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Orsted (Baa1/BBB): 1Q24 Results

UTILITIES

Neutral for spreads. Positive operational developments under the new CEO. Cash flow continues to weigh on metrics but with guidance confirmed and liquidity very strong this shouldn’t have an impact.


• Orsted posts a 17% revenue miss but EBITDA just 2% shy of consensus. FFO/ adj. net debt down to 19% from 29% at 4Q23 with drag from variation margin.

• Net debt continues to tick higher on negative FCF due to high capex.

• A previous write down on the US East Coast which impacted sentiment last year was reversed.

• FY24 EBITDA and gross investments guidance confirmed.

• Solid IG rating targeted with FFO / adj. net debt above 30%. No dividends until 2026. Minimal debt due before 2026.

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