DONG Energy has ended the first quarter of 2016 with DKK 5.2 billion (EUR 699 million) net profit, a 49% increase compared to DKK 3.5bn net profit recorded in the first quarter of 2015, mainly attributed to a strong performance in the Danish energy company’s Wind Power sector.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was DKK 8.1bn in Q1 2016, compared with DKK 6bn in Q1 2015, corresponding to an increase of 35% on both reported and underlying basis. The underlying improvement was driven by a 53% increase to DKK 2.9bn in Wind Power, partly offset by lower gas, oil and power prices, DONG said.
The company’s adjusted return on capital employed (ROCE) for the last 12 months was 14% compared with 5% at the end of Q1 2015.
Gross investments in the quarter totalled DKK 4.2 billion, mainly related to offshore wind activities, including Gode Wind 1 & 2, Walney Extension, Burbo Bank Extension, Race Bank and Hornsea 1, as well as oil and gas fields. Interest-bearing net debt decreased from DKK 9.2 billion at the end of 2015 to DKK 0.9 billion at the end of March 2016.
”Wind Power reached some significant milestones during Q1 2016 with the final investment decision on the Hornsea 1 project and the 50% farm down of the Burbo Bank Extension wind farm, both in the UK, as main achievements,” Henrik Poulsen, DONG Energy’s CEO and President, said.
”Hornsea 1 will become the world’s largest offshore wind farm and the largest investment in DONG Energy’s history. Wind Power continues to grow on the back of new offshore wind farms being constructed. We are currently working on six major offshore wind farms in the UK and Germany and they are all well on track. We continue to build our pipeline of wind farm projects beyond 2020. We acquired 1 GW offshore project rights in the US taking our total US project rights to 2.5 GW. Furthermore we have taken initiatives to expand our geographic scope by establishing a presence in Taiwan in order to explore offshore wind opportunities in the Asia-Pacific region.”
Looking ahead, DONG still expects the full-year EBITDA to be between DKK 20bn to DKK 23bn; however, the gross investments for 2016 are now expected to be in the range between DKK 18bn and 21bn, and not DKK 20-23bn as announced in the company’s previous guidance.
”Our strategic shift towards renewables and green customer solutions is well under way and continues to support our strong financial performance – both short and longer-term, which has led us to increase our ROCE expectation for the Group from 12% by 2020 to 12%-14% in the period 2017-2020,” Poulsen said.
”The preparations for a planned IPO of DONG Energy proceed according to plan and the shareholders and the Board of Directors continue to target a listing of the company before the end of Q1 2017.”