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DONG Energy of Denmark posts huge loss as oil, gas prices drop

Xinhua, February 4, 2016 Adjust font size:

Denmark's DONG Energy lost 12.1 billion Danish kroner(1.82 billion U.S. dollars) in 2015 due to lower oil and gas prices, the company said on Thursday.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 18.5 billion kroner in 2015, up 13 percent from 16.4 billion kroner in 2014, the company's annual results showed.

The increase was due to a positive development in the underlying business as well as insurance compensations, partly offset by gains on divestment in 2014, the company said.

However, losses amounted to 12.1 billion for the full year 2015, up from 5.3 billion losses in 2014.

DONG Energy said the results were impacted by impairment losses of 15.8 billion kroner after tax, including 14.8 billion kroner in its oil and gas business caused by the continued fall in oil and gas prices, a reduction in reserve estimates as well as continued challenges with the Hejre project.

As a result of the high level of investments, Dong Energy's net debt increased by 5.2 billion kroner to 9.2 billion kroner, year-on-year.

"The ongoing restructuring of the oil and gas business in response to the sharp drop in commodity prices will lead to a further shift in the investment mix of DONG Energy towards renewables," said CEO of DONG Energy Henrik Poulsen.

He added that towards 2020 the company expects offshore wind and bioenergy to account for more than 80 percent of investments.

Dong Energy inaugurated two new wind farms in the UK and Germany in 2015. Besides, it on Wednesday announced the decision to build the record breaking offshore wind farm Hornsea 1 in the UK, which is the largest investment in DONG Energy's history to date.

In 2016, DONG Energy expects EBITDA of 20 to 23 billion kroner.

Gross investments are also expected to total 20 to 23 billion kroner, it added.

Headquartered in Denmark, DONG Energy produces, procures, trades and distributes energy throughout Northern Europe. (1 U.S. Dollar = 6.6 Danish kroner) Enditem