Our 2024 Annual Accounts
2024 can be characterized as a relatively poor wind year, which consequently resulted in lower electricity production falling short of our budgeted expectations.
Most of our production is hedged on long-term hedging- and power price contracts. These contracts were signed at price levels that are below the current market conditions, this have had a significant negative impact on the result of the year. The hedging contracts will expire at the end of 2025.
The 2024 fiscal year was impacted by the establishment of our joint venture company with Eurowind Energy A/S, K/S Blue Holding with a total capacity of 186.3 MW. With this transaction Wind Estate’s portfolio of wind capacity had a net increase of 43.3 MW, equivalent to a 14% capacity increase. This transaction, involving selling 50% of the Company’s 16 Overgaard-turbines, has resulted in an accounting profit of DKKm 207, which has been recognized as income in the year. We expect the JV partnership to bring significant value creation in the years to come.
Two other significant milestones were achieved in 2024:
- Final Investment Decision (FID) for our share of the Hallendrup Wind Farm (4.5 MW). Additionally, we will acquire full ownership of the remaining 22.5 MW of the project at the Commercial Operation Date. When fully operational in spring 2026, the Hallendrup Wind Farm will consist of 6 turbines with a total capacity of 27 MW.
- FID was also made for the Brownhill project in Scotland, adding 8.5 MW to our Scottish capacity.
In addition, several projects have been accelerated and are well advanced towards the Ready-to-Build stage. Wind Estate is making substantial investments in our pipeline, and we therefore also experience increased development and pre-construction costs. This is a testament to our commitment to our strategy and future value creation.
Financial Performance
The 2024 income statement shows an EBIT of DKKm 156 and on 31 December 2024 the balance sheet showed an equity of DKKm 258. The realized EBIT was largely driven by the profit of DKKm 207 from the sale of turbines into the Blue JV partnership. If this transaction is disregarded, the EBIT for 2024 did not meet the expectation of DKKm 20–25.
The result for the year has a positive impact on equity. The equity is also affected by the financial power hedges, which due to the present level in merchant power price forwards have a negative mark-to-market value of DKKm 50 (after tax). However, the negative mark-to-market values have decreased during 2024 due to the decline in merchant power price forward curves and settlements for the year, thus having a positive impact on equity.
Outlook for 2025 and Beyond
Assuming a normal wind year and market-based power prices we expect a Wind Estate Group EBIT around DKKm -30 for 2025. These expectations include a budgeted negative impact of DKKm 59 from the long-term financial hedges, which will be fully settled by the end of 2025. The long-term power price contracts expire over the next three years. We continue to invest significantly in our development pipeline. These investments are expected to begin yielding results after the ongoing construction projects commence commercial operation in 2026.
In 2025 we will continue our pipeline investment strategy with significant development, and capital investments as more projects are reaching the FID and construction phase.
Management Statement
Quote Ane Mette Lysbech-Kleis, CEO:
“Our 2024 result did not meet our expectations, and of course, we are not happy with that. We are operating in an increasingly complex market, but we continue to believe in and invest in our people, development pipeline and spinning assets delivering in line with our strategy. Our development portfolio is robust, and we are seeing our “home grown” projects maturing and entering the construction phase in both Denmark and UK generating future positive returns. We have a high availability across our fleet and a very strong operational set-up which the recent 10-year production extension of our offshore wind farm, south of Samsø is testament too. The prospects for Wind Estate are exciting and promising, and we look forward to continuing improvement and development across our activities.”
Quote Casper Korsager Hardinger, CFO:
” Even though our results for 2024 have been unsuccessful, we start to see the harvesting of fruits of our investments in our early-stage project pipeline, which over time will generate future positive returns. The current market conditions are challenging however the future looks bright as our current adverse financial hedging position expires at the end of 2025. We will focus on optimizing our existing portfolio, including new projects coming into operations, leaving us with expected stronger performance and an optimized risk/reward profile of the business.”