Wind helps Dong Energy lift H1 net profit by 230%

Aug 27, 2014 - Danish state-owned utility Dong Energy A/S said today it had boosted its first-half net profit by 230% on the year to DKK 1.43 billion (USD 251m/EUR 190m) mainly thanks to higher earnings from its wind business.

The improved bottom line result included a gain on the sale of half of Dong’s 50% stake in the 630-MW offshore wind farm London Array 1 and the disposal of a 50% interest in the 210-MW Westermost Rough wind project off Yorkshire. Higher electricity production during the period also contributed to the result, the company, which is focused on offshore wind power and oil and gas exploration and production, explained.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased to DKK 9.8 billion from DKK 7.8 billion. The wind segment’s EBITDA alone came at DKK 4.46 billion, rising from DKK 2.35 billion a year earlier as a result of the offshore wind farm stake sales. Yet, this was in part offset by lower earnings from construction contracts.

Dong’s wind power business brought DKK 5.65 billion in revenues in the first six months of 2014, marking a decline from DKK 6.83 billion a year back. The drop was due to lower power generation and the divestment of several wind and hydropower plants in 2013. The company’s wind and hydro power facilities produced 2.6 TWh, or 7.1% less electricity when compared to the year-ago period.

Chief executive Henrik Poulsen pointed out that the award of subsidies to the UK offshore wind projects Burbo Extension, Walney Extension and Hornsea is providing security for the company's pipeline up to the end of the decade. "[This] will allow us to focus on our objective of significantly reducing the costs of electricity generation from offshore wind," the company head noted.

Looking ahead, the utility reaffirmed its forecast for 2014 EBITDA of between DKK 15 billion and DKK 17 billion.

(DKK 1.0 = USD 0.177/EUR 0.134)

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