OErsted A/S
Strong strategic progress and raised outlook for the year
DONG Energy A/S / Half-yearly Results
Full-year EBITDA outlook raised from DKK 15-17 billion to DKK 17-19 billion
Our expectations for partnership income in H2 2017 have increased, as we have entered into an agreement to divest of 50% of Borkum Riffgrund 2 in 2017 instead of 2018. This means that we have raised our outlook for the Groupâs operating profit (EBITDA) for 2017 to DKK 17-19 billion from previously DKK 15-17 billion, corresponding to an underlying growth of 18-32%. In May and June, we inaugurated the UK offshore wind farm Burbo Bank Extension and the German offshore wind farms Gode Wind 1 and 2. Furthermore, in May we produced the first power from Race Bank, which is expected to be commissioned in Q1 2018. Our offshore wind farms under construction are progressing according to plan. We are also continuing our efforts to expand our portfolio of offshore wind projects for construction after 2020. In July, we entered into a partnership agreement with the US-based energy company Dominion Energy concerning a development project off the coast of Virginia. The project will initially involve construction of a 12MW demonstration plant, which may pave the way for future cooperation on further offshore wind development in Virginia. We expect to submit a bid in the UK auction for the Hornsea 2 project on 14 August, and we expect to know the outcome of the auction in September. The deadline for submitting bids in the auction in Massachusetts, USA, is in the second half of December this year, and we expect to know the outcome of this auction in mid-2018 at the latest. We expect to commission the first commercial REnescience plant in Northwich in the UK, turning unsorted waste into green energy and recyclable materials, during Q3 2017. The plant is still in the ramp up phase, and the coming months will be devoted to optimising and monitoring production and quality, while working to mature additional REnescience projects. Our pipeline focuses on opportunities in the UK, the Netherlands and Malaysia. On 24 May, we announced an agreement to divest our oil and gas business to the British chemical company INEOS. The agreement is awaiting approval by the authorities in Norway, Denmark and the UK as well as other third parties. We expect the transaction to be closed by the end of Q3. Within one to two years we will likely have excess investment capacity compared to the target rating of BBB+/Baa1, assuming the current dividend policy, the current farm down model, the current Wind Power build out plan as well as the ambition of a 1 GW per year offshore wind build out from 2021-2025 are continued. The likely excess investment capacity materialises as more and more Wind Power assets come on line and start generating cash flow and has recently been positively impacted by the experienced decline in the build out cost per MW (LCoE). Value-enhancing, green growth opportunities beyond the current investment plan will thus be explored against tight strategic and financial criteria. This could naturally include additional opportunities within offshore wind â which remains our core focus â as well as other renewable technologies and within our downstream, customer-facing business. All of this supporting DONG Energyâs vision to play a leading role in the energy transformation. After the farm down of Borkum Riffgrund 2 and the expected farm downs of Walney Extension and Hornsea 1, we will only consider farm downs subject to substantial value creation and risk diversification. Any excess financial headroom will be returned to shareholders in a disciplined manner through increased annual dividends and/or share buybacks. In recent years, our employees have made an outstanding contribution to transforming DONG Energy from a Danish company primarily focused on gas, oil and coal to being a global leader in renewable energy. They continue to pursue profitable, long-term growth and deserve huge recognition for their entrepreneurial spirit, diligence and hard work.â
The outlook for gross investments is unchanged relative to the annual report for 2016 and is still expected to amount to DKK 18-20 billion.
⢠In May, we achieved first power at Race Bank and inaugurated the Burbo Bank Extension offshore wind farm. In June, we inaugurated the Gode Wind 1 & 2 offshore wind farms
The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. |
Language: | English |
Company: | DONG Energy A/S |
Denmark | |
ISIN: | XS0253170335 |
Category Code: | IR |
TIDM: | 65XG |
Sequence No.: | 4516 |
End of Announcement | EQS News Service |