Dong blows into loss in first post-IPO results

Danish energy group Dong Energy reported a quarterly loss on Thursday, two months after the world's largest operator of offshore wind farms successfully listed on the Copenhagen stock exchange.

Dong blows into loss in first post-IPO results
Dong has transformed itself into a renewable energy leader. Photo: Dong
The company swung to a loss of 1.86 billion kroner (250 million euros, $278 million) in the second quarter compared to a profit of 93 million kroner in the same period a year ago.
A 12 percent drop in revenue after stripping out one-off items “was mainly due to lower gas and oil prices,” said the government-controlled group, which still has conventional energy assets.
The decline was partially offset by a doubling of revenue from construction contracts for offshore wind farms and transmission assets, it added.
Sydbank analyst Morten Imsgard said the results were slightly below his expectations, mainly as a result of the weather not being windy enough.
“It's literally because it has been less windy. That's the way it is when you operate wind farms,” he told news agency Ritzau.
Excluding one-off items, Dong Energy made a profit of 814 million kroner, compared to a 502 million kroner profit in the same quarter last year.
“Performance for the first six months of the year has been very satisfactory, both financially and strategically,” chief executive Henrik Poulsen said in a statement.
Dong Energy listed 17.4 percent of its shares on the Copenhagen Stock Exchange on June 9, after selling coal-fired assets in recent years and transforming itself into a global renewable energy leader.
The 2014 sale of an 18 percent stake in the company to a consortium led by US investment bank Goldman Sachs was controversial and nearly toppled the former centre-left government.
Shares in Dong Energy were 2.45 percent lower at 275 kroner in late morning trading on the Copenhagen bourse, but significantly higher than the June listing price of 235 kroner.


Denmark’s Dong Energy profits soften as wind drops

Denmark's leading wind energy group Dong Energy said Thursday earnings fell in the first quarter, partly because winds were not up to snuff at the start of the year.

Denmark's Dong Energy profits soften as wind drops
Photo: Erik Refner/Scanpix

Net profit fell by 47 percent to 3.19 billion kroner (429 million euros), and turnover by one percent to 17.42 billion.

A month of January “with weak winds” caused a lull in production, although February and March were “close to a normal wind year”, it said.

READ ALSO: Dong gets nod for 'world's biggest offshore wind farm'

Dong said earnings also suffered by comparison to a particularly strong year-earlier quarter when the renegotiation of gas purchase contracts and the sale of its gas distribution boosted income.

Dong shares swiftly ran into headwinds on the Copenhagen stock exchange in reaction Thursday, falling 1.9 percent in morning business.

The results for offshore wind, which the group considers its core business, deteriorated with a 19 percent decline in turnover and a 26 percent drop in gross operating income (EBITDA).

But Dong boosted its wind power production by 24 percent to 2.1 terawatt hours thanks to a rise in its capacity in mainly Germany and Britain.

READ ALSO: Denmark's Dong Energy to ditch coal by 2023

We are seeing significant momentum in the offshore wind industry, with innovation and notably reduced costs creating new market opportunities and an ever-stronger value chain. Competitive intensity is escalating,” CEO Henrik Poulsen said in a statement.

The group welcomed the strong contribution of an activity it wants to spinoff, oil and gas, thanks to a “high and stable production” and a 70 percent cut in investments.

Poulsen reiterated the company still aims to sell this business this year, without giving any indication of a possible buyer. 

READ ALSO: New probe of Denmark's Dong sale to Goldman Sachs