ANNUAL REPORT 2011 - DONG Energy

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