In its first financial earnings report since its wildly successful IPO, Danish wind energy giant DONG Energy reported mixed results, with a rise in profits but a drop in sales.
DONG Energy, following the long-anticipation of its initial public offering, launched the most successful IPO of the year-to-date, and saw its valuation reach DKr108bn ($16.5 billion) the day after.
While expectations have been high for DONG Energy, its first post-IPO financial results left many mildly disappointed. The company reported net profits of DKK 6.4 billion for the first half of 2016, up DKK 3.6 billion on H1’2015. Operating profit did increase somewhat, as did its free cash flows.
“We achieved very satisfactory results for H1 2016,” said Henrik Poulsen, CEO and President. “The Group’s operating profit increased by 19% compared to the same period last year, driven by strong growth in Wind Power.”
However, sales for the second quarter only amounted to DKK 16,420 million, down DKK 4,171 million on the previous quarter, and down on the same quarter a year earlier as well. Company EBITDA was also down, falling to DKK 4,320 million, down DKK 3,432 million on the previous quarter. According to the Financial Times, analysts were expecting sales of DKK 17,300 million.
DONG Energy was also busy in the second quarter. “In June, we decided to invest in the German offshore wind farm Borkum Riffgrund 2, and in July we were awarded the right to build the Dutch offshore wind farms Borssele 1 and 2,” Mr Poulsen continued.
“The German and Dutch offshore wind projects are based on our strong and differentiated business model and will contribute to the continued profitable growth of the Group. Our winning bid for the Dutch wind farms is the result of our systematic efforts to reduce the costs of offshore wind power – and tangible evidence of the long-term potential of offshore wind power. With Borssele 1 and 2, we will for the first time be below EUR 100 per MWh in LCoE.”