ANNUAL REPORT 2011 - DONG Energy
ANNUAL REPORT 2011 - DONG Energy
ANNUAL REPORT 2011 - DONG Energy
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consolIdated RESULTS<br />
Cash flows from financing activities<br />
DKK million <strong>2011</strong> 2010 ∆<br />
Cash fl ows from<br />
fi nancing activities 4,918 1,122 3,796<br />
Cash flows from financing activities were DKK 4.9 billion<br />
compared with DKK 1.1 billion in 2010. The positive effect<br />
was primarily attributable to transactions with non-controlling<br />
interests (including a reduction in interest-bearing<br />
balances from previous years) of DKK 3.9 billion. To this<br />
should be added a net effect from the issuing and partial<br />
repurchase of hybrid capital in January <strong>2011</strong> of DKK 1.3 billion<br />
and the raising of DKK 1.5 billion short-term debt (repo<br />
transactions) and DKK 1.0 billion long-term debt for partial<br />
financing of the Danish offshore wind farm Anholt.<br />
Dividend paid to shareholders was DKK 2.2 billion and<br />
coupon to hybrid capital holders DKK 0.5 billion.<br />
Balance sheet<br />
DKK million <strong>2011</strong> 2010 ∆<br />
Assets 154,073 137,339 16,734<br />
Interest-bearing<br />
net debt 23,615 22,139 1,476<br />
Equity 57,740 51,308 6,432<br />
The balance sheet total increased by DKK 16.7 billion to<br />
DKK 154.1 billion at the end of <strong>2011</strong>. The increase primarily<br />
reflected <strong>DONG</strong> <strong>Energy</strong>’s continued investment activities<br />
in wind farms and oil and gas fields.<br />
Net interest-bearing debt increased by DKK 1.5 billion<br />
only, amounting to DKK 23.6 billion at the end of <strong>2011</strong>, as<br />
cash outflow from investing activities was largely financed by<br />
cash inflow from operating activities and disposals.<br />
Equity increased by DKK 6.4 billion, standing at DKK 57.7<br />
billion at the end of <strong>2011</strong>. The increase was primarily driven by<br />
profit for the year of DKK 2.9 billion, the issuing of hybrid capital<br />
in January <strong>2011</strong> with a net effect of DKK 1.3 billion and<br />
transactions with non-controlling interests amounting to DKK<br />
4.0 billion, while dividend paid and coupon payments to hybrid<br />
capital holders had an adverse effect on equity.<br />
32<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 />
Return on capital employed (ROCE)<br />
DKK million <strong>2011</strong> 2010<br />
Operating profi t (EBIT) 6,100 8,120<br />
Share of profi t of associates 36 77<br />
Hydrocarbon tax (1,516) (1,017)<br />
Interest element of<br />
decommissioning obligations (176) (196)<br />
adjusted operating profi t 4,444 6,985<br />
Non-interest-bearing assets 136,728 121,082<br />
Non-interest-bearing liabilities (55,373) (47,634)<br />
Capital employed 81,355 73,448<br />
Property, plant and equipment under<br />
construction (23,037) (19,145)<br />
Exploration assets (1,611) (975)<br />
Production assets transferred from<br />
property, plant and equipment under<br />
construction in the past six months (6,517) (7,022)<br />
adjusted capital employed 50,190 46,306<br />
Return on capital employed (ROCE), % 5.7 9.6<br />
Adjusted return on capital employed, % 9.2 15.1<br />
The return on capital employed was 5.7% in <strong>2011</strong> versus<br />
9.6% in 2010, while the adjusted return on capital employed<br />
was 9.2% in <strong>2011</strong> versus 15.1% in 2010. The return<br />
on capital employed is calculated on the basis of operating<br />
assets, defined as non-interest-bearing net assets. Adjusted<br />
return on capital employed has been calculated by also deducting<br />
the cost of assets under construction and exploration<br />
assets as well as production assets transferred from assets<br />
under construction in the six months preceding the<br />
balance sheet date. The reason for this is to take account of<br />
the fact that earnings are limited during the start-up phase<br />
in connection with the start-up of operation of an asset.<br />
Capital structure<br />
Adjusted net debt amounted to 2.0 times cash flows from<br />
operating activities at the end of <strong>2011</strong>. This was on a par with<br />
2010 and significantly below the target of adjusted net debt<br />
not exceeding 3.0 times cash flows from operating activities.<br />
The financial key ratio for capital structure will be<br />
changed, from and including 2012, with EBITDA replacing<br />
cash flows from operating activities in the denominator.<br />
The change is being made to link the capital structure target<br />
to EBITDA, which is <strong>DONG</strong> <strong>Energy</strong>’s overall performance<br />
measure, and which, following the introduction of<br />
business performance results, better represents the<br />
Group’s underlying financial performance. This financial<br />
key ratio stood at 1.9 times at the end of <strong>2011</strong>, which was<br />
also on a par with 2010.<br />
Further information on the capital structure can be<br />
found in the chapter Financial outlook for 2012.