The Board of Directors of DONG Energy has today approved the interim financial report for the first nine months of 2013 with the following financial highlights compared with the first nine months of 2012:
Upward revision of 2013 earnings outlook
The outlook for EBITDA, net investments and capital structure is as follows:
CEO Henrik Poulsen:
“The results for the first nine months of the year highlight the fact that DONG Energy’s performance and financial strength are on the right track. Earnings (EBITDA) are rising significantly, while debt is falling, ensuring a considerable improvement in the Group’s financial key ratios.
In recent months, all four business units have thus been performing better than previously expected, providing the basis for an upward revision of our full-year EBITDA outlook by DKK 0.5 billion to DKK 13.5-14.5 billion.
At the same time, the Group is developing positively in accordance with the 2020 strategy announced earlier this year. The strategic focus on maintaining and developing DONG Energy’s global leadership position in offshore wind has led to a doubling of earnings from Wind Power in 2013, driven by the completion of the two large wind farms London Array and Anholt. A further three wind farms are under construction, two in the UK and one in Germany, and these are expected to be completed in the course of 2014 and 2015. Overall, the development in Wind Power is highly satisfactory.
Despite production problems in the second and third quarters we expect to close the full year with increased oil and gas production in E&P driven by DONG Energy’s increased stake in Ormen Lange. This will contribute to E&P yet again making a substantial contribution to the Group’s overall earnings. E&P also has a strong focus on the repair work to the Siri platform and the development of the two large projects Laggan-Tormore (UK) and Hejre (DK). Unfortunately, the third quarter also featured an impairment loss of DKK 0.4 billion after tax on the Norwegian fields Oselvar and Ula. The production wells and production characteristics on Oselvar have not been developing in line with expectations, resulting in a reduction of the reserve estimate.
The newly merged unit, Customers & Markets, is also developing according to plan. For example, good headway is being made in terms of strengthening the development in the Markets division which suffered a considerable loss in 2012. It is still expected that last year’s loss will be turned around to break-even in 2013.
Thermal Power is focusing on improving production efficiency at the thermal power stations while at the same time converting an increasingly larger proportion of production from fossil fuels to sustainable biomass. This business unit is making a sound contribution to the Group’s EBITDA again in 2013 despite the difficult market conditions.
The implementation of the financial action plan announced in February 2013 is still proceeding according to plan. Divestments or agreements on divestment of non-core assets totalling DKK 9.3 billion have been made compared with the objective of DKK 10 billion in total for 2013-2014, and we are still working on a couple of potential divestments. Cost reductions in the region of DKK 1.1 billion have been made compared with 2012, underpinning our expectation of achieving the announced target of DKK 1.2 billion. Lastly, on 2 October, we were in a position to announce that the main terms of a DKK 11 billion equity injection from three new investors, Goldman Sachs, ATP and PFA, were in place. The final agreement is expected to be signed by the end of the year.
One of the Group’s top priorities is safety. We focus strongly on ensuring that management, employees and suppliers jointly contribute to a safe working environment. However, on this point, we did not see the desired improvement in 2013. The injury frequency was 3.8 after the third quarter compared with 3.3 in 2012 and a target of 3.2 for 2013. We must therefore further intensify our efforts to improve safety through a variety of action areas.
DONG Energy’s satisfactory financial development is due solely to the expertise and commitment contributed by the Group’s 6,500 employees every single day.”
In connection with the presentation of the interim financial report a conference call for investors and analysts will be held on Wednesday 23 October 2013 at 11.00am CET:
Denmark: +45 3272 8018
International: +44 145 255 5131
The conference call can be followed live at the following address: http://www.dongenergy.com/conferencecall
Presentation slides will be available prior to the conference call at the following address:
The interim financial report can be downloaded at:
For further information, please contact:
Karsten Anker Petersen
+45 9955 9662
Allan Bødskov Andersen
+45 9955 9769
DONG Energy is one of the leading energy groups in Northern Europe. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. DONG Energy has around 6,500 employees and is headquartered in Denmark. The Group generated DKK 67 billion (EUR 9.0 billion) in revenue in 2012. For further information, see www.dongenergy.com