Danske Bank med kommentar til Ørsted’s kamp med skattemyndighederne i Danmark:
Ørsted (MW) could potentially end up with an up to DKK8bn tax bill. Ørsted’s head of tax gave an interview in Danish media Finans, stating that if the Danish tax authorities’ logic is applied to all its UK wind farms, the final tax bill could rise from the current DKK4bn to DKK8bn. The head of tax also stated that he considers it very unlikely that the logic would be applied to other farms and also unlikely that Ørsted would not be successful in overturning the authorities’ decision. To recap, Ørsted was yesterday presented with a net DKK4bn tax claim from the tax authorities, as Denmark thinks that the value creation of the Walney ext. and Hornsea 1 wind farms happened in Denmark and not in the UK. Ørsted has appealed the decision to the Danish National Tax court. With today’s information we get some level of clarity on the potential downside in a worst case scenario. Given that such payment levels are unlikely, and if they happened, would not materialize for several years, we see the risk adjusted NPV of this as low. Furthermore, even DKK8bn would be manageable within current ratings, as we expect Ørsted to reduce its capex if it was slammed with such a tax bill. Overall, though, this remains credit negative.
