9M23: Costly adventure ends for Ocean Wind 1 & 2

Orsted announced the cessation of US offshore parks Ocean Wind 1 & 2 resulting in a massive impairment of DKK28.4bn ($4bn) booked in 9M23, plus an additional impairment of DKK8-11bn to be booked in the Q4 – a substantial increase from the initial DKK16bn ($2.3bn) announced in August. The FY23 EBITDA guidance remains unchanged in a DKK20-23bn range whilst the capex guidance has been reduced for the second time this year, by DKK4bn to DKK40-44bn.

Offshore outlook darkens, more than 50% of the US portfolio written-down

Orsted surprised the market with the announcement of an impairment series of up to DKK16bn ($2.35bn) related to US offshore wind assets. The group is facing many issues associated with additional delays, supply-chain disruptions, expected tax reduction not achieved, increased costs, and the impact of rising interest rates. The market’s expectations of offshore projects are high and Orsted reminds us that their execution is complex and that in the end it is all a matter of DCF with its multiple v

H1 23: Disappointing Q2 amid lower prices and poor wind conditions

After a weak Q1 which was negatively affected by lower prices and poor wind conditions, the Q2 results were down owing to the same reasons, with no compensation this year from new partnerships/farm-downs which had contributed DKK1.6bn in H1 last year. Orsted nevertheless confirmed the guidance provided for 2023 at the beginning of the year with EBITDA expected in a DKK20-23bn range. However, the Capex guidance has been officially lowered by DKK6bn for timing reasons, from DKK50-54bn to DKK44-48

CMD 2023: Higher leverage but no dilution to invest DKK475bn by 2030

Orsted confirmed its 2030 ambition to reach c.50GW of installed renewable capacity worldwide. To reach this objective and keep its No.1 position in offshore wind, they now foresee investing a gross amount of DKK475bn vs DKK350bn in the previous 2020-27 plan excluding JVs and Engineering, procurement, and construction partnerships (EPC).

Q1 23: lower prices but offshore has the wind in its sails

Orsted’s EBITDA registered a 27% decline in Q1 23 against the backdrop of a sharp decline in gas prices since Q4 22. Unfavourable spreads for power-condensing generation weighed on the CHP plants with EBITDA on Bioenergy & Other down by 79% yoy to DKK2bn. However, the normalisation in power prices allowed the group to reverse last year’s loss, due to ineffective overhedging positions, with a DKK2bn positive contribution to EBITDA.

FY22: after such a record year, what perspectives for 2023?

After a year against a backdrop of unprecedented volatility on the energy markets, Orsted set a record in 2022, with EBITDA up by 32% yoy to DKK32.1bn, including new partnership agreements, despite lower than expected results in Q4. The group benefited from growth in onshore and solar PV units, as well as Bioenergy & Other segment, which offset the lower earnings in offshore wind. Given a normalisation in energy prices, Orsted confirmed a conversative EBITDA guidance of DKK20-23bn.

Q3 22: another quarter supported by Bioenergy & other segment

Orsted reported another encouraging Q3 22 with EBITDA up by 313% to DKK12.317bn vs Q3 21, leading the Danish offshore giant to upgrade its FY2022 guidance by DKK1bn. Here again, the outlook was driven by a good performance in the Bioenergy & other segment, amid volatile energy prices, offsetting the decrease in offshore and onshore wind power generation. The group also conserves its dynamic in renewable investments which also supported in its EBITDA guidance increase.

Supreme (SUP LN) - Initiation of coverage

FY24 Interim results: A record H1 performance delivered revenue growth of 62.5% to £105.1m (H1 FY23: £64.6m), with growth across all divisions: Batteries +1.4%, Lighting +21.8%, Sports Nutrition & Wellness +17.5%, Vaping +32.5% (ex- ElfBar) and Branded Distribution +798.9%, which includes revenue of £26.4m from the ElfBar distribution opportunity, commenced in June. Adj. EBITDA of £15.2m is +88.0% (H1 FY23: £8.1m) benefitting from higher sales, and operational efficiencies. Adj. PBT of £12.6m is

Brickability Group - A diversified and resilient model

Today’s interims are in line with the recent trading update (11th October) and as such we make no changes to forecasts. Revenue of £324.8m represents a LFL decline of 14%, with EBITDA of £25.6m (H123: £25.5m). This is a strong performance, against what is a challenging market backdrop and underlines the benefits of its diversified operating model and focused strategy. We therefore continue to be surprised at the weakness of the share price, especially in the context of a broader peer group. Putt

Epwin (EPWN LN) - Confirmation of FY23 estimates and buyback announced

Epwin has released a brief trading update confirming that it is on track to meet FY23 estimates. It has also announced its intention to start a buyback, indicating the Board’s confidence in the business going into FY24, despite the volatile operating environment. Zeus leave profit estimates unchanged across the forecast period. This is a continuation of the performance over the last few years, the business has met or beaten consensus numbers since FY20, has not raised equity and managed its bala

Supreme Plc+ (SUP, House Stock at 110p) - Exceptional H1 - 'significantly' raised FY24F guidance

Morning Note – 28 November 2023

Strong H1 results raise full year outlook

The H1 outcome was as indicated in the recent (18 October) Trading Update. Group guidance for the full year is now raised: from revenue of £195m - 205m to £210m - £220m (ED estimate was £204.2m); (adj.) EBITDA from £28m - £30m to £32m - £35m (ED estimate was £29.0m). From incremental EBITDA of c.£4.5m, c.£1.5m arises from core operations and c.£3.5m from the Elf distribution agreement, which supplies retailers including Tesco, Morrisons, One Stop and WHSmith. A series of initiatives – branding

Epwin Group+ (EPWN, House Stock at 67p) - Trading update and share buyback

Making positive progress on all fronts

UK-Listed Energy Sector: Review of the UK oil and gas landscape – why the country needs it, current policy and tax

The front of this note takes a look at the UK oil and gas sector, why domestic production is advantageous, what the main political parties think, and what could happen going forward. The latter part contains a review of the companies in our coverage – some that are UK centric, which give exposure to the note’s wider theme, and others that are focused elsewhere.

James Cropper + (CRPR, House Stock at 725p) - Directorate changes

Plant Health Care - Outperforming the unprecedented destocking

Plant Health Care has announced a trading update, noting that market conditions in the wider agriculture market have deteriorated but that it continues to outperform the wider market with growth in all regions except the US. In the US, aggressive inventory destocking means orders that were expected in 4Q FY23 are now projected in early FY24. Plant Heath Care therefore now anticipates revenue for FY23 to show flat to modest growth over FY22 (which compares to the crop protection sector where reve

Quadrise+ (QED, House Stock at 1p) - AGM update

SP Angel Morning View: Iron ore rises to $135/t as steel inventories fall

LIBERUM: Severfield: Strong growth prospects

LIBERUM: Yü Group: Eight reasons why Yü is winning