Dong Energy’s operating profit (EBITDA) for the first nine months of 2106 increased by 16% to DKK 17.2bn compared to the same period in 2015, while underlying operating profit increased by 24%. This was driven by a 53% increase in wind power and the renegotiation of gas purchase contracts totalling DKK 3.8 bn.
Dong announced it will sell off its oil and gas division. In January, the energy company said it had decided not to sell the division, ahead of its initial public offering. Chief executive Henrik Poulsen said: “We have decided to initiate a process with the aim of ultimately exiting from our oil and gas business. This should be seen in the context of Dong Energy’s strategic transformation towards becoming a global leader in renewables and a wish to ensure the best possible long-term development opportunities for our oil and gas business. There can be no assurance as to the outcome or the timing of the completion of the process.”
The division currently makes up a quarter of the firm’s earnings before interest, tax, depreciation and amortisation. Analysts at Bernstein suggested the sale was driven by a recent rise in the oil price, and could bring Dong a sum roughly equal to its current net debt.
Poulsen said the wind division was celebrating several recent big wins, including approval of the 1.8GW Hornsea 2 project. The company currently has seven large offshore wind farms under construction. He said: ”In Q3, two technical milestones were achieved. Using two custom-built tracked vehicles, we managed to lay the export cable from the Race Bank wind farm without causing damage to a sensitive coastal marsh area. In September, at the Burbo Bank Extension wind farm, we installed the world’s first 8MW offshore wind turbine.”
He added: “The only significant challenge facing the portfolio of construction projects is Gode Wind in Germany, where a cable fault has delayed the final commissioning of the wind farm. The cable is not part of Dong Energy’s responsibility, and we are to a large extent compensated by the transmission system owner.”
Read more about Hornsea Project One