Orsted takes a hit from low UK wind speeds and gas prices

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Warmer weather, slower UK wind speeds and a court case saw a drop in pre-tax profits for Danish wind developer Orsted.

First quarter pre-tax profits were £414.8m, down from £437.8m in the same period last year.

Meanwhile revenues were £1.9bn, compared to £2.2bn previously, and operating profit (EBTDA) was also down to £587.6m from £633.8m in Q1 2018.

The “expected” decrease was partly due to a one-off payment for an arbitration case relating to a gas purchase contract in Q1 of 2018.

Offshore wind accounted for 66% of power generation but high speeds in Denmark and Germany were almost entirely offset by low wind speeds in the UK.

Meanwhile warmer weather meant gas prices were down 12%, while a 2% drop in UK power prices also meant Orsted took a hit.

Asset depreciation increased by 27% thanks to commissioning of new windfarms in the UK and Germany.

The Hornsea One and Two windfarms off the UK coast were among the main investments in Q1.

CEO Henrik Poulsen said: “We delivered strong results in line with expectations. Our full-year guidance remains unchanged.

“During the first quarter we have continued to strengthen our portfolio within both Offshore and Onshore.

“We remain very pleased with the operational and financial performance of the company as we continue to expand our position as a global leader in green energy.”