Renewable energy group Orsted will invest 475 billion Danish crowns ($68.3 billion) to achieve a 2030 goal to install 50 gigawatts (GW) of power capacity, it said ahead of an investors’ update later on Thursday.
The Danish company said the plans were fully self-funded and it expected to exceed goals set in 2021 for earnings before interest, tax, depreciation and amortisation (EBITDA) as well as for return on capital employed (ROCE).
Orsted’s share price rose 5.1% by 0754 GMT to reach a two-week high, outpeforming a 0.6% rise in Copenhagen’s benchmark stock index.
“We’re on track to outperform our previous EBITDA and ROCE targets for 2020-2027, confirming the significant value in our portfolio of renewable projects,” Chief Executive Mads Nipper said in a statement.
Orsted, the world’s No. 1 offshore wind farm developer by gigawatt capacity, operates 15.5 GW of renewable energy assets. Capacity of 4.9 GW is under construction and projects representing another 10.6 GW have been awarded, it said.
Demand for green energy is rising, but the wind industry, which requires high upfront investment has been hit by cost inflation and high interest rates.
Orsted’s share price has more than halved since peaking in January 2021.
The company said it was cooperating closely with suppliers to secure competitive prices and ensure sufficient value in projects for which it had not yet made final investment decisions.
It could reconfigure or exit projects if it finds the profitability does not meet the criteria for a final investment decision, it said.
Orsted’s “fully self-funded” investment plan suggests that the company won’t need to raise more equity from shareholders, Bernstein analysts said.
“Overall, we like what we have heard so far,” they wrote in a note to clients.
(Reporting by Terje Solsvik; Editing by Essi Lehto, David Goodman and Barbara Lewis)
