Danske Bank analyse: Ørsted – Q4 2020 initial comment

Ørsted (MW) delivered a FY2020 that was largely in line with expectations and landed just a whisker ahead of the DKK18bn EBITDA level that was announced already in early January. Q4 EBITDA was up 9% y/y driven by the ramp up of several on- and offshore windfarms and higher than average wind-speeds. The report also repeats the DKK15-16bn outlook for 2021. The lower earnings outlook y/y from ongoing operations is due to lower expected wind speeds, lower subsidized income from old Danish farms and higher operating and development costs. Positively for Ørsted’s credit metrics, the group still expects to close the 50% divestments of both Greater Changua 1 in Taiwan and the Dutch Borssele 1&2 offshore wind parks. Ørsted’s reported adj. FFO to net debt landed at 48% up 17ppt q/q. This remains comfortably ahead of S&P’s expectations of 25-40% for the current ‘BBB+’ rating and Ørsted’s target of above 30%. Ørsted repeats that it continues to target a minimum rating of ‘BBB+’. Overall a credit neutral report at first glance