COPENHAGEN, Nov 3 (Reuters) – Danish energy company Orsted (ORSTED.CO) raised its profit forecast for the year on Thursday, citing high electricity prices, while third-quarter core earnings were slightly below expectations as it key offshore units.
Orsted now expects 2022 earnings before interest, tax, depreciation and amortization, excluding new partnerships, to be between DKK 21 billion and DKK 23 billion ($2.77 billion to $3.03 billion), higher than The previous 20 billion to 22 billion.
It said the better outlook was mainly due to higher earnings from its smaller business, Bioenergy & Other, which operates a combined heat and power plant “due to higher electricity prices in Denmark”.
The unit benefits from soaring electricity prices, while Orsted’s wind and solar power business is locked in through subsidised contracts and long-term power purchase agreements.
Bioenergy & Other’s core earnings rose 53% in the third quarter, beating estimates, while the Danish company’s main offshore wind division lagged estimates.
Sydbank analyst Per Fogh said the blunder in the offshore sector was partly due to over-hedging, as the company had to buy production at high market prices after lower-than-expected production this quarter.
Quarterly earnings before interest, taxes, depreciation and amortization (EBITDA), which includes new partnerships, rose to 12.3 billion Danish crowns ($1.62 billion), compared with the 12.7 billion Danish crowns expected by analysts in a poll prepared by the company.
(1 USD = 7.5910 DKK)
Reporting by Stine Jacobsen, Additional reporting by Nikolaj Skydsgaard, Editing by Terje Solsvik
Our Standard: The Thomson Reuters Trust Principles.