Interim financial report
First half year 2022
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Interim financial report
First half year 2022
Management’s review
Overview
CEO’s review 3
At a glance 6
Outlook 7
Results H1 8
Business units’ Q2 results 14
Performance highlights 17
Quarterly overview 18
Results Q2 12
Financial statements
Consolidated financial statements
Consolidated statements of income H1 20
Consolidated balance sheet 22
Consolidated statement of shareholder’s equity 23
Consolidated statement of cash flows 24
Notes
1. Basis of reporting 25
2. Segment information 26
3. Revenue 29
4. Other operating income and expenses 31
5. Financial income and expenses 31
6. Gross and net investments 32
7. Reserves 32
8. Tax on profit (loss) for the period 33
9. Market risks 34
10. Fair value measurement 35
11. Interest-bearing debt and FFO 36
Management’s statement
Statement by the Executive Board and the
Board of Directors
38
Consolidated statements of income Q2 21
12. Subsequent events 37
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, 11 August 2022
at 15:00 CEST:
Denmark: +45 78 72 32 50
International: +44 333 300 9032
USA: +1 646 722 4903
The earnings call can be followed live here:
https://edge.media-server.com/mmc/p/ejsw6ke4
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 performance report, H1 2022
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Management’s review
Interim financial report First half year 2022
of Borkum Riffgrund 3 in Q1 2022 and the
upcoming farm-down of Hornsea 2. The in-
crease is primarily due to higher earnings in
Bioenergy & Other and Onshore as described
in the outlook section.
Construction and operational progress
We are currently constructing two of the
largest offshore wind farms in the world,
Hornsea 2 and Greater Changhua 1 & 2a. In
addition, our early stage projects South Fork,
Borkum Riffgrund 3, and Gode Wind 3 are all
progressing according to plan.
At Hornsea 2, all wind turbines have been fully
commissioned and are commercially opera-
tional. Remaining reliability runs are planned
to be concluded shortly, and we expect
the wind farm to be fully commissioned later
this month.
At Greater Changhua 1 & 2a, we have success-
fully installed 95 jacket foundations and 48
wind turbines. We continue to make good
progress in all areas of the construction, had
first power in April, and will continue the
installation in the coming months. However,
due to COVID-19 related delays, we now
expect to commission the last wind turbines in
2023.
In our US Onshore business, the wind part of
Helena Energy Center was commissioned in
June, and we had good progress on the con-
struction of our 201 MW Sunflower Wind
project in Kansas.
Financials
Operating profit (EBITDA) for the first half of
the year amounted to DKK 13.0 billion in line
with the same period last year. EBITDA exclud-
ing new partnerships increased by 3.7 billion.
Earnings from our wind and solar assets in
operation amounted to DKK 8.0 billion, which
was an increase of DKK 0.2 billion compared
to the same period last year, mainly due to
ramp-up of generation from new assets and
higher wind speeds. However, this was partly
offset by a DKK 2.0 billion negative effect
from overhedging and ineffective hedges due
to later than expected commissioning of
Hornsea 2.
We continued to see strong results from our
CHP plants in the first half of the year, as the
high power prices continued, and the business
successfully managed to keep the plants
running with high availability. Earnings from
our gas business were higher than in the same
period last year and was mainly related to
optimising our north-western European gas
activities in a very volatile market. Our deci-
sion to unwind gas hedges during spring relat-
ed to the Gazprom Export contract to balance
our risk if gas supplies from Russia were to
cease led to a net loss on the Gazprom Export
sourcing contract during H1 2022.
We have increased our full-year EBITDA guid-
ance with DKK 1 billion to DKK 20-22 billion
excluding earnings from new partnerships, i.e.
excluding the gain from the 50 % farm-down
CEO’s review
Our Hornsea 3 project in the UK was successfully awarded a CFD and
Onshore expanded into Continental Europe. Full-year EBITDA guid-
ance increased.
Financials
Our operating profit (EBITDA) for the first
half of the year amounted to DKK 13.0 bil-
lion (including new partnerships), in line with
the same period last year. EBITDA excluding
new partnerships increased by 48 % to DKK
11.4 billion.
We have increased our full-year EBITDA
guidance excluding new partnerships by
DKK 1 billion to DKK 20-22 billion.
Construction and operational progress
At Hornsea 2, all wind turbines have been
fully commissioned and are commercially
operational. We expect the wind farm to be
fully commissioned later this month.
At Greater Changhua 1 & 2a, we continue to
make good progress on construction. Due to
COVID-19 related delays, we now expect to
commission the last wind turbines in 2023.
The wind part of Helena Energy Center, the
US, and Kennoxhead 1, Scotland, were suc-
cessfully commissioned in June.
Our green share of heat and power genera-
tion amounted to 92 %.
Business development
We were awarded a contract for difference
(CFD) for building our Hornsea 3 Offshore
Wind Farm in UK’s Offshore Leasing Round
4. Hornsea 3 will be the world’s single big-
gest wind farm with a capacity of 2,852 MW.
We acquired Ford County Wind in Illinois, the
US. The 121 MW onshore wind farm further
strengthens our presence in the MISO region.
We marked our entry into the Spanish on-
shore market with four partnerships to pur-
sue early-stage solar and onshore wind pro-
jects.
We signed an agreement to acquire the
German and French onshore wind platform
Ostwind.
Our ‘Green Fuels for Denmark’ project re-
ceived IPCEI status.
We took several steps to improve biodiversi-
ty in the areas where we build and operate
offshore wind farms.
Highlights
Management’s review
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Interim financial report
First half year 2022
award is the single biggest award to date, and
we look very much forward to expanding our
footprint in our biggest market, the UK.
BOEM released its draft environmental impact
statement (DEIS) for Ocean Wind 1 in the US
with content as expected, one week ahead of
schedule. We are making good progress
maturing the project. We also received our
environmental impact assessment (EIA) for Xu
Feng 1 & 2 in Taiwan (with a total capacity of
1,200 MW), which means that the projects are
now eligible for the upcoming auctions.
With the Hornsea 3 win and maturation of
other offshore projects, we are building a
strong substantiated pipeline and have been
outpacing our ambition the last couple of
years. We are well on our way to achieve our
ambition of 30 GW installed offshore wind by
2030.
We joined forces with TotalEnergies to jointly
submit bids for the two Dutch offshore wind
tenders ‘Holland Coast West’. Our aim is to
achieve net-positive impact on biodiversity
and the Dutch energy system. The Holland
Coast West wind farms are located approx. 53
km off the Dutch coast and have a combined
capacity of nearly 1.5 GW. We expect an
outcome of the tenders later this year.
Power-to-X
Green Fuels for Denmark, which aims to pro-
duce large quantities of sustainable green
fuels for road, maritime and air transport in the
Copenhagen area, has received IPCEI status
from the European Commission. This was an
important step to get access to part of the
DKK 850 million, which the Danish govern-
ment has earmarked as funding for two
Construction of the solar PV farm Old 300 and
the solar part of Helena Energy Center have
been delayed due to continued challenges in
the solar supply chain. We still expect to
commission Old 300 in H1 2023 and the solar
part of Helena Energy Center in 2023.
In Europe, our 62 MW onshore wind farm Ken-
noxhead 1 in Scotland was commissioned in
June.
Due to Ørsted refusing to pay in roubles, Gaz-
prom Export suspended its deliveries under the
sourcing contract on 1 June 2022. We had
prepared for such a scenario and have been
able to continue to supply gas to our custom-
ers through the European market. We currently
have no hedges related to the Gazprom Export
supply contract.
The green share of heat and power generation
amounted to 92 %, an increase of 3 percentage
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 the scarcity of
sustainable biomass following the Russian
invasion of Ukraine.
Business development
Offshore
We were awarded a CFD for building our
Hornsea 3 Offshore Wind Farm in the UK’s
Offshore Leasing Round 4. Hornsea 3 will be
the world’s single biggest wind farm with a
capacity of 2,852 MW and will be located
adjacent to our Hornsea 1 and Hornsea 2 wind
farms. The wind farm will provide power to
more than 3.2 million households in the UK and
is expected to be operational by 2027. This
We were awarded CFD for building our Hornsea 3 offshore
wind farm in the UK round 4. Hornsea 3 will be the world’s
single biggest wind farm with a capacity of 2,852 MW.
”
shortlisted projects. When fully developed, the
project aims to reach a total electrolysis
capacity of 1,300 MW.
We entered into a letter of intent with Danish
district heating transmission companies to
take the first formal step to utilise surplus heat
from carbon capture and Power-to-X at
Avedøre Power Station for district heating and
thus use fewer wood pellets in the long term.
Onshore
We signed an agreement to acquire the Ger-
man and French onshore wind platform Ost-
wind. The agreement is based on an enterprise
valuation of Ostwind of EUR 689 million. The
final price will be subject to customary adjust-
ments. The acquisition further strengthens our
European onshore platform and adds 152 MW
in operation and under construction, 526 MW
of advanced development projects to be built
by 2026, and approx. a further 1 GW develop-
ment pipeline. We expect to complete the
acquisition in H2 2022.
We acquired Ford County Wind in Illinois, the
US. The 121 MW onshore wind farm further
strengthens our presence in the MISO region,
where we acquired Lincoln Land last year.
We marked our entry into the Spanish market
with four partnerships to pursue early-stage
solar and onshore wind projects. The new
partners (Glide Energy, Rolwind, ARBA Ener-
gías Renovables, and Ereda) all have extensive
experience in greenfield development and
together form a complementary geographic
footprint. The aim of the partnerships is to
develop onshore wind and solar PV projects in
Spain that allow Ørsted to participate in the
upcoming Spanish grid auctions expected later
in 2022 and put in bids for rights to develop a
multi-GW pipeline of solar and wind energy
across Spain.
Management’s review
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Interim financial report
First half year 2022
Sustainability and reputation
At Ørsted, we have set the strong ambition
to deliver a net-positive biodiversity impact in
all new renewable energy projects that we
take investment decision on in 2030 at the
latest. Over the last quarter, we have an-
nounced several initiatives to improve biodi-
versity at our wind farms.
In Taiwan, we are planning a world-first
attempt to support coral reefs by growing
corals on offshore wind turbine foundations.
Together with Taiwanese partners, we will
test the concept in the tropical waters of
Taiwan this summer. The aims are to deter-
mine whether corals can be successfully
grown on offshore wind turbine foundations
and to evaluate the potential positive biodi-
versity impact of scaling up the initiative.
We also announced a partnership with ARK
Nature where we will test the potential of
rewilding principles to restore vital ocean
biodiversity as we speed up the global transi-
tion to renewable energy.
Furthermore, we are partnering with Lincoln-
shire and Yorkshire Wildlife Trusts to help
restore the biodiversity around the Humber, a
large tidal estuary on the east coast of
Northern England. The flagship project will
invest more than GBP 2.5 million to restore
parts of the Humber on an ambitious scale
not seen before through the planting of three
hectares of salt marsh and four hectares of
seagrass and the creation of a biogenic reef
through the introduction of half a million
native oysters.
In Denmark, we have partnered with WWF
Denmark to test how 3D-printed reefs can
benefit biodiversity in the Kattegat strait.
This is the first time 3D-printed reefs are used
in Danish waters, and they will complement
existing boulder reefs that Ørsted estab-
lished when constructing the Anholt Off-
shore Wind Farm in 2012-13.
Lastly, we have invested in Spoor and will
help test and commercialise a new technolo-
gy to collect more and better birdlife data at
our wind farms around the world. The new
cost-effective and highly scalable bird moni-
toring tool will ultimately support our net-
positive biodiversity ambition.
Since the launch of our new safety pro-
gramme ‘Be aware, take care’, we have seen
a positive impact on our safety numbers and
our TRIR was down from 3.1 in H1 2021 to 2.8
in H1 2022.
Finally, we are honoured to be named as one
of the 100 most influential companies for the
second year running by TIME.
Mads Nipper
Group President and CEO
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Management’s review
Interim financial report First half year 2022
At a glance
Key figures H1 2022
Revenue DKK 60.1 bn
Gross investments DKK 13.2 bn
Capital employed DKK 102.7 bn
TRIR
2.8
ROCE, last 12 months 14.8 %
Ørsted
Number of employees: 7,292
EBITDA, DKKbn
13.0
61%
24 %
15 %
Offshore
Onshore Bioenergy & Other
Green share of energy generation, %
89
92
2021 2022
Offshore
Number of employees: 3,686
EBITDA, DKKbn
Availability, %
94
94
2021 2022
9.2
9.9
9.7
2021 2022 Norm
6.1
6.2
5.4
1.6
2021 2022
11.5
7.8
Wind speed, m/s
Onshore
Number of employees: 286
EBITDA, DKKbn
Availability, wind, the US, %
95
94
2021 2022
7.5
7.7
7.5
2021 2022 Norm
0.4
1.9
2021 2022
Wind speed, the US, m/s
Bioenergy & Other
Number of employees: 974
EBITDA, DKKbn
76
77
2021 2022
1.1
3.2
2021 2022
Green share of energy generation, %
Degree days, number
1,812
1,589
2021 2022
New partnerships
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Management’s review
Interim financial report First half year 2022
EBITDA
We have increased our EBITDA guidance ex-
cluding new partnership agreements by DKK
1.0 billion to DKK 20-22 billion. The increase is
primarily due to the higher earnings in Bioener-
gy & Other and Onshore as described below.
Our directional guidance for Bioenergy & Oth-
er has changed from ‘lower’ to ‘significantly
higher’, mainly due to:
–
higher earnings 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
–
we also expect higher full-year earnings
from our ‘Gas markets & Infrastructure’
business, where we were able to optimise
our north-western European gas activities
and lock in gains from the offtake flexibility
in some of our sourcing contracts and gas
storages in a very volatile market leading
to higher than expected locked-in earnings
in H1 2022. We do not currently expect
further impact from the Gazprom Export
contract in H2 2022 (in addition to the net
loss we realised in Q1 2022).
The directional guidance for Onshore is
‘significantly higher’, which is unchanged rela-
tive to the guidance in the annual report. How-
ever, earnings in the first half of the year have
been higher than expected mainly due to high-
er achieved prices in both the US and Europe.
Furthermore, the acquisition of the German
and French onshore platform Ostwind and
Ford County Wind is expected to contribute
with higher sites earnings in the last part of
the year.
The directional guidance for Offshore is
‘significantly higher’, which is unchanged rela-
tive to the guidance in the annual report.
This guidance is based on an assumption of
normal wind speeds in the remainder of the
year. The current very high energy price lev-
els and volatility in combination with the
asymmetry in the accounting treatment of
proxy hedges under IFRS 9, as described on
page 9, have had a negative impact on
EBITDA in H1 2022. If we see further increases
in energy prices, volatility, and changes in
price correlations, there is a risk of more of
our proxy hedges being deemed as ineffec-
tive and that we consequently have to rec-
ognise them in EBITDA in 2022 instead of the
future periods they relate to. As always, the
guidance is subject to a number of uncertain-
ties (see box below).
Gross investments
We have increased our gross investments
guidance by DKK 5.0 billion to DKK 43-47
billion. The increase is due to the expected
closing of the EUR 689 million acquisition of
Ostwind.
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
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.
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Management’s review
Interim financial report First half year 2022
Financial results
Revenue
Power generation from offshore and onshore
assets increased by 39 % and totalled 14.8
TWh in H1 2022. Ramp-up of generation from
Hornsea 2, Western Trail, Haystack, Lincoln
Land, Old 300, and the wind part of Helena
Energy Center, full-year effect from assets
commissioned in H1 2021, and higher wind
speeds were partly offset by the 50 % farm-
down of Borssele 1 & 2 in May 2021.
Heat generation amounted to 4.1 TWh, 19 %
lower than in the same period last year mainly
due to warmer weather. Thermal power gen-
eration decreased by 14 % and amounted to
3.2 TWh, primarily driven by lower CHP gener-
ation (warmer weather) and lower power con-
densing generation due to scarcity in the sup-
ply of sustainable biomass.
Our renewable share of generation was 92 %
in H1 2022, 3 percentage points higher than
last year driven by higher share of generation
from offshore and onshore renewables.
Revenue amounted to DKK 60.1 billion. The
increase of 85 % relative to H1 2021 was pri-
marily due to the significantly higher gas and
power prices across all markets.
EBITDA
Operating profit (EBITDA) totalled DKK 13.0
billion, of which the gain from the 50 % farm-
down of Borkum Riffgrund 3 amounted to DKK
1.6 billion. Thus, EBITDA excluding new partner-
ships amounted to DKK 11.4 billion, an increase
of DKK 3.7 billion compared to the same peri-
od last year.
Earnings from wind and solar assets in opera-
tion amounted to DKK 8.0 billion, an increase
of DKK 0.2 billion compared to the same peri-
od last year. Ramp-up of generation from
Hornsea 2 and our onshore assets contributed
positively to our site earnings together with
higher wind speeds (approx. DKK 1.3 billion
compared to H1 2021 and DKK 0.2 billion com-
pared to a normal wind year). This was partly
offset by ineffective hedges, mainly as a con-
sequence of later-than-expected commission-
ing of wind turbines at Hornsea 2 resulting in
having hedged too large volumes (approx.
effect in H1 2022 was DKK 2.0 billion). Further-
more, we saw negative effects from high prices
and volatility (balancing costs, trading activi-
ties (incl. price-ineffective hedges—explained in
the box on next page) and outages), from ex-
panding our portfolio (higher OPEX, BSUoS and
TNUoS tariffs) and from the farm-down of 50
% of Borssele.
EBITDA excluding new partnerships, DKKbn
Results H1
Financial results, DKKm H1 2022 H1 2021 %
Revenue
60,057 32,497 85 %
EBITDA
13,044 13,059 (0 %)
Depreciation and amortisation
(4,432) (3,889) 14 %
Operating profit (loss) (EBIT)
8,612 9,170 (6 %)
Gain (loss) on divestment of enterprises
175 (36) n.a.
Financial items, net
(1,334) (885) 51 %
Profit before tax
7,454 8,245 (10 %)
Tax on profit (loss) for the period
(1,484) (1,103) 35 %
Tax rate
20 % 13 % 7 %p
Profit (loss) for the period
5,970 7,142 (16 %)
- New partnerships
1,610 5,355 (70 %)
- EBITDA excl. new partnerships
11,434 7,704 48 %
EBITDA from partnerships amounted to DKK
3.2 billion and was mainly related to the DKK
1.6 billion gain on the 50 % farm-down of
Borkum Riffgrund 3 (new partnership) in Q1
2022. Earnings from existing partnerships
amounted to DKK 1.6 billion, an increase of
DKK 1.9 billion compared to H1 2021. In H1
2022, we had positive earnings from finalised
projects and construction work for partners
at Greater Changhua 1. In addition, we re-
versed DKK 0.5 billion of the DKK 0.8 billion
warranty provision towards our partners we
recognised in Q1 2021 related to cable pro-
tection system issues at some of our offshore
wind farms. We now expect lower costs to
reinstate the integrity of the cables. As men-
tioned in our Q1 2022 report, our updated
estimate for the total costs to be covered by
us is DKK 1.3 billion, down from DKK 3.0 billion
Offshore Onshore Bio & Other
Management’s review
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Interim financial report
First half year 2022
previously.
EBITDA from our CHP plants amounted to DKK
2.4 billion, an increase of DKK 1.4 billion com-
pared to the same period last year. The in-
crease was mainly due to higher realised pow-
er prices together with higher sales of ancillary
services. As we initially only hedge the power
we cogenerate with heat, we have been able
to benefit from the high power prices on our
condensing power generation. However, this
was partly offset by a negative effect from
price-ineffective hedges.
EBITDA from our gas business contributed with
earnings of DKK 0.8 billion in H1 2022, an in-
crease of DKK 0.5 billion compared to the
same period last year. The increase was to a
large extent driven by optimisation of 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 to
unwind gas hedges related to the Gazprom
Export contract during spring to balance our
risk if gas supplies from Russia were ceased led
to a net loss on the Gazprom Export sourcing
contract in the first half of the year.
EBIT
EBIT decreased by DKK 0.6 billion to DKK 8.6
billion in H1 2022, primarily as a result of higher
depreciation driven by more assets in opera-
tion.
Financial income and expenses
Net financial income and expenses amounted
to DKK -1.3 billion compared to DKK -0.9 billion
in H1 2021. The higher net expenses were main-
ly due to capital losses on the bond portfolio
due to increasing interest rates and higher
agreed returns on tax equity contributions due
to more onshore assets in operation.
Tax and tax rate
Tax on profit for the period amounted to DKK
1.5 billion, DKK 0.4 higher than in the same
period last year. The effective tax rate was 20
% and was impacted by the tax-exempt gain
of DKK 1.6 billion from the 50 % farm-down of
Borkum Riffgrund 3, from the recognition of
deferred taxes related to tax equity contribu-
tion for the wind part of Helena Energy Center
in the US, and from prior year adjustments.
Profit for the period
Profit for the period totalled DKK 6.0 billion,
DKK 1.2 billion lower than in H1 2021. The de-
crease was mainly due to higher depreciation,
financial expenses, and taxes as explained
above.
Cash flows and net debt
Cash flows from operating activities
Cash flows from operating activities totalled
DKK 2.3 billion in H1 2022 compared to DKK
11.2 billion in H1 2021. The decrease was mainly
driven by a cash outflow from work in pro-
gress in H1 2022 versus a cash inflow in H1
2021. Furthermore, cash flow was negatively
impacted by higher variation margin pay-
ments on unrealised hedges and higher gas,
fuel, and ROC storage.
In H1 2022, we had a net cash outflow from
work in progress of DKK 2.3 billion, mainly
from construction work at Greater Changhua 1
and the Hornsea 2 offshore transmission asset.
In H1 2021, we had a net cash inflow of DKK 3.8
Price-ineffective hedges under IFRS 9
In 2021, we started reporting according to IFRS 9 instead of the previous ‘Business Perfor-
mance’ principle, as it had become easier to apply IFRS hedge accounting for our energy
hedges. However, as we hedge up to five years ahead and within markets with low liquidity,
we often use proxy hedging in addition to hedges that directly matches our exposures. In
periods with ‘normal’ price levels and volatility, the impact of proxy hedging is insignificant.
However, due to the very high energy prices and volatility in 2022, this has led to a larger
part of our trades being deemed ineffective under IFRS 9 (if value of proxy hedge is larger
than the change in the exposure), compared to the former business performance principle.
Consequently, we have recognised the negative market value of these ineffective hedges in
EBITDA in our Offshore and Bioenergy segments. Compared with the former business perfor-
mance principle we have therefore included a higher loss on hedges in the current period at
the benefit of a lower loss in future periods.
Cash flow and net debt, DKKm H1 2022 H1 2021 %
Cash flows from operating activities
2,318 11,234 (79 %)
EBITDA
13,044 13,059 (0 %)
Reversal of gain (loss) on divestments of assets
(1,884) (5,678) (67 %)
Change in derivatives
(5,215) (475) 998 %
Change in provisions
(955) 645 n.a.
Other items
(154) (46) 235 %
Interest expense, net
(254) (636) (60 %)
Paid tax
(519) (1,186) (56 %)
Change in work in progress
(2,348) 3,754 n.a.
Change in tax equity partner liabilities
(21) 619 n.a.
Change in other working capital
624 1,178 (47 %)
Gross investments
(13,204) (18,798) (30 %)
Divestments
2,194 10,560 (79 %)
Free cash flow
(8,692) 2,996 n.a.
Net debt, beginning of period
24,280 12,343 97 %
Free cash flow
8,692 (2,996) n.a.
Dividends and hybrid coupon paid
5,692 5,254 8 %
Addition of lease obligations
1,137 423 169 %
Issuance of hybrid capital, net
- (4,356) n.a.
Exchange rate adjustments, etc.
1,648 1,399 18 %
Net debt, end of period
41,449 12,067 243 %
Management’s review
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Interim financial report
First half year 2022
Divestments amounted to DKK 2.2 billion in H1
2022 and were mainly related to the 50 %
farm-down of Borkum Riffgrund 3 with pro-
ceeds (NIBD impact) of DKK 1.9 billion and
payments from our 25 % partner in Ocean
Wind 1. In H1 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 totalled DKK 41.5
billion at the end of June 2022 against DKK
24.3 billion at the end of 2021. The increase
was mainly due to a negative free cash flow of
DKK 8.7 billion and dividend payments of DKK
5.7 billion.
Equity
Equity was DKK 61.3 billion at the end of June
2022 against DKK 85.1 billion at the end of
2021. The reduction during H1 2022 was driven
by unrealised losses on the hedge reserve for
power hedges and, to some extent, gas hedg-
es due to the significantly increasing prices. At
the end of June 2022, the post-tax hedging
and currency translation reserve amounted to
DKK 49.2 billion. The reserve will be matched
by higher future revenue from the underlying
activities when the contracts fall into delivery.
Approx. 60 % of the reserve will materialise
before 31 December 2023, thus gradually in-
creasing equity again.
Capital employed
Capital employed was DKK 102.7 billion at the
end of June 2022 against DKK 109.4 billion at
the end of 2021, as the before-mentioned unre-
alised losses on power and gas hedges more
than outweighed new investments.
billion, mainly from the divestment of the
Hornsea 1 offshore transmission asset, only
partly offset by construction work regarding
the offshore transmission asset at Hornsea 2.
During H1 2022, we tied up additional DKK 4.0
billion, net, in variation margin payments on
unrealised hedges (part of ‘Change in deriva-
tives’) and initial margin payments at clearing
houses (part of ‘change in trade receivables’)
due to the increasing and volatile power and
gas prices:
–
the variation margin payments were a cash
outflow of DKK -8.0 billion, of which DKK -
6.4 billion related to power hedges in Off-
shore and DKK -1.6 billion related, primarily,
to gas hedges in our end-customer business
activities in Bioenergy & Other.
–
the initial margin payments were a cash
inflow of DKK 4.0 billion.
–
during the second quarter we issued parent
company guarantees in total of EUR 1 bil-
lion to reduce our initial margin payments
and, to some extent, variation margin pay-
ments.
Investments and divestments
Gross investments amounted to DKK 13.2 bil-
lion against DKK 18.8 billion in H1 2021. The
main investments in H1 2022 were:
–
offshore wind farms (DKK 10.8 billion), in-
cluding Greater Changhua 1 & 2a in Taiwan,
Hornsea 2 in the UK, and our portfolio of US
projects
–
onshore wind and solar PV farms (DKK 2.2
billion), including the construction of Sun-
flower Wind, Old 300, Helena Energy Cen-
ter, Haystack, and Kennoxhead 1.
Financial ratios
Return on capital employed (ROCE)
Return on capital employed (ROCE, last 12
months) was 14.8 % at the end of H1 2022.
The increase of 2.3 percentage points com-
pared to the same period last year was at-
tributable to a higher EBIT over the 12-month
period.
Credit metric (FFO/adjusted net debt)
Since the energy crunch commenced at the
end of Q3 last year, the increasing and highly
volatile market prices have had a significant
impact on the collateral posted for hedging
and trading of our energy exposures. At the
end of June, we had a total of approx. DKK
12.9 billion posted in collateral payments
(variation margin, initial margin and treasury
collateral). Consequently, our 12-month roll-
ing FFO/NIBD stood at 18 %, down from 63 %
a year ago. Although these collateral-
postings are only temporary, we have taken
several actions to further improve our finan-
cial resources, including a EUR 1 billion par-
ent company guarantee issuance in Q2 to
reduce initial margin and, to some extent,
variation margin payments.
Adjusted for collateral postings (for margin
payments) over the last 12-month period,
FFO/NIBD would have been 46 % (all other
things being equal).
Capital employed
Offshore
Onshore
Bioenergy & Other
DKK 103 billion
0 %
21 %
79 %
Key ratios, DKKm, % H1 2022 H1 2021 %
ROCE 14.8 12.5 2 %p
Adjusted net debt 53,495 22,036 143 %
FFO/adjusted net debt 17.6 62.9 (45 %p)
ROCE and FFO/adjusted net debt is specified in notes 2 and 11.
We remain committed to our goal of an
FFO/NIBD level of 25 %, and expect to be
around that level at the end of the year, if no
further collateral needs to be posted.
Non-financial results
Green share of energy generation
The green share of heat and power genera-
tion amounted to 92 % in H1 2022 compared
to 89 % in H1 2021. The 3 percentage points
increase was driven by more wind and solar
assets in operation and higher wind speeds
Management’s review
11/38
Interim financial report
First half year 2022
(+12 percentage points), partially offset by low-
er biomass-based heat and power generation
(-9 percentage points).
Greenhouse gas emissions
Our greenhouse gas emissions from heat and
power generation (scope 1 and 2) were broadly
on a level with H1 2021, but with a higher share
from coal and oil and a lower share from gas.
Greenhouse gas intensity from our heat and
power generation and other operating activi-
ties decreased to 49 g CO
2
e/kWh in H1 2022
against 56 g CO
2
e/kWh in H1 2021. The de-
crease was mainly driven by the higher genera-
tion from our onshore and offshore assets.
Greenhouse gas emissions from our supply
chain and sales activities (scope 3) decreased
by 36 % to 6.3 million tonnes in H1 2022. This
was primarily due to 36 % lower gas sales and
a fall in emissions from COD of renewable as-
sets.
Safety
In H1 2022, we had 37 total recordable injuries
(TRIs), of which 24 injuries were related to con-
tractors’ employees. This was an increase of 2
injuries compared to the same period last year.
The number of hours worked was 13.3 million
hours, an increase of 17 % compared to H1 2021.
During H1 2022, the total recordable injury rate
(TRIR) decreased from 3.1 in H1 2021 to 2.8 in H1
2022.
Gode Wind 2, off the
German coast in the
North Sea.
Taxonomy-eligible KPIs
The taxonomy-eligible share of revenue was 68 %, whereas the eligible share of
EBITDA was 91 %, gross investments was 98 %, and OPEX was 80 %, in H1 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 H1 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 Perfor-
mance Report for H1 2022.
12/38
Management’s review
Interim financial report First half year 2022
EBITDA
Operating profit (EBITDA) totalled DKK 3.6
billion compared to DKK 8.2 billion in Q2 2021.
In May 2021, we divested 50 % of Borssele
resulting in a farm-down gain of DKK 5.4 bil-
lion. Thus, EBITDA excluding new partnerships
was DKK 0.8 billion higher than in Q2 2021.
Earnings from offshore and onshore assets in
operation were DKK 0.6 billion higher than the
same period last year and amounted to DKK
3.3 billion. The increase was mainly due to
ramp-up of generation from Hornsea 2 and our
onshore assets as well as from higher wind
speeds (approx. DKK 0.8 billion). This was part-
ly offset by overhedging and ineffective hedg-
es across the offshore portfolio in Q2 2022
(approx. effect was DKK -0.4 billion), including
later than expected commissioning of wind
turbines at Hornsea 2, and slightly lower than
normal wind speeds. Furthermore, we saw
negative effects from high prices and volatility
(balancing costs, trading activities (incl. price-
ineffective hedges) and outages), from expand-
ing our portfolio (higher OPEX, BSUoS and
TNUoS tariffs) and from the farm-down of 50
% of Borssele.
EBITDA from our CHP plants almost doubled
relative to the same period last year and
amounted to DKK 0.6 billion. The increase was
mainly due to higher achieved power prices. As
we initially only hedge the power we cogener-
ate with heat, we have been able to benefit
from the high power prices on our condensing
power generation. However, this was partly
offset by a negative effect from price-
ineffective hedges.
Earnings from our gas business were DKK 0.1
billion, a DKK 0.2 billion decrease compared to
the same period last year, mainly due to lower
earnings from our gas storage activities.
Financial income and expenses
Net financial income and expenses amounted
to DKK -0.5 billion in Q2 2022, in line with the
same period last year.
Tax and tax rate
Tax on profit for the period amounted to DKK
0.6 billion in Q2 2022 compared to DKK 0.2
billion in Q2 2021. The effective tax rate in Q2
2022 was 70 % and was significantly impacted
by the recognition of deferred taxes related to
tax equity contribution for the wind part of
Helena Energy Center in the US.
Profit for the period
Profit for the period totalled DKK 0.3 billion,
DKK 5.3 billion lower than Q2 2021. The de-
crease was primarily due to the gain from the
50 % farm-down of Borssele 1 & 2 and a higher
depreciation due to more assets in operation.
Results Q2
Financial results, DKKm Q2 2022 Q2 2021 %
Revenue
26,295 13,553 94 %
EBITDA
3,615 8,196 (56 %)
Depreciation and amortisation
(2,304) (1,959) 18 %
Operating profit (loss) (EBIT)
1,311 6,237 (79 %)
Gain (loss) on divestment of enterprises
67 (72) n.a.
Financial items, net
(486) (466) 4 %
Profit before tax
893 5,698 (84 %)
Tax on profit (loss) for the period
(624) (154) 305 %
Tax rate
70 % 3 % 67 %p
Profit (loss) for the period
269 5,544 (95 %)
- New partnerships
- 5,355 n.a.
- EBITDA excl. new partnerships
3,615 2,841 27 %
Offshore Onshore Bio & Other
EBITDA excluding new partnerships, DKKbn
13/38
Management’s review
Interim financial report First half year 2022
Cash flows and net debt
Cash flows from operating activities
Cash flows from operating activities totalled
DKK 2.4 billion in Q2 2022 compared to DKK
3.1 billion in Q2 2021. The decrease of DKK 0.8
billion was mainly due to the higher value of
gas, fuel, and ROC storage due to both higher
volumes and significantly higher prices. In con-
trast, our cash flow benefitted from the issu-
ance of a parent company guarantee to re-
duce our funds tied up in initial margin and to
some extent variation margin payments at
clearing houses by EUR 1 billion.
In Q2 2022, we had a net cash outflow from
work in progress of DKK 1.4 billion, mainly from
construction work at Greater Changhua 1. In
Q2 2021, we had a net cash outflow of DKK 0.9
billion, mainly from the construction of off-
shore transmission asset at Hornsea 2.
We received tax equity contributions in Q2
2022 for the wind part of Helena Energy Cen-
ter, and in Q2 2021 we received tax equity con-
tributions for Permian Energy Center.
Investments and divestments
Gross investments amounted to DKK 6.4 bil-
lion against DKK 12.1 billion in Q2 2021. The
main investments in Q2 2022 were:
–
offshore wind farms (DKK 5.3 billion), in-
cluding Greater Changhua 1 & 2a in Taiwan,
Hornsea 2 in the UK, and our portfolio of
US projects
–
onshore wind and solar PV farms (DKK 1.0
billion), including the construction of Old
300, Sunflower Wind, Helena Energy Cen-
ter, Haystack, and Kennoxhead 1.
Divestments amounted to DKK 0.3 billion in
Q2 2022 and were mainly related to payments
from our 25 % partner in Ocean Wind 1. In Q2
2021, divestments amounted to DKK 10.6 bil-
lion and were mainly related to the 50 % farm-
down of Borssele 1 & 2.
Cash flow and net debt, DKKm Q2 2022 Q2 2021 %
Cash flows from operating activities
2,355 3,147 (25 %)
EBITDA
3,615 8,196 (56 %)
Reversal of gain (loss) on divestments of assets
(21) (5,458) (100 %)
Change in derivatives
(1,251) 336 n.a.
Change in provisions
(190) 15 n.a.
Other items
(89) 15 n.a.
Interest expense, net
(37) (382) (90 %)
Paid tax
(288) (313) (8 %)
Change in work in progress
(1,423) (857) 66 %
Change in tax equity partner liabilities
475 866 (45 %)
Change in other working capital
1,564 729 115 %
Gross investments
(6,372) (12,133) (47 %)
Divestments
267 10,591 (97 %)
Free cash flow
(3,750) 1,605 n.a.
Net debt, beginning of period
30,026 13,190 128 %
Free cash flow
3,750 (1,605) n.a.
Dividends and hybrid coupon paid
5,411 172 n.a.
Addition of lease obligations
1,084 194 459 %
Exchange rate adjustments, etc.
1,178 116 916 %
Net debt, end of period
41,449 12,067 243 %
14/38
Management’s review
Interim financial report First half year 2022
Highlights
– We were awarded a contract for differ-
ence (CFD) for building our Hornsea 3 Off-
shore Wind Farm in the UK.
– At Hornsea 2, all wind turbines have been
fully commissioned and are commercially
operational. We expect the wind farm to
be fully commissioned later this month.
– Green Fuels for Denmark received IPCEI
status.
Financial results Q2 2022
Power generation increased by 32 % to 3.3
TWh in Q2 2022. The increase was due to ramp
up at Hornsea 2 and higher wind speeds. This
was only partly offset by the farm-down of 50
% of Borssele in May 2021.
Wind speeds amounted to a portfolio average
of 8.4 m/s, which was higher than in Q2 2021
(7.8 m/s), but below the normal wind speeds
expected in the second quarter (8.7 m/s). Avail-
ability ended at 94 %, slightly higher than the
same period last year.
Revenue increased by 94 % to DKK 17.3 billion.
Revenue from offshore wind farms in operation
increased by 42 % to DKK 4.8 billion, mainly
driven by higher generation and higher power
prices for the merchant part of the portfolio.
Revenue from power sales almost doubled to
DKK 10.4 billion due to the higher power prices
and higher volumes sold.
Revenue from construction agreements in-
creased by DKK 2.3 billion, mainly related to
the construction of Greater Changhua 1 for
partners.
EBITDA decreased by DKK 5.6 billion and
amounted to DKK 1.9 billion.
EBITDA from Sites, O&M, and PPAs amounted
to DKK 2.0 billion in Q2 2022. Despite a posi-
tive impact from higher wind speeds in the
quarter (approx. DKK 0.8 billion) and ramp-up
of generation at Hornsea 2, EBITDA decreased
by 14 %. This was primarily due to overhedging
and ineffective hedges across the offshore
portfolio (approx. DKK -0.4 billion), including
later-than-expected commissioning of wind
turbines at Hornsea 2 and slightly lower than
normal wind speeds. Furthermore, we saw
negative effects from high prices and volatility
(balancing costs, trading activities (incl. price-
ineffective hedges) and outages), from expand-
ing our portfolio (higher OPEX, BSUoS and
TNUoS tariffs) and from the farm-down of 50
% of Borssele.
EBITDA from partnerships amounted to DKK
0.6 billion and related to existing partnerships,
mainly construction work at Greater Chang-
hua 1 for partners. Q2 2021 was positively im-
pacted by the farm-down of 50 % of Borssele
(DKK 5.4 billion). Adjusted for new partner-
ships, EBITDA from existing partnerships in-
creased by DKK 0.4 billion.
EBITDA from other activities, including project
development, amounted to DKK -0.7 billion,
DKK 0.2 billion more than in Q2 2021, and was
mainly related to expensed project develop-
ment cost.
Financial results Q2 2022 Q2 2021 %
Business drivers
Decided (FID'ed) and installed capacity GW
11.1 9.8 13 %
Installed capacity
GW
7.6 7.6 0 %
Generation capacity
GW
4.8 4.0 20 %
Wind speed
m/s
8.4 7.8 8 %
Load factor
%
35 29 6 %p
Availability
%
94 93 1 %p
Power generation
GWh
3,324 2,521 32 %
Denmark
385 386 (0 %)
United Kingdom
2,284 1,326 72 %
Germany
372 332 12 %
The Netherlands
262 451 (42 %)
Other
22 26 (15 %)
Power sales GWh 7,416 4,541 63 %
Power price, LEBA UK
GBP/MWh
188 86 119 %
British pound
DKK/GBP
8.8 8.6 2 %
Financial performance
Revenue
DKKm
17,336 8,940 94 %
Sites, O&M and PPAs
4,756 3,344 42 %
Power sales
10,355 5,412 91 %
Construction agreements
2,356 34 n.a.
Other
(131) 150 n.a.
EBITDA
DKKm
1,904 7,527 (75 %)
Sites, O&M, and PPAs
2,031 2,368 (14 %)
Construction agreements and divestment gains 601 5,648 (89 %)
Other, incl. project development (728) (489) 49 %
Depreciation
DKKm
(1,671) (1,502) 11 %
EBIT
DKKm
233 6,025 (96 %)
Cash flow from operating activities
DKKm
46 1,301 (96 %)
Gross investments
DKKm
(5,257) (5,793) (9 %)
Divestments
DKKm
176 10,702 (98 %)
Free cash flow DKKm
(5,035) 6,210 n.a.
Capital employed DKKm
80,485 87,862 (8 %)
H1 2022 H1 2021 %
11.1 9.8 13 %
7.6 7.6 0 %
4.8 4.0 20 %
9.9 9.2 7 %
44 39 5 %p
94 94 0 %p
7,826 7,070 11 %
1,027 932 10 %
5,146 3,851 34 %
936 943 (1 %)
662 1,286 (49 %)
56 58 (3 %)
16,582 11,426 45 %
219 82 167 %
8.8 8.6 3 %
37,142 22,225 67 %
8,619 9,029 (5 %)
24,332 7,859 210 %
4,095 5,135 (20 %)
96 202 (52 %)
7,823 11,473 (32 %)
5,727 7,254 (21 %)
3,227 5,075 (36 %)
(1,131) (856) 32 %
(3,192) (3,049) 5 %
4,631 8,424 (45 %)
(2,160) 6,507 n.a.
(10,805) (10,360) 4 %
2,121 10,669 (80 %)
(10,844) 6,816 n.a.
80,485 87,862 (8 %)
O&M: Operation and maintenance agreements, PPAs: Power purchase agreements
Offshore
15/38
Management’s review
Interim financial report First half year 2022
Highlights
– Wind part of Helena Energy Center, the US,
and Kennoxhead 1, Scotland, successfully
commissioned in June.
– We acquired Ford County Wind in Illinois,
the US.
– We signed an agreement to acquire the
German and French onshore wind platform
Ostwind.
– We marked our entry into the Spanish on-
shore market.
Financial results Q2 2022
Power generation from our operating onshore
assets almost doubled relative to Q2 2021 and
amounted to 3.8 TWh. The increase was due to
the commissioning of the Western Trail, Hay-
stack, and Lincoln Land wind farms and the
solar PV farms Permian Energy Center and
Muscle Shoals. Assets from the acquisition of
Brookfield Renewable Ireland in June last year,
contributed with 0.2 TWh. In Q2 2022, the wind
speed across the portfolio was 7.7 m/s, which
was higher than both last year (7.3 m/s) and for
a normal wind year (7.5 m/s).
Revenue was up DKK 0.6 billion relative to Q2
2021 and amounted to DKK 0.7 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 in both the US and Europe.
In the US we benefitted from the higher power
prices during the ramp-up phase on 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 Q2 2022 amounted to DKK 1.1 bil-
lion, DKK 0.9 billion higher than in the same
period last year. The increase was due to the
higher 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 Q2 2022 Q2 2021 % H1 2022 H1 2021 %
Business drivers
Decided (FID'ed) and installed capacity GW 4.9 4.7 5 % 4.9 4.7 5 %
Installed capacity
GW
4.0 2.5 62 % 4.0 2.5 62 %
Wind speed, US
m/s
7.7 7.3 4 % 7.7 7.5 3 %
Load factor, wind, US
%
50 45 11 % 49 45 10 %
Load factor, solar PV
%
31 29 7 % 26 29 (11 %)
Availability, wind, US
%
92 97 (5 %) 94 95 (1 %)
Availability, solar PV
%
99 90 10 % 99 90 10 %
Power generation
GWh
3,795 1,983 91 % 6,998 3,630 93 %
US, wind
3,057 1,621 89 % 5,732 3,220 78 %
US, solar PV
567 322 76 % 856 370 131 %
Europe
171 39 335 % 410 39 944 %
US dollar DKK/USD
7.0 6.2 13 % 6.8 6.2 10 %
Financial performance
Revenue
DKKm
730 107 582 % 1,420 227 526 %
EBITDA
DKKm
1,075 178 504 % 1,925 406 374 %
Sites
571 (32) n.a. 1,067 12 n.a.
Production tax credits and tax attributes 679 312 118 % 1,247 595 110 %
Other, incl. project development (175) (102) 72 % (389) (201) 94 %
Depreciation
DKKm
(382) (201) 90 % (740) (329) 125 %
EBIT
DKKm
693 (23) n.a. 1,185 77 1439 %
Cash flow from operating activities
DKKm
1,294 857 51 % 1,106 411 169 %
Gross investments
DKKm
(997) (6,275) (84 %) (2,218) (8,280) (73 %)
Divestments
DKKm
44 (1) n.a. 44 - n.a.
Free cash flow
341 (5,419) n.a. (1,068) (7,869) (86 %)
Capital employed
21,671 17,968 21 % 21,671 17,968 21 %
16/38
Management’s review
Interim financial report First half year 2022
Financial results Q2 2022
Heat generation decreased by 28 % in Q2 2022
due to warmer weather. Power generation
decreased by 27 % due to lower CHP genera-
tion (warmer weather) and lower condensing
power generation due to scarcity in the supply
of sustainable biomass. Gas and power sales
volumes decreased by 41 % and 32 %, respec-
tively, due to lower volumes from the Gazprom
Export sourcing contract and a gradual phase-
out of our remaining UK B2B activities.
Revenue increased by 65 % compared to Q2
2021 and amounted to DKK 9.2 billion. The
increase was driven by significant increases in
both gas and power prices, which led to higher
revenue in our gas and power sales businesses
despite the lower volumes. The unhedged part
of power generation at our CHP plants was
also positively impacted by the higher Danish
power prices.
EBITDA amounted to DKK 0.6 billion com-
pared to DKK 0.5 billion in Q2 2021.
EBITDA from CHP plants was DKK 0.3 billion
higher than in the same period last year, total-
ling DKK 0.6 billion in Q2 2022. The increase
was due to higher power prices in Denmark as
mentioned above. However, this was partly
offset by negative effect from price-ineffective
hedges during the quarter.
EBITDA from Gas Markets & Infrastructure de-
creased by DKK 0.2 billion relative to the same
period last year, amounting to DKK 0.1 billion
in Q2 2022. The decrease was mainly due to
lower earnings from our gas storage activities
compared to the same period last year.
Bioenergy & Other
Financial results Q2 2022 Q2 2021 % H1 2022 H1 2021 %
Business drivers
Degree days Number 448 487 (8 %) 1,589 1,812 (12 %)
Heat generation
GWh
823 1,148 (28 %) 4,066 5,038 (19 %)
Power generation
GWh
1,102 1,507 (27 %) 3,240 3,766 (14 %)
Gas sales
GWh
8,891 15,079 (41 %) 21,883 34,024 (36 %)
Power sales
GWh
1,466 2,167 (32 %) 3,156 4,493 (30 %)
Gas price, TTF
EUR/MWh
95.6 24.8 286 % 95.6 21.6 342 %
Power price, DK
EUR/MWh
179.8 58.8 206 % 165.4 53.9 207 %
Green dark spread, DK
EUR/MWh
(11.4) (8.3) 36 % (5.9) (6.3) (7 %)
Green spark spread, DK
EUR/MWh
(42.6) (9.4) 352 % (57) (5.6) 928 %
Financial performance
Revenue
DKKm
9,182 5,567 65 % 23,656 12,587 88 %
EBITDA
DKKm
647 503 29 % 3,161 1,125 181 %
CHP plants 619 351 76 % 2,442 1,027 138 %
Gas Markets & Infrastructure 66 232 (72 %) 791 251 215 %
Other, incl. project development
(38) (80) (53 %) (72) (153) (53 %)
Depreciation DKKm
(193) (194) (1 %) (382) (394) (3 %)
EBIT
DKKm
454 309 47 % 2,779 731 280 %
Cash flow from operating activities
DKKm
1,326 1,275 4 % 3,765 4,293 (12 %)
Gross investments
DKKm
(107) (30) 257 % (158) (89) 78 %
Divestments
DKKm
6 (174) n.a. (2) (203) (99 %)
Free cash flow
DKKm
1,225 1,071 14 % 3,605 4,001 (10 %)
Capital employed DKKm
(1,385) 1,727 n.a. (1,385) 1,727 n.a.
17/38
Management’s review
Interim financial report First half year 2022
Financials, DKKm
H1 2022 H1 2021 2021
Income statement
Revenue
60,057 32,497 77,673
EBITDA
13,044 13,059 24,296
Offshore
7,823 11,473 18,021
Sites, O&M and PPAs
5,727 7,254 13,059
Construction agreements and divestment gains
3,227 5,075 7,535
Other, incl. project development
(1,131) (856) (2,573)
Onshore
1,925
406
1,349
Bioenergy & Other
3,161 1,125 4,747
Other activities
135 55 179
Depreciation, amortisation and impairment
(4,432) (3,889) (8,101)
Operating profit (loss) (EBIT)
8,612 9,170 16,195
Gain (loss) on divestment of enterprises
175 (36) (742)
Net financial income and expenses
(1,334) (885) (2,166)
Profit (loss) before tax
7,454 8,245 13,277
Tax
(1,484) (1,103) (2,390)
Profit (loss) for the period
5,970 7,142 10,887
Balance
Assets 320,722 223,791 270,385
Equity
61,276 96,910 85,137
Shareholders in Ørsted A/S
40,091 75,842 64,072
Non-controlling interests
3,201 3,084 3,081
Hybrid capital
17,984 17,984 17,984
Interest-bearing net debt
41,449 12,067 24,280
Capital employed
102,725 108,977 109,416
Additions to property, plant, and equipment
13,851 15,423 43,941
Cash flow
Cash flow from operating activities
2,318 11,234 12,148
Gross investments
(13,204) (18,798) (39,307)
Divestments
2,194 10,560 21,519
Free cash flow
(8,692) 2,996 (5,640)
Financial ratios
Return on capital employed (ROCE)
1
, % 14.8 12.5 14.8
FFO/adjusted net debt
2
, % 17.6 62.9 31.3
Number of outstanding shares, end of period, '000
420,175 420,175 420,175
Share price, end of period, DKK
742 880 835
Market capitalisation, end of period, DKK billion
312 370 351
Earnings per share (EPS) (BP
1
), DKK 13.5 15.7 7.5
Dividend yield, %
- - 1.5
Q2 2022 Q2 2021
26,295 13,553
3,615 8,196
1,904 7,527
2,031 2,368
601 5,648
(728) (489)
1,075 178
647 503
(11) (12)
(2,304) (1,959)
1,311 6,237
67 (72)
(486) (466)
893 5,698
(624) (154)
269 5,544
320,722 223,791
61,276 96,910
40,091 75,842
3,201 3,084
17,984 17,984
41,449 12,067
102,725 108,977
8,724 8,954
2,355 3,147
(6,372) (12,133)
267 10,591
(3,750) 1,605
14.8 12.5
17.6 62.9
420,175 420,175
742 880
312 370
0.3 12.9
- -
Business drivers H1 2022 H1 2021 2021
Offshore
Decided (FID'ed) and installed capacity
3
, GW 11.1
9.8 10.9
Installed capacity, GW
7.6 7.6 7.6
Generation capacity, GW
4.8 4.0 4.0
Wind speed, m/s
9.9
9.2 9.1
Load factor, %
44 39 39
Availability, %
94 94 94
Power generation, GWh
7,826 7,070 13,808
Power sales, GWh
16,582 11,426 25,020
Onshore
Decided (FID'ed) and installed capacity, GW
4.9 4.7 4.7
Installed capacity, GW
4.0 2.5 3.4
Wind speed, US, m/s
7.7 7.5 7.4
Load factor, wind, US, %
49 45 42
Load factor, solar PV, %
26 29 24
Availability, wind, US, %
94 95 96
Availability, solar PV, %
99 90 96
Power generation, GWh
6,998 3,630 8,352
Bioenergy & Other
Degree days, number
1,589
1,812 2,820
Heat generation, GWh
4,066 5,038 7,907
Power generation, GWh
3,240 3,766 6,890
Power sales, GWh
3,156 4,493 8,797
Gas sales, GWh
21,883 34,024 61,349
People and environment
Employees (FTE), end of period number
Total recordable injury rate (TRIR), YTD
2.8 3.1 3.0
Fatalities, number
- - -
Green share of energy generation, %
92 89 90
GHG intensity (scope 1 & 2), g CO
2
e/kWh 49 56 58
GHG emissions (scope 3), Mtonnes
6.3 9.9 18.2
GHG emission (scope 1 & 2), Mtonnes
1.1 1.1 2.1
Q2 2022 Q2 2021
11.1 9.8
7.6 7.6
4.8 4.0
8.4 7.8
35 29
94 93
3,324 2,521
7,416 4,541
4.9 4.7
4.0 2.5
7.7 7.3
50 45
31 29
92 97
99 90
3,795 1,983
448 487
823 1,148
1,102 1,507
1,466 2,167
8,891 15,079
7,292 6,472
2.8 3.1
- -
93 93
0.4 0.4
49 51
2.6 4.6
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 Q1
2021 have been restated.
3)
Nameplate capacity from Q2 2021.
18/38
Management’s review
Interim financial report First half year 2022
Quarterly overview
Financials, DKKm
Q2
2022
Q1
2022
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Income statement (BP
1
comparables)
Revenue 26,295 33,762 30,666 14,510 13,553 18,944 15,559 10,041
EBITDA 3,615 9,429 8,253 2,984 8,196 4,863 5,003 3,360
Offshore 1,904 5,919 5,244 1,304 7,527 3,946 4,128 2,629
Sites, O&M and PPAs 2,031 3,698 3,983 1,822 2,368 4,886 4,950 3,012
Construction agreements and
divestment gains
601 2,620 2,469 (9) 5,648 (573) (149) 247
Other incl. project development (728) (399) (1,208) (509) (489) (367) (673) (630)
Onshore 1,075 850 530 413 178 228 324 308
Bioenergy & Other 647 2,514 2,416 1,206 503 622 643 375
Other activities (11) 146 63 61 (12) 67 (92) 48
Operating profit (loss) (EBIT) 1,311 7,301 5,980 1,045 6,237 2,933 3,091 1,265
Profit (loss) for the period 269 5,701 3,258 487 5,544 1,598 2,189 12,034
Income statement (IFRS comparables)
Revenue 26,295 33,762 30,666 14,510 13,553 18,944 13,195 8,762
EBITDA 3,615 9,429 8,253 2,984 8,196 4,863 3,102 2,455
Depreciation, amortisation and
impairment losses
(2,304) (2,128) (2,273) (1,939) (1,959) (1,930) (1,912) (2,095)
Operating profit (loss) (EBIT) 1,311 7,301 5,980 1,045 6,237 2,933 1,190 360
Gain (loss) on divestment of enterprises 67 108 (684) (22) (72) 36 (291) 11,139
Net financial income and expenses (486) (848) (930) (351) (466) (419) (456) (282)
Profit (loss) before tax 893 6,561 4,361 671 5,698 2,547 442 11,219
Tax (624) (860) (1,103) (184) (154) (949) 258 92
Profit (loss) for the period 269 5,701 3,258 487 5,544 1,598 715 11,329
Balance sheet
Assets 320,722 285,087 270,385 261,892 223,791 210,972 196,719 194,567
Equity 61,276 76,719 85,137 79,150 96,910 96,541 97,329 96,472
Shareholders in Ørsted A/S 40,091 55,704 64,072 58,129 75,842 75,835 81,376 80,450
Non-controlling interests 3,201 3,031 3,081 3,037 3,084 2,722 2,721 2,790
Hybrid capital 17,984 17,984 17,984 17,984 17,984 17,984 13,232 13,232
Interest-bearing net debt 41,449 30,026 24,280 21,211 12,067 13,190 12,343 8,216
Capital employed 102,725 106,745 109,416 100,361 108,977 109,731 109,672 104,688
Additions to property, plant, equipment 8,724 5,127 17,041 11,477 8,954 6,469 8,121 5,477
Cash flow
Cash flow from operating activities 2,355 (37) 668 246 3,147 8,087 6,756 1,941
Gross investments (6,372) (6,832) (11,752) (8,757) (12,133) (6,665) (8,639) (9,263)
Divestments 267 1,927 10,952 7 10,591 (31) (1,519) 20,506
Free cash flow (3,750) (4,942) (132) (8,504) 1,605 1,391 (3,402) 13,184
Financial ratios
Return on capital employed (ROCE)
2
, % 14.8 19.0 14.8 12.9 12.5 7.5 9.7 9.4
FFO/adjusted net debt
3
, % 17.6 25.0 31.3 42.3 62.9 59.4 65.0 35.6
Number of outstanding shares, end of period, '000 420,175 420,175 420,175 420,175 420,175 420,068 420,068 420,066
Share price, end of period, DKK
742 849 835 849 880 1,025 1,244 875
Market capitalisation, end of period, DKK billion 312 357 351 357 370 430 522 368
Earnings per share (EPS) (BP
1
), DKK 13.5 13.2 7.5 1.1 12.9 2.8 4.9 28.6
Business drivers
Q1
2022
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Offshore
Decided (FID'ed) and installed capacity
4
, GW 11.1 10.9 9.8 9.8 9.9 9.9 9.9
Installed capacity, GW
7.6 7.6 7.6 7.6 7.6 7.6 6.8
Generation capacity, GW
4.2 4.0 4.0 4.0 4.4 4.4 4.1
Wind speed, m/s
11.3 10.6 7.6 7.8 10.5 10.6 8.6
Load factor, %
54 53 27 29 50 53 35
Availability, %
95 95 93 93 95 94 94
Power generation, GWh
4,502 4,452 2,286 2,521 4,549 4,912 3,164
Power sales, GWh
9,166 8,791 4,803 4,541 6,885 8,561 6,282
Onshore
Decided (FID'ed) and installed capacity, GW
4.7 4.7 4.7 4.7 4.0 3.4 2.7
Installed capacity, GW
3.6 3.4 3.0 2.5 1.7 1.7 1.7
Wind speed, US, m/s
7.7 7.9 6.4 7.3 7.7 8.0 6.7
Load factor, wind, US, %
49 47 33 45 45 50 36
Availability, wind, US, %
96 96 98 97 93 95 97
Power generation, GWh
3,203 2,818 1,904 1,983 1,647 1,817 1,262
Bioenergy & Other
Degree days, number
1,141 927 81 487 1,325 825 106
Heat generation, GWh
3,243 2,467 402 1,148 3,890 2,230 321
Power generation, GWh
2,138 2,096 1,028 1,507 2,259 1,291 692
Power sales, GWh
1,690 2,072 2,271 2,167 2,287 2,574 2,452
Gas sales, GWh
12,993 13,744 13,580 15,079 18,945 20,441 23,158
People and environment
Employees (FTE) end of period, number
7,016 6,836 6,672 6,472 6,311 6,179 6,120
Total recordable injury rate (TRIR), YTD
1.3 3.0 3.0 3.1 3.0 3.6 3.8
Fatalities, number
- - - - - - -
Green share of energy generation, %
92 93 89 93 87 93 90
GHG intensity (scope 1 & 2), g CO
2
e/kWh
48 45 91 51 59 34 83
GHG emissions (scope 3), Mtonnes
3.7 3.9 4.4 4.6 5.3 5.9 6.3
Q2
2022
11.1
7.6
4.8
8.4
35
94
3,324
7,416
4.9
4.0
7.7
50
92
3,795
448
823
1,102
1,466
8,891
7,292
2.8
-
93
49
2.6
Load factor, solar PV, %
31 21 19 27 29 - - -
Availability, solar PV, %
99 99 99 98 90 - - -
GHG emissions (scope 1 & 2), Mtonnes
0.4 0.6 0.5 0.5 0.4 0.7 0.4 0.4
Income statement
The income statement (BP
1
comparables)
shows business performance numbers for
2020 to form a better like-for-like compari-
son, in line with the comparison numbers
used throughout the management’s review.
1)
Business performance.
2)
EBIT (last 12 months)/average capital employed.
3)
FFO last 12 months. Net debt including 50 % of hybrid capital and
cash and securities not available for use (with the exception of repo
transactions). Numbers for 2020 and 2021 have been restated.
4)
Nameplate capacity from Q2 2021.
19/38
Management’s review
Interim financial report First half year 2022
Consolidated
financial statements
First half 2022
1 January – 30 June
20/38
Consolidated financial statements
Interim financial report First half year 2022
1 January – 30 June
1 January – 30 June
Value adjustments for the period in the first half year
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 currency, gas, and inflation
hedges.
Consolidated statements of income
Note Income statement, DKKm H1 2022 H1 2021
3 Revenue 60,057 32,497
Cost of sales (43,836 ) (21,754 )
Other external expenses (2,848 ) (2,106 )
Employee costs (2,434 ) (2,215 )
Share of profit (loss) in associates and joint ventures 56 59
4 Other operating income 3,433 6,730
4 Other operating expenses (1,384 ) (152 )
Operating profit (loss) before depreciation,
amortisation, and impairment losses (EBITDA) 13,044 13,059
Amortisation, depreciation, and impairment losses on
intangible assets, and property, plant, and equipment (4,432 ) (3,889 )
Operating profit (loss) (EBIT)
Gain (loss) on divestment of enterprises 175 (36 )
Share of profit (loss) in associates and joint ventures 1 (4 )
5 Financial income 3,091 1,970
5 Financial expenses (4,425 ) (2,855 )
Profit (loss) before tax
8 Tax on profit (loss) for the period (1,484 ) (1,103 )
Profit (loss) for the period
Profit (loss) for the period is attributable to:
Shareholders in Ørsted A/S 5,688 6,584
Interests and costs, hybrid capital owners of Ørsted A/S 293 575
Non-controlling interests (11 ) (17 )
Profit (loss) per share
1
, DKK 13.5 15.7
1
Diluted profit (loss) per share corresponds to profit (loss) per share, as the dilutive effect of the share incentive
programme is less than 0.1 % of the share capital.
Statement of comprehensive income, DKKm H1 2022 H1 2021
Profit (loss) for the period 5,970 7,142
Other comprehensive income:
Cash flow hedging:
Value adjustments for the period (38,560 ) (12,759 )
Value adjustments transferred to income statement 7,606 2,383
Value adjustments transferred to balance sheet (69 ) (48 )
Exchange rate adjustments:
Exchange rate adjustments relating to net investments in foreign enterprises 825 3,357
Value adjustment of net investment hedges (716 ) (1,977 )
Tax:
Tax on hedging instruments 6,046 1,846
Tax on exchange rate adjustments 398 (84 )
Other:
Share of other comprehensive income of associated companies, after tax 37 9
Other comprehensive income (24,433 ) (7,273 )
Total comprehensive income (18,463 ) (131 )
Comprehensive income for the period is attributable to:
Shareholders in Ørsted A/S (18,743 ) (800 )
Interest payments and costs, hybrid capital owners of Ørsted A/S 293 575
Non-controlling interests (13 ) 94
Total comprehensive income (18,463 ) (131 )
21/38
Consolidated financial statements
Interim financial report First half year 2022
1 April – 30 June
1 April – 30 June
Consolidated statements of income (continued)
Note Income statement, DKKm Q2 2022 Q2 2021
3 Revenue 26,295 13,553
Cost of sales (19,289 ) (8,843 )
Other external expenses (1,673 ) (1,175 )
Employee costs (1,268 ) (1,176 )
Share of profit (loss) in associates and joint ventures 1 21
4 Other operating income 857 5,907
4 Other operating expenses (1,308 ) (91 )
Operating profit (loss) before depreciation,
amortisation, and impairment losses (EBITDA) 3,615 8,196
Amortisation, depreciation, and impairment losses on
intangible assets, and property, plant, and equipment (2,304 ) (1,959 )
Operating profit (loss) (EBIT) 1,311 6,237
Gain (loss) on divestment of enterprises 67 (72 )
Share of profit (loss) in associates and joint ventures 1 (1 )
5 Financial income 2,028 1,485
5 Financial expenses (2,514 ) (1,951 )
Profit (loss) before tax 893 5,698
8 Tax on profit (loss) for the period (624 ) (154 )
Profit (loss) for the period 269 5,544
Profit (loss) for the period is attributable to:
Shareholders in Ørsted A/S 132 5,410
Interests and costs, hybrid capital owners of Ørsted A/S 148 160
Non-controlling interests (11 ) (26 )
Profit (loss) per share, DKK 0.3 12.9
Statement of comprehensive income, DKKm Q2 2022 Q2 2021
Profit (loss) for the period 269 5,544
Other comprehensive income:
Cash flow hedging:
Value adjustments for the period (15,599 ) (6,903 )
Value adjustments transferred to income statement 1,914 365
Value adjustments transferred to balance sheet (37 ) (4 )
Exchange rate adjustments:
Exchange rate adjustments relating to net investment in foreign enterprises 877 (417 )
Value adjustment of net investment hedges (675 ) 159
Tax:
Tax on hedging instruments 2,704 1,222
Tax on exchange rate adjustments 286 61
Other:
Share of other comprehensive income of associated companies, after tax 28 -
Other comprehensive income (10,502 ) (5,517 )
Total comprehensive income (10,233 ) 27
Comprehensive income for the period is attributable to:
Shareholders in Ørsted A/S (10,370 ) (83 )
Interest payments and costs after tax, hybrid capital owners of Ørsted A/S 148 160
Non-controlling interests (11 ) (50 )
Total comprehensive income (10,233 ) 27
22/38
Consolidated financial statements
Interim financial report First half year 2022
Assets and liabilities classified as held for sale
At 30 June 2022 and at 30 June 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 Assets, DKKm
30 June
2022
31 December
2021
30 June
2021
Intangible assets 1,406 1,543 1,037
Land and buildings 8,043 8,066 6,095
Production assets 115,694 95,618 86,533
Fixtures and fittings, tools, and equipment 1,604 604 529
Property, plant, and equipment under construction 48,957 57,108 44,265
Property, plant, and equipment 174,298 161,396 137,422
Investments in associates and joint ventures 755 572 668
Other securities and equity investments 233 221 222
10 Derivatives 10,188 2,716 2,997
Deferred tax 20,874 13,281 6,437
Other receivables 2,876 2,492 2,416
Other non-current assets 34,926 19,282 12,740
Non-current assets 210,630 182,221 151,199
Inventories 18,724 15,998 10,091
10 Derivatives 42,011 14,078 8,797
Contract assets 2,051 2 2
Trade receivables 8,630 9,565 6,073
Other receivables 9,954 14,815 5,073
Income tax 617 1,200 3,104
10 Securities 19,508 21,228 30,401
Cash 7,362 9,943 7,724
Current assets 108,857 86,829 71,265
Assets classified as held for sale 1,235 1,335 1,327
Assets 320,722 270,385 223,791
Note Equity and liabilities, DKKm
30 June
2022
31 December
2021
30 June
2021
Share capital 4,204 4,204 4,204
7 Reserves (49,246 ) (24,778 ) (9,349 )
Retained earnings 85,133 79,391 80,987
Proposed dividends - 5,255 -
Equity attributable to shareholders in Ørsted A/S 40,091 64,072 75,842
Hybrid capital 17,984 17,984 17,984
Non-controlling interests 3,201 3,081 3,084
Equity 61,276 85,137 96,910
Deferred tax 7,149 5,616 3,581
Provisions 14,500 15,124 14,002
Lease liabilities 7,787 6,812 4,885
11 Bond and bank debt 46,467 31,502 34,565
10 Derivatives 33,414 17,464 7,948
Contract liabilities 3,159 3,230 3,317
Tax equity liabilities 14,533 13,358 7,876
Other payables 4,625 4,682 763
Non-current liabilities 131,634 97,788 76,937
Provisions 722 764 577
Lease liabilities 768 720 653
11 Bond and bank debt 11,992 19,493 9,884
10 Derivatives 77,302 32,325 15,312
Contract liabilities 1,258 2,440 386
Trade payables 20,412 20,231 10,943
Tax equity liabilities 1,691 1,206 1,298
Other payables 7,653 4,768 4,694
Income tax 5,504 5,021 5,509
Current liabilities 127,302 86,968 49,256
Liabilities 258,936 184,756 126,193
Liabilities relating to assets classified
as held for sale 510 492 688
Equity and liabilities 320,722 270,385 223,791
23/38
Consolidated financial statements
Interim financial report First half year 2022
* See note 7 ‘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
currency, 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 - - 5,688 - 5,688 293 (11 ) 5,970 - - 6,584 - 6,584 575 (17 ) 7,142
Other comprehensive income:
Cash flow hedging - (31,023 ) - - (31,023 ) - - (31,023 ) - (10,424 ) - - (10,424 ) - - (10,424 )
Exchange rate adjustments - 111 - - 111 - (2 ) 109 - 1,269 - - 1,269 - 111 1,380
Tax on other comprehensive income - 6,444 - - 6,444 - - 6,444 - 1,762 - - 1,762 - - 1,762
Share of other comprehensive income
of associated companies, after tax - - 37 - 37 - - 37 - - 9 - 9 - - 9
Total comprehensive income - (24,468 ) 5,725 - (18,743 ) 293 (13 ) (18,463 ) - (7,393 ) 6,593 - (800 ) 575 94 (131 )
Coupon payments, hybrid capital - - - - - (314 ) - (314 ) - - - - - (268 ) - (268 )
Tax, hybrid capital - - - - - 21 - 21 - - - - - 89 - 89
Additions, hybrid capital - - - - - - - - - - - - - 7,327 - 7,327
Disposals, hybrid capital - - - - - - - - - - - - - (2,971 ) - (2,971 )
Dividends paid - - 3 (5,255 ) (5,252 ) - (150 ) (5,402 ) - - 4 (4,834 ) (4,830 ) - (183 ) (5,013 )
Additions, non-controlling interests - - - - - - 283 283 - - 83 - 83 - 450 533
Other changes - - 14 - 14 - - 14 - - 13 - 13 - 2 15
Equity at 30 June 4,204 (49,246 ) 85,133 - 40,091 17,984 3,201 61,276 4,204 (9,349 ) 80,987 - 75,842 17,984 3,084 96,910
24/38
Consolidated financial statements
Interim financial report First half year 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 June 2022 includes ’Cash, not available
for use’ amounting to DKK 2,269 million and ’Bank
overdrafts that are part of the ongoing cash
management’ amounting to DKK 117 million.
Consolidated statement of cash flows
Note Statement of cash flows, DKKm H1 2022 H1 2021 Q2 2022 Q2 2021
Proceeds from raising of loans 20,363 6,865
Instalments on loans (13,896 ) (1,329 ) (8,001 ) (1,713 )
Instalments on leases (296 ) (184 )
(123 ) (111 )
Coupon payments on hybrid capital (314 ) (268 )
(164 ) (162 )
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 ) (5,252 ) -
Transactions with non-controlling
interests 115 330 158 471
Net proceeds from tax equity partners (137 ) 25 (86 ) (95 )
Collateral posted in relation to trading
of derivatives (21,227 ) (9,123 ) (10,087 ) (4,264 )
Collateral released in relation to trading
of derivatives 25,424 6,946 13,765 3,856
Cash flows from financing activities 4,780 2,788 4,014 (2,970 )
Total net change in cash and cash
equivalents for the period (3,724 ) 2,159 357 67
Cash and cash equivalents at the
beginning of the period 8,614 5,210 4,548 7,478
Total net change in cash and cash
equivalents (3,724 ) 2,159 357 67
Exchange rate adjustments of cash
and cash equivalents 86 182 71 6
Cash and cash equivalents at 30 June 4,976 7,551 4,976 7,551
Note Statement of cash flows, DKKm H1 2022 H1 2021 Q2 2022 Q2 2021
Operating profit (loss) before
depreciation, amortisation, and
impairment losses (EBITDA) 13,044 13,059 3,615 8,196
Reversal of gain (loss) on divestment
of assets (1,884 ) (5,678 ) (21 ) (5,458 )
Change in derivatives
(5,215 ) (475 ) (1,251 ) 336
Change in provisions
(955 ) 645 (190 ) 15
Other items
(154 ) (46 ) (89 ) 15
Change in inventories (2,979 ) 5,143 (2,481 ) 1,427
Change in contract assets and liabilities (3,292 ) (450 ) (2,316 ) (182 )
Change in trade receivables 933 1,068 208 114
Change in other receivables 3,284 (773 ) 5,645 (446 )
Change in trade payables 539 (162 ) (554 ) (925 )
Change in tax equity liabilities (21 ) 619 475 866
Change in other payables (209 ) 106 (361 ) (116 )
Interest received and similar items 2,943 933
Interest paid and similar items (3,197 ) (1,569 ) (1,730 ) (992 )
Income tax paid (519 ) (1,186 )
(288 ) (313 )
Cash flows from operating activities 2,318 11,234 2,355 3,147
Purchase of intangible assets, and
property, plant, and equipment (13,110 ) (14,129 ) (6,309 ) (7,481 )
Sale of intangible assets, and property,
plant, and equipment 1,887 10,177 25 10,202
Acquisition of enterprises
(26 ) (2,359 ) (26 ) (2,348 )
Divestment of enterprises
Purchase of other equity investments
Purchase of securities
(1,019 ) (7,065 ) (206 ) (1,025 )
Sale/maturation of securities
Change in other non-current assets
(18 ) 25 (16 ) 2
Transactions with associates and
joint ventures (54 ) (26 ) (24 ) (26 )
Dividends received and capital reduction
Cash flows from investing activities (10,822 ) (11,863 ) (6,012 ) (110 )
25/38
Consolidated financial statements
Interim financial report First half year 2022
The interim financial report for the first half
year 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.
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.
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 half year of
2022 comprises the interim financial state-
ments 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.
1. Basis of reporting
Muscle Shoals
Solar PV project in
Colbert County,
Alabama, the US.
26/38
Consolidated financial statements
Interim financial report First half year 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 3,607 million, which primarily relates to our
Shared Functions services as well as our B2B
business activities.
2. Segment information
2022
Income statement, DKKm Offshore Onshore
Bioenergy
& Other
Reportable
segments
Other
activities/
eliminations Total
External revenue 33,335 1,420 25,288 60,043 14 60,057
Intra-group revenue 3,807 - (1,632) 2,175 (2,175)
1
-
Revenue 37,142 1,420 23,656 62,218 (2,161) 60,057
Cost of sales (26,544) (21) (19,421) (45,986) 2,150 (43,836)
Employee costs and other external expenses (3,560) (767) (1,103) (5,430) 148 (5,282)
Gain (loss) on disposal of non-current assets 1,836 43 5 1,884 - 1,884
Additional other operating income and expenses (1,104) 1,249 22 167 (2) 165
Share of profit (loss) in associates and joint ventures 53 1 2 56 - 56
EBITDA 7,823 1,925 3,161 12,909 135 13,044
Depreciation and amortisation
(3,192) (740) (382)
(4,314)
(118)
(4,432)
Operating profit (loss) (EBIT) 4,631 1,185 2,779 8,595 17 8,612
Key ratios
Intangible assets, and property, plant, and equipment 116,493 49,964 7,903 174,360 1,344 175,704
Assets classified as held for sale, net - - 741 741 - 741
Equity investments and non-current receivables 642 45 129 816 208 1,024
Net working capital, capital expenditures (7,975) (521) (32) (8,528) - (8,528)
Net working capital, work in progress 8,070 - - 8,070 - 8,070
Net working capital, tax equity - (14,787) - (14,787) - (14,787)
Net working capital, other items 7,932 62 1,243 9,237 1,034 10,271
Derivatives, net (43,155) (7,236) (9,636) (60,027) 1,510 (58,517)
Decommissioning obligations (6,314) (1,577) (1,415) (9,306) - (9,306)
Other provisions (2,388) (11) (1,310) (3,709) (2,207) (5,916)
Tax, net 11,445 (4,258) 989 8,176 662 8,838
Other receivables and other payables, net (4,265) (10) 3 (4,272) (597) (4,869)
Capital employed at 30 June 80,485 21,671 (1,385) 100,771 1,954 102,725
Return on capital employed (ROCE), % - - - - - 14.8
Cash flow from operating activities (2,160) 1,106 3,765 2,711 (393) 2,318
Gross investments (10,805) (2,218) (158) (13,181) (23) (13,204)
Divestments 2,121 44 (2) 2,163 31 2,194
Free cash flow (FCF) (10,844) (1,068) 3,605 (8,307) (385) (8,692)
27/38
Consolidated financial statements
Interim financial report First half year 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 3,824 million, which primarily relates to our
Shared Functions services as well as our B2B
business activities.
2021
Income statement, DKKm Offshore Onshore
Bioenergy
& Other
Reportable
segments
Other
activities/
eliminations Total
External revenue 19,284 227 12,992 32,503 (6) 32,497
Intra-group revenue 2,941 - (405) 2,536 (2,536)
1
-
Revenue 22,225 227 12,587 35,039 (2,542) 32,497
Cost of sales (13,801) (9) (10,438) (24,248) 2,494 (21,754)
Employee costs and other external expenses (2,978) (422) (1,026) (4,426) 105 (4,321)
Gain (loss) on disposal of non-current assets 5,678 - - 5,678 - 5,678
Additional other operating income and expenses 291 610 1 902 (2) 900
Share of profit (loss) in associates and joint ventures 58 - 1 59 - 59
EBITDA 11,473 406 1,125 13,004 55 13,059
Depreciation and amortisation
(3,049) (329) (394)
(3,772)
(117)
(3,889)
Operating profit (loss) (EBIT) 8,424 77 731 9,232 (62) 9,170
Key ratios
Intangible assets, and property, plant, and equipment 94,777 34,380 7,901 137,058 1,401 138,459
Assets classified as held for sale, net - - 654 654 - 654
Equity investments and non-current receivables 543 35 157 735 167 902
Net working capital, capital expenditures (3,764) (1,203) (24) (4,991) - (4,991)
Net working capital, work in progress 6,463 - - 6,463 - 6,463
Net working capital, tax equity - (8,338) - (8,338) - (8,338)
Net working capital, other items 3,161 367 (2,008) 1,520 179 1,699
Derivatives, net (6,594) (3,223) (2,790) (12,607) 1,141 (11,466)
Decommissioning obligations (5,482) (1,003) (1,283) (7,768) - (7,768)
Other provisions (3,928) (105) (1,946) (5,979) (832) (6,811)
Tax, net 2,347 (2,902) 1,064 509 (58) 451
Other receivables and other payables, net 339 (40) 2 301 (578) (277)
Capital employed at 30 June 87,862 17,968 1,727 107,557 1,420 108,977
Return on capital employed (ROCE), % - - - - - 12.5
Cash flow from operating activities 6,507 411 4,293 11,211 23 11,234
Gross investments (10,360) (8,280) (89) (18,729) (69) (18,798)
Divestments 10,669 - (203) 10,466 94 10,560
Free cash flow (FCF) 6,816 (7,869) 4,001 2,948 48 2,996
28/38
Consolidated financial statements
Interim financial report First half year 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 1,639 million (Q2 2021: DKK 1.892 million), which
primarily relates to our Shared Functions services as
well as our B2B business activities.
Q2 2022, income statement and FCF, DKKm Offshore Onshore
Bioenergy
& Other
Reporting
segments
Other
activities/
eliminations Total
External revenue 15,990 730 9,570 26,290 5 26,295
Intra-group revenue 1,346 - (388) 958 (958)
1
-
Revenue 17,336 730 9,182 27,248 (953) 26,295
Cost of sales (12,252) (11) (7,970) (20,233) 944 (19,289)
Employee costs and other external expenses (1,997) (367) (577) (2,941) - (2,941)
Gain (loss) on disposal of non-current assets (27) 43 5 21 - 21
Additional other operating income and expenses (1,155) 680 5 (470) (2) (472)
Share of profit (loss) in associates and joint ventures (1) - 2 1 - 1
EBITDA 1,904 1,075 647 3,626 (11) 3,615
Depreciation and amortisation (1,671) (382) (193) (2,246) (58) (2,304)
Operating profit (loss) (EBIT) 233 693 454 1,380 (69) 1,311
Cash flow from operating activities 46 1,294 1,326 2,666 (311) 2,355
Gross investments (5,257) (997) (107) (6,361) (11) (6,372)
Divestments 176 44 6 226 41 267
Free cash flow (FCF) (5,035) 341 1,225 (3,469) (281) (3,750)
Q2 2021, income statement and FCF, DKKm
External revenue 7,565 93 5,709 13,367 186 13,553
Intra-group revenue 1,375 14 (142) 1,247 (1,247)
1
-
Revenue 8,940 107 5,567 14,614 (1,061) 13,553
Cost of sales (5,306) (4) (4,556) (9,866) 1,023 (8,843)
Employee costs and other external expenses (1,618) (249) (512) (2,379) 28 (2,351)
Gain (loss) on disposal of non-current assets 5,458 - - 5,458 - 5,458
Additional other operating income and expenses 33 324 3 360 (2) 358
Share of profit (loss) in associates and joint ventures 20 - 1 21 - 21
EBITDA 7,527 178 503 8,208 (12) 8,196
Depreciation and amortisation (1,502) (201) (194) (1,897) (62) (1,959)
Operating profit (loss) (EBIT) 6,025 (23) 309 6,311 (74) 6,237
Cash flow from operating activities 1,301 857 1,275 3,433 (286) 3,147
Gross investments (5,793) (6,275) (30) (12,098) (35) (12,133)
Divestments 10,702 (1) (174) 10,527 64 10,591
Free cash flow (FCF) 6,210 (5,419) 1,071 1,862 (257) 1,605
29/38
Consolidated financial statements
Interim financial report First half year 2022
Revenue was DKK 60,057 million. The
increase of 85 % relative to the first half year
of 2021 was primarily due to the significantly
higher gas and power prices across all
markets and more assets in operation.
Revenue from construction agreements was
4,095 million. The decrease of 20 % relative to
the first half year of 2021 was mainly due to
the divestment of the offshore transmission
asset at Hornsea 1 in March 2021. In H1 2022,
revenue mainly related to the construction of
Greater Changhua 1 for partners.
Income from government grants decreased
relatively to the first half year 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
H1 2022
total Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
H1 2021
total
Sale of gas - - 12,337 - 12,337 - - 5,424 4 5,428
Generation of power 4,959 1,046 5,304 - 11,309 3,376 349 2,306 - 6,031
Sale of power 23,232 - 3,225 (2,201) 24,256 7,540 - 2,521 (2,398) 7,663
Revenue from construction of offshore wind farms and
transmission assets 4,095 - - - 4,095 5,135 - - - 5,135
Generation and sale of heat and steam - - 1,710 - 1,710 - - 1,609 - 1,609
Distribution and transmission - - 121 (2) 119 - - 157 (1) 156
Other revenue 1,141 19 160 (13) 1,307 1,193 - 111 (23) 1,281
Total revenue from customers 33,427 1,065 22,857 (2,216) 55,133 17,244 349 12,128 (2,418) 27,303
Government grants 2,529 329 301 - 3,159 4,661 5 393 - 5,059
Miscellaneous revenue 1,186 26 498 55 1,765 320 (127) 66 (124) 135
Total revenue 37,142 1,420 23,656 (2,161) 60,057 22,225 227 12,587 (2,542) 32,497
Timing of revenue recognition from customers
At a point in time 24,955 1,065 13,694 (2,216) 37,498 13,123 349 4,160 (2,418) 15,214
Over time 8,472 - 9,163 - 17,635 4,121 - 7,968 - 12,089
Total revenue from customers 33,427 1,065 22,857 (2,216) 55,133 17,244 349 12,128 (2,418) 27,303
30/38
Consolidated financial statements
Interim financial report First half year 2022
3. Revenue (continued)
Revenue, DKKm Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
Q2 2022
total Offshore Onshore
Bioenergy &
Other
Other
activities/
eliminations
Q2 2021
total
Sale of gas - - 5,004 (31) 4,973 - - 2,456 97 2,553
Generation of power 2,909 493 2,348 - 5,750 1,207 104 1,172 -
2,483
Sale of power 10,282 - 1,478 (966) 10,794
5,186 - 1,104 (1,049) 5,241
Revenue from construction of offshore wind farms and
transmission assets 2,356 - - - 2,356 34 - - - 34
Generation and sale of heat and steam - - 504 - 504
- - 416 - 416
Distribution and transmission - - 54 - 54
- - 76 - 76
Other revenue 420 7 85 (11) 501 623 - 74 (16) 681
Total revenue from customers 15,967 500 9,473 (1,008) 24,932 7,050 104 5,298 (968) 11,484
Government grants 1,210 168 98 - 1,476 1,663 3 166 - 1,832
Miscellaneous revenue 159 62 (389) 55 (113) 227 - 103 (93) 237
Total revenue 17,336 730 9,182 (953) 26,295 8,940 107 5,567 (1,061) 13,553
Timing of revenue recognition from customers
At a point in time 10,138 500 6,010 (1,008) 15,640 3,334 104 2,093 (968) 4,563
Over time 5,829 - 3,463 - 9,292 3,716 - 3,205 - 6,921
Total revenue from customers 15,967 500 9,473 (1,008) 24,932 7,050 104 5,298 (968) 11,484
31/38
Consolidated financial statements
Interim financial report First half year 2022
4. Other operating
income and expenses
‘Gain on divestment of assets’ in H1 2022
primarily related to the 50 % farm-down of
Borkum Riffgrund 3 in February, resulting in a
gain from new partnerships of DKK 1.6 billion.
In H1 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 commissioning of
new onshore wind farms in 2021, which have
had full impact in 2022, and commissioning of
new onshore wind and solar farms in H1 2022.
‘Miscellaneous operating expenses’ in H1 2022
included ineffective hedges as a consequence
of lower than expected offshore generation,
resulting in having hedged too large volumes
for future periods.
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 issued bond as a
consequence of increased inflation rates, and lower
capitalised interest.
‘Value adjustments of derivatives, net’ and ‘Value
adjustments of securities, net’ are both impacted by
the increase in interest rates in the first half year of
2022.
Other operating income, DKKm H1 2022 H1 2021 Q2 2022 Q2 2021
Gain on divestment of assets 1,940 5,754 48 5,499
Other compensation 97 229 47 66
US tax credits and tax attributes 1,247 595 679 312
Miscellaneous operating income 149 152 83 30
Total other operating income 3,433 6,730 857 5,907
Other operating expenses, DKKm H1 2022 H1 2021 Q2 2022 Q2 2021
Loss on divestment of assets 56 76 27 41
Miscellaneous operating expenses 1,328 76 1,281 50
Total other operating expenses 1,384 152 1,308 91
Net financial income and expenses, DKKm H1 2022 H1 2021 Q2 2022 Q2 2021
Interest expenses, net (682) (409) (478) (139)
Interest expenses, leasing (115) (101) (70) (51)
Interest element of provisions, etc. (239) (201) (136) (101)
Tax equity partner's contractual return (563) (309) (326) (161)
Value adjustments of derivatives, net 1,116 117 720 26
Exchange rate adjustments, net 379 290 401 59
Value adjustments of securities, net (1,249) (378) (621) (115)
Other financial income and expenses 19 106 24 16
Net financial income and expenses (1,334) (885) (486) (466)
32/38
Consolidated financial statements
Interim financial report First half year 2022
7. Reserves
6. Gross and net
investments
Offshore wind
technician on a
crew transfer
vessel in the North
Sea.
’Value adjustments of hedging reserve’ in the first
half year 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 currency, gas, and
inflation hedges.
Reserves 2021, DKKm
Foreign
currency
translation
reserve
Hedging
reserve
Total
reserves
Reserves at 1 January (3,829) 1,873 (1,956)
Exchange rate adjustments 3,246 - 3,246
Value adjustments of hedging reserve - (14,736) (14,736)
Value adjustments transferred to:
Revenue - 2,364 2,364
Financial income and expenses - 19 19
Profit (loss) from discontinued operations - (48) (48)
Tax:
Tax on hedging and currency adjustments (519) 2,281 1,762
Movement in comprehensive income for the period 2,727 (10,120) (7,393)
Total reserves at 30 June (1,102) (8,247) (9,349)
Gross and net investments, DKKm H1 2022 H1 2021 Q2 2022 Q2 2021
Cash flow from investing activities (10,822) (11,863) (6,012) (110)
Dividends received and capital reductions rever-
sed
(22) (28) (22) (28)
Purchase and sale of securities, reversed (448) 5,419 (269) 362
Sale of non-current assets, reversed (1,912) (10,057) (69) (10,088)
Interest-bearing debt in acquired enterprises - (2,273) - (2,273)
Restricted cash in acquired enterprises - 4 - 4
Gross investments (13,204) (18,798) (6,372) (12,133)
Transactions with non-controlling interests
in connection with divestments 282 503 198 503
Sale of non-current assets 1,912 10,057 69 10,088
Divestments 2,194 10,560 267 10,591
Net investments (11,010) (8,238) (6,105) (1,542)
Reserves 2022, DKKm
Foreign
currency
translation
reserve
Hedging
reserve
Total
reserves
Reserves at 1 January 1,475 (26,253) (24,778)
Exchange rate adjustments 827 - 827
Value adjustments of hedging reserve - (39,276) (39,276)
Value adjustments transferred to:
Revenue - 8,063 8,063
Financial income and expenses - (457) (457)
Property, plant, and equipment - (69) (69)
Tax:
Tax on hedging and currency adjustments 240 6,204 6,444
Movement in comprehensive income for the period 1,067 (25,535) (24,468)
Total reserves at 30 June 2,542 (51,788) (49,246)
33/38
Consolidated financial statements
Interim financial report First half year 2022
Tax on profit (loss) for the period
Tax on profit (loss) was DKK 1,484 million in
the first half of 2022 compared to DKK 1,103
million in the first half of 2021. The effective
tax rate for the first half year of 2022 was
20 %.
The effective tax rate was affected by the
farm-down of Borkum Riffgrund 3, recognition
of 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 half year 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
current year’s profit (loss).
8. Tax on profit (loss) for the period
Offshore wind
technicians on the
service operation
vessel ’Wind of
Change’ in the
North Sea.
H1 2022 H1 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 (587) n.a. (1,096) n.a.
Gain (loss) on divestment of enterprises 1,463 - n.a. 5,355 - n.a.
Other adjustments 304 n.a. 517 n.a.
Remaining Ørsted business 5,991 (1,201) 20 % 2,890 (524) 18 %
Effective tax for the period 7,454 (1,484) 20 % 8,245 (1,103) 13 %
34/38
Consolidated financial statements
Interim financial report First half year 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 have increased
significantly in H1 2022 due to the
increase in power prices.
Our energy exposures have been
reduced significantly due to hedging.
Energy exposure 1 July 2022 - 30 June 2027, DKKbnCurrency exposure July 2022 - 30 June 2027, DKKbn
9. Market risks
The table shows the time of the
transfer of the market value of
hedging contracts to EBITDA.
Due to the increase in power prices,
we have seen large losses on power
hedges. 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 prices
foreign exchange rates
interest and inflation.
We manage market risks to protect Ørsted
against market price volatility and to ensure
stable and robust financial ratios that support
our growth strategy and protect the value of
our assets.
Minimum hedging levels are determined by the
Board of Directors. In the first two years, we
are almost fully hedged. The degree of
hedging declines in subsequent years. For more
details on our market risks, please see notes
6.1-6.4 in the annual report for 2021.
35/38
Consolidated financial statements
Interim financial report First half year 2022
Market values are determined by the
Risk Management function, which reports to
the CFO. The development in market values is
monitored on a continuing basis and reported
to the Executive Committee.
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.
10. 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 avai-
lable 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 level 3, together with a
sensitivity analysis as at
30 June 2022.
If intermittency-adjusted
power prices in Germany as
of 30 June 2022 increased
by 25 %, the market value
would decrease by
DKK 2,520 million.
Assets Liabilities
Fair value hierarchy
DKKm Inventories Securities Derivatives Derivatives
2022
Quoted prices 4,816 - 19,537 24,802
Observable input - 19,508 32,212 65,481
Non-observable input - - 450 20,433
Total 30 June 2022 4,816 19,508 52,199 110,716
2021
Quoted prices 340 - 4,016 5,268
Observable input - 30,401 7,587 16,551
Non-observable input - - 191 1,441
Total 30 June 2021 340 30,401 11,794 23,260
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 (956) (326)
Value adjustments through other
comprehensive income (7,922) (623)
Sales/redemptions 700 18
Purchases/issues (1,910) (229)
Transferred from quoted prices and
observable input (2,483) -
Transferred to observable input 36 (8)
Market value at 30 June before
deferred gain (loss) (19,983) (1,250)
Non-observable input per commodity
price input, DKKm 2022 2021
US power prices (6,910) -
German power prices (6,565) (820)
Other power prices (6,285) (341)
Gas prices (223) (89)
Total (19,983) (1,250)
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) 905 444 1,379 (2,520) 2,520
Ireland (2023-2042) 938 663 2,483 (420) 420
US ERCOT (2022-2030) 242 155 1,231 (2,808) 2,867
US SPP (2022-2030) 236 147 670 (1,146) 1,158
US MISO (2022-2033) 280 92 640 (514) 530
36/38
Consolidated financial statements
Interim financial report First half year 2022
Market value of bond and bank debt
At 30 June 2022, the market values of bond
and bank debts were DKK 44.7 billion and
DKK 13.9 billion, respectively.
Interest-bearing net debt totalled DKK 41,449
million at 30 June 2022, which was an increase of
DKK 17,169 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 9,733 million.
The table shows which
items are
included in the
adjusted interest-
bearing debt.
11. Interest-bearing debt and FFO
We aim to have a
long-term FFO/
adjusted NIBD at
above 25 %, in line with
the rating agencies.
Adjusted for collateral
postings (margin
payments), FFO/
adjusted NIBD would
have been 46 % (all
other things equal).
Adjusted interest-bearing net debt
DKKm
30 June
2022
31 December
2021
30 June
2021
Total interest-bearing net debt 41,449 24,280 12,067
50 % of hybrid capital 8,992 8,992 8,992
Cash and securities not available
for distribution, excluding repo loans 3,054 2,130 977
Total adjusted interest-bearing
net debt 53,495 35,402 22,036
Funds from operations (FFO)/
adjusted interest-bearing net debt
30 June
2022
31 December
2021
30 June
2021
Funds from operations (FFO)/
adjusted interest-bearing net debt 17.6 % 31.3 % 62.9 %
Interest-bearing debt and interest-bearing assets
DKKm
30 June
2022
31 December
2021
30 June
2021
Interest-bearing debt:
Bank debt 14,049 16,318 8,554
Bond debt 44,410 34,677 35,895
Total bond and bank debt 58,459 50,995 44,449
Tax equity liability 1,437 1,296 836
Lease liability 8,555 7,532 5,538
Other interest-bearing debt 3,458 535 940
Total interest-bearing debt 71,909 60,358 51,763
Interest-bearing assets:
Securities 19,508 21,228 30,401
Cash 7,362 9,943 7,724
Other receivables 2,833 4,150 829
Receivables in connection with divestments 757 757 742
Total interest-bearing assets 30,460 36,078 39,696
Total net interest-bearing debt 41,449 24,280 12,067
Funds from operations (FFO) LTM
1
DKKm
30 June
2022
31 December
2021
30 June
2021
EBITDA 24,282 24,296 21,423
Change in provisions and other
adjustments (2,128) (422) (1,370)
Change in derivatives (6,791) (2,050) 1,976
Reversal of gain (loss) on divestment
of assets (4,127) (7,920) (5,196)
Income tax paid (712) (1,380) (952)
Interest and similar items,
received/paid (87) (467) (1,301)
Reversal of interest expenses
transferred to assets (810) (782) (545)
50 % of coupon payments on
hybrid capital (237) (215) (215)
Dividends received and
capital reductions 23 29 46
Funds from operations (FFO) 9,413 11,089 13,866
1
Last 12 months.
37/38
Consolidated financial statements
Interim financial report First half year 2022
12. Subsequent events
Acquisition of Ostwind
We signed an agreement to acquire the
German and French onshore wind platform
Ostwind. The agreement is based on an
enterprise valutation of Ostwind of EUR 689
million. The final price will be subject to
customary adjustments. The acquisition
further strengthens our European onshore
platform and adds 152 MW in operation and
under construction, 526 MW of advanced
development projects to be build by 2026,
and approx. a further 1 GW development
pipeline. We expect to complete the
acquisition in H2 2022.
Western Trail
Wind, Wilbarger
and Baylor
counties, Texas,
the US.
38/38
Consolidated financial statements
Interim financial report First half year 2022
*Employee representative
Executive Board:
Board of Directors:
Statement by the Executive Board
and the Board of Directors
20/38
Management’s review
Interim financial report First half year 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 turbine, Gode Wind farm off the coast of
Germany, the North Sea
Publication
11 August 2022