DONG Energy Sees Increased Profit In 2015, Loses Out On Oil & Gas
Danish wind energy giant DONG Energy has published its 2015 financial results, reporting a 13% increase in operating profit over 2014 figures.
Unsurprisingly, given continually good figures all throughout 2015, DONG Energy revealed an operating profit increase of 13%, reaching DKK 18.5 billion in 2015, and falling right in the middle of the company’s forecasted 17-19 billion. DONG Energy attributed the increase to “a positive development in the underlying business” thanks primarily to “higher production from offshore wind.”
When accounting for the divestment gains made in 2014 following the company’s decision to fully divest from onshore wind, DONG Energy note that its “underlying profit growth was significantly higher.”
“Despite strong headwinds in the commodity markets, we delivered a record-breaking operating profit in 2015,” exclaimed the company’s CEO, Henrik Poulsen.
However, the company’s net profit for the year amounted to a loss of DKK 12.1 billion, compared to a loss of only DKK 5.3 billion in 2014. 2015’s results were directly impacted by impairment losses of DKK 15.8 billion after tax, including DKK 14.8 billion in the company’s Oil & Gas division caused by the continued fall in oil and gas prices.
However, as was recently reported, DONG Energy is nevertheless intending to hold onto its Oil & Gas division (its Exploration & Production business), as a means to finance renewable energy projects (though by the looks of things, it may be the other way around).
“The focus on renewables has turned DONG Energy into one of the fastest-growing energy groups in Europe and created a unique platform for continued growth and value creation,” continued Poulsen. “The strategic shift in business mix will also reduce DONG Energy’s exposure to commodity price risk as a higher share of revenue will be
regulated and contract-based.”
At the same time, DONG Energy announced that Westermost Rough Ltd — the developer behind the offshore wind farm of the same name and a wholly owned subsidiary of DONG Energy, the UK Green Investment Bank, and Marubeni Corporation — announced that it had signed an agreement for the sale of the offshore wind farm’s transmission assets to TC Westermost Rough OFTO Limited.
TC Westermost Rough OFTO Limited is the licensee entity incorporated by the consortium comprised of Transmission Capital Partners Limited Partnership, and International Public Partnerships Limited. The transmission assets hold an asset value of £157 million, or DKK 1.5 billion, and include the onshore substation, export cables, and the offshore substation.
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