Ørsted’s Divestment Of Borkum Riffgrund 2 Pushes 2017 Earnings To High End Of Guidance

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Danish offshore wind energy powerhouse Ørsted has announced this week that it has completed the divestment of its 450 megawatt Borkum Riffgrund 2 Offshore Wind Farm, leading the company to predict its earnings for 2017 will reach the high end of previous guidance.

In August of this year, then-DONG Energy (which has since changed its name to Ørsted) announced that it would enter into an agreement with leading infrastructure investors Global Infrastructure Partners, to farm down a 50% stake in the 450 MW (megawatt) Borkum Riffgrund 2 Offshore Wind Farm, located in the German North Sea, off the coast of Lower Saxony.

Specifically, Global Infrastructure Partners III (GIP III), an equity fund managed by Global Infrastructure Partners (GIP), would acquire a 50% stake in the 450 MW project from DONG Energy/Ørsted for approximately €1,170 million (subject to approval by competition authorities).

Announced on Monday, Ørsted revealed that the two groups had finalized the farm-down, but added that the acquisition price will be paid in 2017 which immediately impacts Ørsted’s financial outlook for 2017.

Early November, Ørsted published its third-quarter earnings results in which it raised guidance for its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the full-year 2017. Previous EBITDA guidance for the full-year 2017 had been in the range of DKK 17-19 billion, but Ørsted — on the back of strong quarterly growth and the divestment of 50% of the Walney Extension — raised it to be in the range of DKK 19 to 21 billion.

This week, Ørsted has confirmed that it now expects EBITDA for the full-year 2017 to be approximately DKK 21 billion, the high end of its guidance.

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Joshua S Hill

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