ANNUAL REPORT 2011 - DONG Energy

consolIdated RESULTS
Financial performance
BusinEss pErfOrmanCE
As described on pages 33 and 34, DONG
Energy introduced a new business performance
income statement in 2011. Unless otherwise
stated, the financial results in this review are
based on that. Comments to the balance sheet
are based on the IFRS consolidated balance
sheet. The business performance results have
been adjusted for temporary fluctuations in
the market value of contracts, including hedging
transactions, relating to other periods and
therefore represent the underlying financial
performance of the Group in the reporting
period.
rEsults fOr tHE yEar DEtErminED
in aCCOrDanCE witH ifrs
EBITDA for the year determined in accordance
with IFRS was DKK 15.6 billion versus DKK 14.1
billion in 2010. As described on page 33, with
effect from 1 January 2011, DONG Energy discontinued
the application of the provisions on
cash flow hedge accounting for commodities
and related currency exposures. Unlike 2010,
the results for 2011 determined in accordance
with IFRS were therefore affected by unrealised
market value adjustments on such transactions.
As the IFRS results for the two years are therefore
not comparable, no further comments will
be made on the IFRS results.
Oil, USD/bbl
125
120
115
110
105
100
95
90
85
80
75
70
Oil (Brent)
2010
28
manaGEmEnt’s rEviEw – DONG ENERGY GROUP ANNUAL ANNUAL REPORT REPORT 2011 2011
2011
DONG Energy’s revenue for 2011 was 4% ahead of 2010.
EBITDA was largely in line with 2010, matching the outlook
in the 2010 annual report. Operating cash flows were down,
primarily reflecting an increase in tax paid in Norway.
DKK million 2011 2010 ∆
Revenue 56,842 54,616 2,226
EBITDA 13,770 14,135 (365)
Cash fl ows
from operating
activities 12,624 14,214 (1,590)
The results for 2011 were affected by falling earnings in
Energy Markets due to a lower margin on gas sales, despite
a positive effect from renegotiation of gas contracts. Exploration
& Production, on the other hand, had a positive effect
on the results due to higher production and energy
prices, which were at a significantly higher level, throughout
2011, than in 2010.
Market prices
Oil and gas prices
The oil price was 40% higher, on average, than in 2010,
peaking in spring, when the market was affected by the unrest
in the Middle East and North Africa, including the
halting of production in Libya. Higher demand from emerging
markets, including India and China, helped prop up the
oil price.
The gas price remained relatively stable during the
year, with monthly average prices of EUR 22-23/MWh, and
was 31% higher, on average, than in 2010. The gas price
Spread, gas hub price
vs. oil-indexed gas price, EUR/MWh
2
0
-2
-4
-6
-8
Spread, gas hub price TTF vs. oil-indexed gas price BAFA
Olie (Brent)
2010
Source: Calculated by DONG Energy on the basis of input from Argus and BAFA
2011
Gasbørspris