Dong Energy turns to 9-mo profit, lifts 2013 forecast

Oct 23, 2013 - Danish state-owned utility Dong Energy A/S today boosted certain financial projections for 2013 after announcing that it had turned to a net profit of DKK 100 million (USD 18.5m/EUR 13.4m) in the first nine months of 2013.

A year back, the company posted an after-tax loss of DKK 2.4 billion. Dong explained that the turnaround was the result of increased earnings before interest, tax, depreciation and amortisation (EBITDA).

EBITDA nearly doubled to DKK 11.2 billion in the January-September period of 2013 from DKK 6.6 billion a year ago. It was helped by the improved performance of Dong’s wind power business and reduced costs in the reporting period. The company also noted that year-ago EBITDA was affected by provisions for onerous contracts.

On the back of the better-than-expected nine-months results, Dong Energy lifted its 2013 EBITDA guidance by DKK 500 million to between DKK 13.5 billion and DKK 14.5 billion.

The energy company now expects to reach by end-2013 its previously announced goal of having adjusted net debt that is equal to less than 2.5 times EBITDA. This will happen if the recently unveiled DKK-11-billion investment by Goldman Sachs Group Inc (NYSE:GS) and Danish pension funds Arbejdsmarkedets Tillægspension (ATP) and PFA Pension Forsikringsaktieselskab wraps up by the end of this year. In previous forecasts, Dong expected to achieve the debt-to-EBITDA ratio goal by end-2014.

Dong Energy is focused on offshore wind farm development and oil and gas exploration.

(DKK 10 = USD 1.845/EUR 1.340)

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