Dong Energy’s maiden results disappoint

Dong Energy’s maiden results disappoint©Bloomberg

Dong Energy delivered a mildly disappointing maiden set of results as a listed company just weeks after the Danish offshore wind group became the world’s largest stock market flotation this year. 

Sales in the second quarter fell 12 per cent to DKr16.4bn ($2.45bn) compared with a year earlier while its preferred measure of profitability — underlying earnings before interest, tax, depreciation and amortisation (ebitda) — fell 2 per cent to DKr4.32bn. Consensus estimates from analysts were for sales of DKr17.3bn and ebitda of Dkr4.44bn, according to figures provided by Dong. 

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The world’s largest offshore wind developer and operator raised DKr19.7bn from its flotation in June as investors including the Danish government and Goldman Sachs reduced their stakes. 

The shares, which had risen 20 per cent since their listing in Copenhagen, were down 2.9 per cent at lunchtime on Thursday. 

Henrik Poulsen, Dong’s chief executive, hailed the results as showing the strategy of pushing aggressively into offshore wind was paying off for what was once purely a Danish utility. Ebitda at its wind power unit almost doubled in the quarter to DKr2.3bn. 

Mr Poulsen said that “analysts are still getting their arms around how we operate” with a wide range of estimates heading into the results. “We are relatively new to the stock exchange . . . We believe this is a strong set of numbers,” he added. 

Dong, which unsuccessfully tried three times before to list, pulled off the listing just weeks before the vote to exit the EU in the UK, one of its biggest markets. 

Mr Poulsen underscored Dong’s commitment to the UK, saying it would stick by its pledge given earlier this year to invest £6bn in the next five years on top of its £6bn of investment in the past decade. 

“When it comes to the fundamental energy policy in the UK, we don’t expect big changes to the offshore wind market with support to continue. It is important for the security of supply and industrial strategy,” he added. 

Dong’s chief executive declined to speculate on the fate of the proposed Hinkley Point nuclear power plant after the UK government again delayed its approval of the controversial plan. But Mr Poulsen added that “should there be a need for offshore wind to fill a gap” he had no doubts that Dong and others could deliver that. 

The costs for offshore wind have been coming down rapidly and Dong won a tender in the Netherlands last month at the lowest cost yet achieved — the same as its 2020 target of €100 per MWh. That compares with US Department of Energy estimates for 2020 of about €85 per MWh for nuclear power and €70 per MWh for natural gas. 

Dong reiterated its guidance for the full year of ebitda of DKr20bn-23bn. It amounted to DKr12.4bn in the first half.

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Dong Energy’s maiden results disappoint
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