
Purchase of intangible assets and
property, plant, and equipment (23,162 ) (22,866 ) (10,052 ) (8,737 )
Sale of intangible assets and property,
plant, and equipment 23,920 10,126 22,033 (51 )
6 Acquisition of enterprises
(3,399 ) (2,370 ) (3,373 ) (11 )
Divestment of enterprises
Purchase of other equity investments
Purchase of securities
(1,839 ) (7,510 ) (820 ) (445 )
Sale/maturation of securities
Change in other non-current assets
Transactions with associates and
joint ventures (76 ) (29 ) (22 ) (3 )
Dividends received and capital reduction
Cash flows from investing activities (1,972 ) (20,559 ) 8,850 (8,696 )
Note Statement of cash flows, DKKm 9M 2022 9M 2021 Q3 2022 Q3 2021
Proceeds from raising of loans 34,438 15,723
Instalments on loans (22,793 ) (1,309 ) (8,897 ) 20
Instalments on leases (402 ) (340 )
(106 ) (156 )
Coupon payments on hybrid capital (314 ) (268 )
Repurchase of hybrid capital - (2,971 ) - -
Proceeds from issuance of hybrid capital - 7,327 - -
Dividends paid to shareholders in
Ørsted A/S (5,252 ) (4,830 ) - -
Transactions with non-controlling
interests 227 292 112 (38 )
Net proceeds from tax equity partners (207 ) (137 ) (70 ) (162 )
Collateral posted in relation to trading
of derivatives (41,100 ) (14,752 ) (19,873 ) (5,629 )
Collateral released in relation to trading
of derivatives 45,039 11,116 19,615 4,170
Cash flows from financing activities 9,636 9,851 4,856 7,063
Total net change in cash and cash
equivalents for the period (1,327 ) 772 2,397 (1,387 )
Cash and cash equivalents at the
beginning of the period 8,614 5,210 4,976 7,551
Total net change in cash and cash
equivalents (1,327 ) 772 2,397 (1,387 )
Exchange rate adjustments of cash
and cash equivalents (11 ) 226 (97 ) 44
Cash and cash equivalents at
30 September 7,276 6,208 7,276 6,208
25/40
Consolidated financial statements
Interim financial report First nine months 2022
Implementation of new or changed
accounting standards and interpretations
IASB has issued amended standards which
apply for the first time in 2022. None of these
amended standards and interpretations are
expected to have any significant impact on our
financial statements.
Key accounting estimates and judgements
Recognition of deferred tax assets
At 30 September 2022, we have recognised
DKK 15.4 billion (tax value) of the total net
deferred tax asset of DKK 18.7 billion (tax
value). The large net deferred tax asset
reflects the tax related to the unrealised losses
incurred on the hedges due to high power
prices. The difference of DKK 3.3 billion has
reduced equity.
Our key judgements and estimates relate to
our analysis of the probability of available tax
profits in the foreseeable future in which the
deferred tax assets can be offset. When
assessing the foreseeable future, we have
taken into consideration the long lifetimes of
our offshore and onshore renewable assets
and related secured long-term profits on
operation and maintenance agreements,
investor power purchase agreements, and on
power portfolio and gas contracts.
This section provides a description of the
accounting policies applied in our consolidated
financial statements as well as the impact of
new and amended accounting standards and
interpretations, if any.
Accounting policies
Ørsted is a listed public company, headquar-
tered in Denmark.
This interim financial report for the first nine
months of 2022 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 nine
months of 2022 follows the same accounting
policies as the annual report for 2021.
Definitions of alternative performance
measures can be found on page 84 of the
annual report for 2021.
This interim financial report contains selected
accounting policies and should therefore be
read in conjunction with the annual report for
2021.
1. Basis of reporting
Technician at
hydrogen test
facility, Avedøre,
Denmark.
26/40
Consolidated financial statements
Interim financial report First nine months 2022
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 5,997 million, which primarily relates to our
Shared Functions services as well as our B2B
business activities.
2. Segment information
9M 2022
Income statement, DKKm Offshore Onshore
Bioenergy
& Other
Reportable
segments
Other
activities/
eliminations Total
External revenue 55,405 2,256 38,942 96,603 (5) 96,598
Intra-group revenue 6,794 - (2,950) 3,844 (3,844)
1
-
Revenue 62,199 2,256 35,992 100,447 (3,849) 96,598
Cost of sales (47,328) (77) (28,756) (76,161) 3,822 (72,339)
Employee costs and other external expenses (5,543) (1,250) (1,743) (8,536) 110 (8,426)
Gain (loss) on disposal of non-current assets 10,894 43 5 10,942 - 10,942
Additional other operating income and expenses (2,787) 1,819 (491) (1,459) 1 (1,458)
Share of profit (loss) in associates and joint ventures 40 1 3 44 - 44
EBITDA 17,475 2,792 5,010 25,277 84 25,361
Depreciation and amortisation
(5,012) (1,196) (572)
(6,780)
(182)
(6,962)
Operating profit (loss) (EBIT) 12,463 1,596 4,438 18,497 (98) 18,399
Key ratios
Intangible assets and property, plant, and equipment 109,845 60,435 8,018 178,298 1,362 179,660
Assets classified as held for sale, net - - 747 747 - 747
Equity investments and non-current receivables 621 359 127 1,107 193 1,300
Net working capital, capital expenditures (5,754) (573) (41) (6,368) - (6,368)
Net working capital, work in progress 3,211 40 - 3,251 - 3,251
Net working capital, tax equity - (16,007) - (16,007) - (16,007)
Net working capital, other items 16,266 (89) 5,675 21,852 547 22,399
Derivatives, net (64,356) (9,065) (12,526) (85,947) 2,624 (83,323)
Decommissioning obligations (5,637) (1,739) (1,420) (8,796) - (8,796)
Other provisions (1,933) (41) (1,708) (3,682) (2,288) (5,970)
Tax, net 11,312 (4,706) 1,111 7,717 1,114 8,831
Other receivables and other payables, net 4,786 (274) 3 4,515 (761) 3,754
Capital employed at 30 September 68,361 28,340 (14) 96,687 2,791 99,478
Return on capital employed (ROCE), % - - - - - 24.4
Cash flow from operating activities (12,456) 1,470 1,884 (9,102) 111 (8,991)
Gross investments (18,784) (8,540) (242) (27,566) (55) (27,621)
Divestments 24,417 43 - 24,460 193 24,653
Free cash flow (FCF) (6,823) (7,027) 1,642 (12,208) 249 (11,959)
27/40
Consolidated financial statements
Interim financial report First nine months 2022
2. Segment information (continued)
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 6,092 million, which primarily relates to our
Shared Functions services as well as our B2B
business activities.
9M 2021
Income statement, DKKm Offshore Onshore
Bioenergy
& Other
Reportable
segments
Other
activities/
eliminations Total
External revenue 26,541 656 19,777 46,974 33 47,007
Intra-group revenue 4,840 (23) (639) 4,178 (4,178)
1
-
Revenue 31,381 633 19,138 51,152 (4,145) 47,007
Cost of sales (19,974) (16) (15,248) (35,238) 4,139 (31,099)
Employee costs and other external expenses (4,656) (721) (1,571) (6,948) 124 (6,824)
Gain (loss) on disposal of non-current assets 5,626 - - 5,626 - 5,626
Additional other operating income and expenses 346 923 11 1,280 (2) 1,278
Share of profit (loss) in associates and joint ventures 54 - 1 55 - 55
EBITDA 12,777 819 2,331 15,927 116 16,043
Depreciation and amortisation
(4,474) (590) (588)
(5,652)
(176)
(5,828)
Operating profit (loss) (EBIT) 8,303 229 1,743 10,275 (60) 10,215
Key ratios
Intangible assets and property, plant, and equipment 103,451 37,088 8,051 148,590 1,364 149,954
Assets classified as held for sale, net - - 694 694 - 694
Equity investments and non-current receivables 525 34 151 710 172 882
Net working capital, capital expenditures (7,009) (661) (20) (7,690) - (7,690)
Net working capital, work in progress 7,062 - - 7,062 - 7,062
Net working capital, tax equity - (10,744) - (10,744) - (10,744)
Net working capital, other items 4,657 (54) 516 5,119 72 5,191
Derivatives, net (21,045) (4,413) (11,211) (36,669) 1,140 (35,529)
Decommissioning obligations (5,802) (1,167) (1,294) (8,263) - (8,263)
Other provisions (3,903) (64) (1,276) (5,243) (816) (6,059)
Tax, net 5,458 (2,690) 2,686 5,454 (68) 5,386
Other receivables and other payables, net 254 (28) 3 229 (752) (523)
Capital employed at 30 September 83,648 17,301 (1,700) 99,249 1,112 100,361
Return on capital employed (ROCE), % - - - - - 12.9
Cash flow from operating activities 863 2,876 7,174 10,913 567 11,480
Gross investments (16,401) (10,919) (161) (27,481) (74) (27,555)
Divestments 10,685 - (251) 10,434 133 10,567
Free cash flow (FCF) (4,853) (8,043) 6,762 (6,134) 626 (5,508)
28/40
Consolidated financial statements
Interim financial report First nine months 2022
2. Segment information (continued)
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 2,390 million (Q3 2021: DKK 2,268 million), which
primarily relates to our Shared Functions services as
well as our B2B business activities.
Q3 2021, income statement and FCF, DKKm
External revenue 7,257 429 6,785 14,471 39 14,510
Intra-group revenue 1,899 (23) (234) 1,642 (1,642)
1
-
Revenue 9,156 406 6,551 16,113 (1,603) 14,510
Cost of sales (6,173) (7) (4,810) (10,990) 1,645 (9,345)
Employee costs and other external expenses (1,678) (299) (545) (2,522) 19 (2,503)
Gain (loss) on disposal of non-current assets (52) - - (52) - (52)
Additional other operating income and expenses 55 313 10 378 - 378
Share of profit (loss) in associates and joint ventures (4) - - (4) - (4)
EBITDA 1,304 413 1,206 2,923 61 2,984
Depreciation and amortisation (1,425) (261) (194) (1,880) (59) (1,939)
Operating profit (loss) (EBIT) (121) 152 1,012 1,043 2 1,045
Cash flow from operating activities (5,644) 2,465 2,881 (298) 544 246
Gross investments (6,041) (2,639) (72) (8,752) (5) (8,757)
Divestments 16 - (48) (32) 39 7
Free cash flow (FCF) (11,669) (174) 2,761 (9,082) 578 (8,504)
Q3 2022, income statement and FCF, DKKm Offshore Onshore
Bioenergy
& Other
Reporting
segments
Other
activities/
eliminations Total
External revenue 22,070 836 13,654 36,560 (19) 36,541
Intra-group revenue 2,987 - (1,318) 1,669 (1,669)
1
-
Revenue 25,057 836 12,336 38,229 (1,688) 36,541
Cost of sales (20,784) (56) (9,335) (30,175) 1,672 (28,503)
Employee costs and other external expenses (1,983) (483) (640) (3,106) (38) (3,144)
Gain (loss) on disposal of non-current assets 9,058 - - 9,058 - 9,058
Additional other operating income and expenses (1,683) 570 (513) (1,626) 3 (1,623)
Share of profit (loss) in associates and joint ventures (13) - 1 (12) - (12)
EBITDA 9,652 867 1,849 12,368 (51) 12,317
Depreciation and amortisation (1,820) (456) (190) (2,466) (64) (2,530)
Operating profit (loss) (EBIT) 7,832 411 1,659 9,902 (115) 9,787
Cash flow from operating activities (10,296) 364 (1,881) (11,813) 504 (11,309)
Gross investments (7,979) (6,322) (84) (14,385) (32) (14,417)
Divestments 22,296 (1) 2 22,297 162 22,459
Free cash flow (FCF) 4,021 (5,959) (1,963) (3,901) 634 (3,267)
29/40
Consolidated financial statements
Interim financial report First nine months 2022
Revenue was DKK 96,598 million. The
increase of 106 % relative to the first nine
months of 2021 was primarily due to the
significantly higher power and gas prices
across all markets and more assets in
operation.
Revenue from construction agreements was
10,724 million. The increase of DKK 5.6 billion
was mainly related to the divestment of 50 %
of the offshore transmission assets at
Hornsea 2 in September and the construction
of Greater Changhua 1 for partners.
Income from government grants decreased
relatively to the first nine months of 2021 due
to significantly higher power prices, which led
to a lower subsidy per MWh produced.
3. Revenue
Revenue, DKKm Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
9M 2022
total Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
9M 2021
total
Sale of gas - - 17,157 - 17,157 - - 9,227 - 9,227
Generation of power 9,296 1,829 9,694 - 20,819 4,952 665 3,525 - 9,142
Sale of power 37,685 - 5,700 (3,768) 39,617 13,457 - 3,287 (4,220) 12,524
Revenue from construction of offshore wind farms and
transmission assets 10,724 - - - 10,724 5,139 - - - 5,139
Generation and sale of heat and steam - - 1,739 - 1,739 - - 1,881 - 1,881
Distribution and transmission - - 186 (4) 182 - - 297 (1) 296
Other revenue 1,633 23 449 (23) 2,082 1,870 - 153 (3) 2,020
Total revenue from customers 59,338 1,852 34,925 (3,795) 92,320 25,418 665 18,370 (4,224) 40,229
Government grants 2,352 393 385 - 3,130 5,903 77 461 - 6,441
Miscellaneous revenue 509 11 682 (54) 1,148 60 (109) 307 79 337
Total revenue 62,199 2,256 35,992 (3,849) 96,598 31,381 633 19,138 (4,145) 47,007
Timing of revenue recognition from customers
At a point in time 46,487 1,852 23,243 (3,795) 67,787 20,052 665 7,172 (4,224) 23,665
Over time 12,851 - 11,682 - 24,533 5,366 - 11,198 - 16,564
Total revenue from customers 59,338 1,852 34,925 (3,795) 92,320 25,418 665 18,370 (4,224) 40,229
30/40
Consolidated financial statements
Interim financial report First nine months 2022
3. Revenue (continued)
Revenue, DKKm Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
Q3 2022
total Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
Q3 2021
total
Sale of gas - - 4,820 - 4,820 - - 3,803 (4) 3,799
Generation of power 4,337 783 4,390 - 9,510 1,576 316 1,219 -
3,111
Sale of power 14,453 - 2,475 (1,567) 15,361
5,917 - 766 (1,822) 4,861
Revenue from construction of offshore wind farms and
transmission assets 6,629 - - - 6,629 4 - - - 4
Generation and sale of heat and steam - - 29 - 29
- - 272 - 272
Distribution and transmission - - 65 (2) 63
- - 140 - 140
Other revenue 492 4 289 (10) 775 677 - 42 20 739
Total revenue from customers 25,911 787 12,068 (1,579) 37,187 8,174 316 6,242 (1,806) 12,926
Government grants (177) 64 84 - (29) 1,242 72 68 - 1,382
Miscellaneous revenue (677) (15) 184 (109) (617) (260) 18 241 203 202
Total revenue 25,057 836 12,336 (1,688) 36,541 9,156 406 6,551 (1,603) 14,510
Timing of revenue recognition from customers
At a point in time 21,532 787 9,549 (1,579) 30,289 6,929 316 3,012 (1,806) 8,451
Over time 4,379 - 2,519 - 6,898 1,245 - 3,230 - 4,475
Total revenue from customers 25,911 787 12,068 (1,579) 37,187 8,174 316 6,242 (1,806) 12,926
31/40
Consolidated financial statements
Interim financial report First nine months 2022
4. Other operating
income and expenses
‘Gain on divestment of assets’ in 9M 2022
primarily related to the 50 % farm-down of
Hornsea 2 in September and the 50 %
farm-down of Borkum Riffgrund 3 in February,
resulting in a gain of DKK 9.3 billion and
DKK 1.6 billion, respectively.
In 9M 2021, ‘Gain on divestment of assets’
primarily concerned the 50 % farm-down of
Borssele in May and adjustments to finalised
offshore projects.
The increase in ’US tax credits and tax equity
income’ was mainly due to the commissioning
of new onshore wind farms in 2021, which
have had full impact in 2022, and the
commissioning of new onshore wind and solar
farms in 9M 2022.
‘Ineffective hedges’ in 9M 2022 included
volume-ineffective hedges as a consequence
of lower-than-expected offshore generation,
resulting in having hedged too large volumes.
Furthermore, it included price-ineffective
hedges mainly related to proxy hedges, which
we cannot document as being ’effective’ from
a hedge accounting perspective and therefore
have recognised in the income statement.
5. Financial income
and expenses
The table shows net financial income and expenses
corresponding to our internal reporting.
Exchange rate adjustments and hedging contracts
entered into to hedge currency risks are presented
net under the item ’Exchange rate adjustments, net’.
The increase in ‘Interest expenses, net’ is mainly driven
by increased interest expenses on our issued bonds
and bank loans due to new loans, higher interest
expenses on our inflation indexed bond as a
consequence of increased inflation rates, and higher
bank fees, among others related to new credit
facilities.
‘Value adjustments of derivatives, net’ and ‘Value
adjustments of securities, net’ are both impacted by
the increase in interest rates in 2022.
Net financial income and expenses, DKKm 9M 2022 9M 2021 Q3 2022 Q3 2021
Interest expenses, net (1,339) (684) (657) (275)
Interest expenses, leasing (196) (159) (81) (58)
Interest element of provisions, etc. (364) (313) (125) (112)
Tax equity partner's contractual return (814) (490) (251) (181)
Value adjustments of derivatives, net 1,675 132 559 15
Exchange rate adjustments, net 1,303 627 924 337
Value adjustments of securities, net (1,823) (518) (574) (140)
Other financial income and expenses 7 169 (12) 63
Net financial income and expenses (1,551) (1,236) (217) (351)
Other operating income, DKKm 9M 2022 9M 2021 Q3 2022 Q3 2021
Gain on divestment of assets 11,009 5,754 9,069 -
US tax credits and tax attributes 1,844 902 597 307
Other compensation 128 296 31 67
Miscellaneous operating income 211 191 62 39
Total other operating income 13,192 7,143 9,759 413
Other operating expenses, DKKm 9M 2022 9M 2021 Q3 2022 Q3 2021
Ineffective hedges, etc. 3,451 - 2,191 -
Loss on divestment of assets 67 128 11 52
Miscellaneous operating expenses 190 111 122 35
Total other operating expenses 3,708 239 2,324 87
32/40
Consolidated financial statements
Interim financial report First nine months 2022
OSTWIND International S.A.S., and OSTWIND
Engineering S.A.S.
The acquisition of Ostwind constitutes
Ørsted’s entry into the sizeable and growing
On 19 September 2022, we acquired Ostwind,
a German and French onshore wind platform,
and obtained all of the voting equity interests
in OSTWIND Erneuerbare Energien GmbH,
OSTWINDpark Rotmainquelle GmbH & Co. KG,
German and French onshore markets and
substantially expands Ørsted’s onshore
footprint in Europe. Together with the
acquisition of Brookfield Renewable’s Ireland
and UK onshore wind platform in 2021 and the
6. Acquisition of enterprises
recent entry into the Spanish onshore market,
Ørsted’s onshore renewables platform now
covers the US market and four of the largest
growth markets in Europe at scale.
The total purchase price is DKK 4,065 million,
including an accrued purchase price of
DKK 260 million. Of the purchase price
allocation, DKK 2,342 million is allocated to
‘Property, plant, and equipment’, consisting of
operating wind and solar projects and projects
under construction or in advanced develop-
ment. DKK 1,718 million is allocated to
goodwill related to greenfield wind and solar
development.
Since the acquisition date, the contributed
revenue and result after tax from Ostwind has
been immaterial.
If the acquisition had been made on 1 January
2021, the first nine months’ revenue would
have been DKK 239 million, and loss after tax
would have been DKK 185 million. As part of
the acquisition process, we have incurred costs
of DKK 30 million, which have been expensed
in our income statement in the Onshore
segment.
The fair values of the assets and liabilities are
not considered final until 12 months after the
acquisition date.
Cash flows used for acquisitions, DKKm Ostwind Other 9M 2022 9M 2021 Q3 2022 Q3 2021
Fair value at time of acquisition:
Other intangible assets than goodwill 167 - 167 452 167 -
Property, plant, and equipment 2,342 - 2,342 5,182 2,342 -
Joint ventures 313 26 339 33 313 -
Contract assets and liabilities, net (76) - (76) - (76)
Trade receivables 135 - 135 236 135 -
Other receivables 73 - 73 163 73 -
Receivables from associates and joint ventures 174 - 174 - 174 -
Cash 432 - 432 146 432 -
Interest-bearing debt, excl. leases (437) - (437) (2,273) (437) -
Provisions (10) - (10) (47) (10) -
Derivatives - - - (456) - -
Deferred tax (525) - (525) (634) (525) -
Other liabilities (241) - (241) (312) (241) -
Net assets acquired 2,347 26 2,373 2,490 2,347 -
Goodwill 1,718 - 1,718 - 1,718 -
Purchase price 4,065 26 4,091 2,490 4,065 -
Cash, available and acquired (432) - (432) (142) (432) -
Contingent consideration - - - 22 - 11
Accrued purchase price (260) - (260) - (260) -
Cash flow used for acquisition of enterprises 3,373 26 3,399 2,370 3,373 11
Purchase price 4,065 26 4,091 2,490 4,065 -
Adjustments for cash (432) - (432) (146) (432) -
Adjustments for interest-bearing debt 437 - 437 2,273 437 -
Adjustments for other debt and NWC items (65) - (65) - (65)
Adjustments for cash, debt and NWC items in JVs 1,118 - 1,118 - 1,118
Enterprise value 5,123 26 5,149 4,617 5,123 -
33/40
Consolidated financial statements
Interim financial report First nine months 2022
8. Reserves
7. Gross and net
investments
’Value adjust-
ments of hedging
reserve’ in the first
nine months of
2022 are mainly a
result of losses on
power hedges due
to the increase in
power prices and,
to a lesser extent,
losses on gas and
inflation hedges.
Gross and net investments, DKKm 9M 2022 9M 2021 Q3 2022 Q3 2021
Cash flow from investing activities (1,972) (20,559) 8,850 (8,696)
Dividends received and capital reductions
reversed (16) (28) 6 -
Purchase and sale of securities, reversed (555) 5,300 (107) (119)
Sale of non-current assets, reversed (24,107) (9,998) (22,195) 59
Interest-bearing debt in acquired enterprises and
asset groups (972) (2,274) (972) (1)
Restricted cash in acquired enterprises 1 4 1 -
Gross investments (27,621) (27,555) (14,417) (8,757)
Transactions with non-controlling interests
in connection with divestments 546 569 264 66
Sale of non-current assets 24,107 9,998 22,195 (59)
Divestments 24,653 10,567 22,459 7
Net investments (2,968) (16,988) 8,042 (8,750)
Reserves 2022, DKKm
Foreign
currency
translation
reserve
Hedging
reserve
Total
reserves
Reserves at 1 January 1,475 (26,253) (24,778)
Exchange rate adjustments 1,606 - 1,606
Value adjustments of hedging reserve - (73,706) (73,706)
Value adjustments transferred to:
Revenue - 10,970 10,970
Other operating income 574 8,875 9,449
Other operating expenses - 3,797 3,797
Financial income and expenses - (686) (686)
Property, plant, and equipment - (118) (118)
Tax:
Tax on hedging and currency adjustments 233 6,956 7,189
Movement in comprehensive income
for the period 2,413 (43,912) (41,499)
Total reserves including tax
at 30 September 3,888 (70,165) (66,277)
Total reserves excluding tax
at 30 September 4,132 (84,292) (80,160)
Reserves 2021, DKKm
Reserves at 1 January (3,829) 1,873 (1,956)
Exchange rate adjustments 3,726 - 3,726
Value adjustments of hedging reserve - (38,977) (38,977)
Value adjustments transferred to:
Revenue - 2,942 2,942
Financial income and expenses - 35 35
Profit (loss) from discontinued operations - (86) (86)
Tax:
Tax on hedging and currency adjustments (513) 7,276 6,763
Movement in comprehensive income for
the period 3,213 (28,810) (25,597)
Total reserves including tax
at 30 September (616) (26,937) (27,553)
Total reserves excluding tax
at 30 September (1,068) (33,860) (34,928)
34/40
Consolidated financial statements
Interim financial report First nine months 2022
Tax on profit (loss) for the period
Tax on profit (loss) was DKK 1,824 million in
9M 2022 compared to DKK 1,287 million in
9M 2021. The effective tax rate for the first
nine months of 2022 was 11 %.
The effective tax rate was affected by the
50 % farm-downs of Hornsea 2 and Borkum
Riffgrund 3, the recognition of a deferred tax
liability in the US related to tax equity
contributions for the onshore wind part of
Helena Energy Center, and the continued
recognition of deferred tax liabilities in the US
related to tax equity partnerships for offshore
wind farms in our north-east cluster and for
Ocean Wind 1. The deferred tax liabilities for
the offshore wind farms will increase until
COD.
Effective tax rate
The effective tax rate for the first nine months of
2022 was calculated on the basis of the profit (loss)
before tax.
‘Other adjustments’ include changes in tax rates,
movements in uncertain tax positions, tax concerning
previous years, and non-recognised tax losses.
Accounting policies
Effective tax rate
The estimated average annual tax rate is
separated into four different categories: 1) ordinary
business activities, 2) gain (loss) on divestments,
3) impacts from tax equity partnerships in the US,
and 4) other adjustments which are not related to
the current year’s profit (loss).
9. Tax on profit (loss) for the period
Wind technicians
at Plum Creek,
Wayne County,
Nebraska, the US.
9M 2022 9M 2021
Tax for the period, DKK
Profit (loss)
before tax Tax Tax in %
Profit (loss)
before tax Tax Tax in %
New tax equity, deferred tax liability (902) n.a. (1,168) n.a.
Gain (loss) on divestment of enterprises 11,103 - n.a. 5,355 - n.a.
Other adjustments 444 n.a. 517 n.a.
Remaining Ørsted business 6,046 (1,366) 23 % 3,561 (636) 18 %
Effective tax for the period 17,149 (1,824) 11 % 8,916 (1,287) 14 %
35/40
Consolidated financial statements
Interim financial report First nine months 2022
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 and
after hedging has increased
significantly in 9M 2022 due to the
increase in power prices.
The exposures are based on market
prices as of 30 September2022.
Our energy exposures have been
reduced significantly due to hedging.
Energy exposure 1 October 2022 - 30 September 2027
DKKbn
Currency exposure 1 October 2022 - 30 September 2027
DKKbn
10. Market risks
Due to significant increases in energy
prices and inflation rates, we have
incurred a substantial loss on
unrealised hedges and power
purchase agreements (PPAs), which
is reflected in the hedging reserve in
note 8. At 30 September 2022, the
pre-tax loss of the hedging reserve
was DKK 84.3 billion, of which
DKK 82.6 billion will be transferred
to EBITDA over the coming periods,
as shown in the table. The losses will
be countered by higher sales prices
on our future power production.
EBITDA impact from hedges, DKKbn
Market risk management
Our most significant market risks relate to:
energy and commodity prices
foreign exchange rates
interest rates and inflation.
The overall objective of our risk management
is to:
increase the predictability of the short-term
earnings and cash flow by securing the price
of energy and currency
protect the long-term real value of
shareholders’ investments in Ørsted by
matching fixed nominal cash flows from our
assets with fixed nominal debt.
We are currently reviewing our hedging
framework.
For more details on our market risks, please
see notes 6.1-6.4 in the annual report for 2021.
36/40
Consolidated financial statements
Interim financial report First nine months 2022
Market values are determined by the
Risk Management function, which reports to
the Group CFO. The development in market
values is monitored on a continuing basis and
reported to the Group Executive Team.
Significant non-observable inputs
Market values based on non-observable input
comprise primarily long-term contracts on the
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.
The table shows the
movements during the year
in the total market value
(assets and liabilities) of
derivatives valued on the
basis of non-observable
inputs.
11. Fair value measurement
purchase or sale of power and gas. Since there
are no active markets for the long-term power
and gas prices, the market values have been
determined through an estimate of the future
prices.
Estimating non-observable power prices
Since our CPPAs are normally settled on the
actual production, and the power prices avail-
able in the market are based on a constant
production (flat profile), we take into account
that our expected production is not constant,
and thus, our CPPAs will not be settled against
a flat profile (intermittency adjustment). For
the majority of our markets, the flat profile
power price can be observed for a maximum of
four to six years in the market, after which an
active market no longer exists.
The table shows the
significant unobservable
inputs used in the fair value
measurements categorised
as ‘non-observable input’,
together with a sensitivity
analysis as at 30 September
2022.
If intermittency-adjusted
power prices in Germany as
of 30 September 2022 in-
creased by 25 %, the market
value would decrease by
DKK 2,364 million.
Assets Liabilities
Fair value hierarchy
DKKm Inventories Securities Derivatives Derivatives
2022
Quoted prices 5,675 - 24,260 29,782
Observable input - 18,803 38,792 93,505
Non-observable input - - 1,458 24,546
Total 30 September 2022 5,675 18,803 64,510 147,833
2021
Quoted prices 2,901 - 25,688 32,776
Observable input - 30,136 2,022 26,365
Non-observable input - - 450 4,548
Total 30 September 2021 2,901 30,136 28,160 63,689
Non-observable input per commodity
price input, DKKm 2022 2021
US power prices (8,247) -
German power prices (9,679) (2,398)
UK power prices (3,408) (211)
Irish power prices (997) (682)
Other power prices (1,732) (523)
Gas prices 975 (284)
Total (23,088) (4,098)
Derivatives valued on the basis of
non-observable input, DKKm 2022 2021
Market value at 1 January (7,448) (82)
Value adjustments through profit or loss (1,464) (449)
Value adjustments through other
comprehensive income (11,037) (2,751)
Sales/redemptions 1,430 59
Purchases/issues (3,445) (878)
Transferred from quoted prices and
observable input (1,228) -
Transferred to observable input 104 3
Market value at 30 September before
deferred gain (loss) (23,088) (4,098)
Overview of significant
non-observable inputs and
sensitivities
Power price per MWh (DKK) Sensitivity (DKKm)
Weight
average
Monthly
minimum
Monthly
maximum
+25 % -25 %
Intermittency-adjusted power price
Germany (2025-2034) 882 443 1,611 (2,364) 2,364
Ireland (2023-2042) 1,165 792 4,359 (520) 520
US ERCOT (2022-2030) 230 131 810 (3,575) 3,614
US SPP (2022-2030) 227 173 523 (566) 595
US MISO (2022-2033) 421 330 913 (717) 744
37/40
Consolidated financial statements
Interim financial report First nine months 2022
Changes in bond and bank debt
In September 2022, Ørsted issued three green
bonds at a total nominal amount of GBP 950
million and EUR 900 million. The bonds were
issued under the existing debt issuance
programme (EMTN programme):
EUR 900 million with maturity in 2031 at a
fixed interest rate of 3.25 %
GBP 375 million with maturity in 2034 at a
fixed interest rate of 5.125 %
GBP 575 million with maturity in 2042 at a
fixed interest rate of 5.375 %.
Interest-bearing net debt totalled DKK 45,701
million at 30 September 2022, which was an
increase of DKK 21,421 million relative to
31 December 2021. The main changes in the
composition of our net debt compared to
31 December 2021 was an increase in bond debt of
DKK 20,223 million.
12. Interest-bearing debt and FFO
Market value of bond and bank debt
At 30 September 2022, the market values of
bond and bank debts were DKK 50.1 billion
and DKK 8.9 billion, respectively. The market
value have been impacted by the increased
interest rates in Q3 2022.
We aim to have a
long-term FFO/
adjusted NIBD at
above 25 %, in line with
the rating agencies.
Interest-bearing debt and interest-bearing assets
DKKm
30 September
2022
31 December
2021
30 September
2021
Interest-bearing debt:
Bank debt 9,415 16,318 17,422
Bond debt 54,900 34,677 36,044
Total bond and bank debt 64,315 50,995 53,466
Tax equity liability 1,559 1,296 734
Lease liability 8,492 7,532 5,590
Other interest-bearing debt 3,056 535 626
Total interest-bearing debt 77,422 60,358 60,416
Interest-bearing assets:
Securities 18,803 21,228 30,136
Cash 9,418 9,943 6,375
Other receivables 2,730 4,150 1,946
Receivables in connection with divestments 770 757 748
Total interest-bearing assets 31,721 36,078 39,205
Total net interest-bearing debt 45,701 24,280 21,211
Adjusted definition
We have adjusted our
definition of FFO/
adjusted net debt. We
have excluded
variation margin
payments in our FFO
definition, to reflect the
changes implemented
by the rating agencies.
Furthermore, we have
excluded ’other
interest-bearing debt’
and ’other interest-
bearing receivables’
from adjusted net debt,
to align with the
common methodology
used by the rating
agencies.
Comparative figures
for 2021 are restated in
accordance with the
new definition of
FFO/adjusted net debt.
Adjusted interest-bearing net debt
DKKm
30 September
2022
31 December
2021
30 September
2021
Total interest-bearing net debt 45,701 24,280 21,211
50 % of hybrid capital 8,992 8,992 8,992
Other interest-bearing debt, add back (3,056) (535) (626)
Other receivables, add back 2,730 4,150 1,946
Receivables in connection with
divestments, add back 770 757 748
Cash and securities not available
for distribution, excluding repo loans 2,910 2,130 977
Total adjusted interest-bearing
net debt 58,047 39,774 33,248
Funds from operations (FFO)/
adjusted interest-bearing net debt
30 September
2022
31 December
2021
30 September
2021
Funds from operations (FFO)/
adjusted interest-bearing net debt 35.3% 26.3% 42.5%
Funds from operations (FFO) LTM
1
DKKm
30 September
2022
31 December
2021
30 September
2021
EBITDA 33,614 24,296 21,047
Change in provisions and other
adjustments (1,002) (422) (2,546)
Change in derivatives (13,406) (2,050) 2,618
Variation margin (add back) 17,140 (627) 944
Reversal of gain (loss) on divestment
of assets (13,236) (7,920) (5,175)
Income tax paid (1,260) (1,380) (1,115)
Interest and similar items,
received/paid (380) (467) (834)
Reversal of interest expenses
transferred to assets (756) (782) (616)
50 % of coupon payments on
hybrid capital (237) (215) (215)
Dividends received and
capital reductions 17 29 39
Funds from operations (FFO) 20,494 10,462 14,147
1
Last 12 months.
38/40
Consolidated financial statements
Interim financial report First nine months 2022
Financial resources
DKK billion
13. Financial resources
value is settled on an ongoing basis
through receipt or placing of collateral.
Trading OTC where we accept the credit
risk that will occur if we gain on the
transaction.
We are trading under both type of agreements
to increase the number of counterparties with
whom we are engaging with to achive the
most optimal prices.
To mitigate and limit the potential negative
impact on our cash position from temporary
fluctuations in market prices, we actively
manage the volume of trades between trading
with and without collateral arrangements.
As of 30 September 2022 , 20 % (2021: 51 %)
of our power and gas trades and 86 %
(2021: 82 %) of our currency, inflation, and
interest rate hedges had daily margin
settlements.
Financial resources
At 30 September, financial resources
amounted to DKK 88.0 billion (31 December
2021: DKK 43.2 billion). The financial resources
were in particular built up during Q3 to ensure
sufficient liquidity to cope with collateral
payments and continuing investments in the
green transformation.
During the quarter, we issued green bonds
denominated in GBP and EUR with proceeds
equivalent to DKK 14.8 billion. We also
established a new EUR 2 billion two-year
committed facility and bilateral credit facilities
with an aggregate amount of DKK 9 billion.
Collateral and margin postings
When we trade in derivatives to execute our
hedging strategy, we have two alternatives:
Trading on exchanges where the market
DKK 43.2 billion
DKK 88.0 billion
Collateral and margin postings
DKK billion
DKK 12.3 billion
DKK 33.5 billion
Initial margin and variation margins
relate to energy hedges, and the
credit support annex (CSA) relates to
currency, inflation, and interest rate
hedges. Other collateral mainly
relates to insurance liabilities and
escrow accounts. Further securities
can be placed as collateral in repo
transactions as part of our cash
management.
To limit cash impact, we also provide non-cash
collateral as parent company and bank
guarantees, where possible. At the end of
September 2022, we had covered EUR 1 billion
in collateral for initial margins on energy
hedges through a parent company guarantee.
Our collateral and margin payments related
to trading with derivatives and collateral
related to insurance liabilities and escrow
accounts have increased from DKK 12.3 billion
at 31 December 2021 to DKK 33.5 billion at
30 September 2022. The increase was
primarily driven by the large increase in power
and gas prices. Collateral payments related to
initial margins and variation margins increased
by DKK 5.3 billion and DKK 19.0 billion,
respectively, during the first nine months of the
year, and amounted to DKK 30.2 billion at
30 September 2022.
39/40
Consolidated financial statements
Interim financial report First nine months 2022
14. Subsequent events
Farm-down of onshore assets
In October 2022, we closed our first ever
agreement to farm down a portfolio of four
onshore projects to the US investor Energy
Capital Partners (ECP). Under the agreement,
ECP will acquire a 50 % ownership stake in the
onshore wind farms Lincoln Land Wind, Plum
Creek Wind, and Willow Creek Wind and the
solar farm Muscle Shoals with a total
capacity of 862 MW geographically spread
over four US states. The transaction success-
fully recycles a material amount of capital
that will support our capacity globally by
2030.
The value of the transaction is USD 410
million on a 50 % basis. Ørsted will remain
having control of the companies after the
divestment and continue to consolidate the
companies 100 % with no financial impact on
revenue, EBITDA, profit after tax, capital
employed, net interest-bearing debt and
equity. The received proceeds will impact
cash and long-term interest-bearing debt.
However, our adjusted interest-bearing net
debt will benefit from the transaction.
Forest engineers,
Jutland, Denmark.
40/40
Consolidated financial statements
Interim financial report First nine months 2022
*Employee elected board member
Executive Board:
Board of Directors:
Statement by the Executive Board
and the Board of Directors
20/40
Management’s review
Interim financial report First nine months 2022
CVR no. 362137 28
Tel.: +45 9955 1111
Group Communication
Martin Barlebo
Tel.: +45 9955 9552
Investor Relations
Rasmus Keglberg Hærvig
Tel.: +45 9955 9095
Front page image
Offshore technicians on top of the nacelle of
a tur
bine, Gode Wind farm off the coast of
Germany, the North Sea
Publication
3 November 2022