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