Dong Energy’s Earnings Up Thanks to Offshore Wind
DONG Energy issued an interim financial report for 9M 2014, which states that the company’s EBITDA was DKK 13.0 billion for this financial period, compared with DKK 11.2 billion for 9M 2013. The increase relative to the same period last year was due to higher earnings from wind activities, including a gain from the divestment of 50% of DONG Energy’s ownership interest in the UK offshore wind farms London Array and Westermost Rough as well as higher production in E&P.
On the other hand, falling gas prices decreased the earnings. The gas activities in Customers & Markets were negatively impacted by oil-indexed gas sourcing contracts which have not yet been renegotiated. Moreover, Thermal Power earnings declined due to warm weather.
Business performance EBITDA for 2014 is expected to exceed DKK 16 billion compared with the previous outlook of DKK 15-17 billion.
CEO Henrik Poulsen said: “We continue to see good progress in the execution of DONG Energy’s strategic priorities, and the company’s financial improvements also remain firmly on track. In Q3, we reached a number of strategic milestones. These included the divestment of 50% of the Gode Wind 2 offshore wind farm to a Danish consortium of pension funds, the successful completion of the multi-year repair of the Siri platform, and the completion of the 389 MW wind farm West of Duddon Sands in the Irish Sea.
“West of Duddon Sands was officially inaugurated on 30 October. In October, we also signed an agreement to sell the Stenlille gas storage facility to Energinet.dk. In September, the E&P division launched an effort to simplify the organisation and make it more efficient in order to continue to deliver value to the Group.
“In light of the continued positive trend in DONG Energy’s performance, we have adjusted the outlook for 2014 and now expect EBITDA to exceed DKK 16 billion compared with the previous outlook of DKK 15-17 billion announced in February.
At the same time, we adjust the outlook for our primary credit metric, FFO/net debt, from previously around 25% to now in excess of 28%, which supports our current ratings. In summary, we are pleased with the progress being made throughout the company. DONG Energy’s employees deserve significant credit for the skills and determination they bring to bear every day.”
Press release; Image: Dong Energy