Dong Energy overcomes oil and gas woes to post 70% profit rise

Energy news
Dong Energy news

First half profits went up at Dong Energy (CPH: DENERG) as the Danish group’s thriving offshore wind business offset a drop in revenues from oil and gas.

Dong Energy’s income from oil and gas fell by £20million to £280million, a slump which would have been worse had production not started up from the Laggan-Tormore gas project west of Shetland in February.

Dong, which developed the field in partnership with French company Total as operator and SSE, said it had made headway in reducing costs and adapting its oil and gas business to a low oil and gas price market, despite the drop.

Last month the company sold more than £50million worth of its Norwegian oil and gas assets to Faroe Petroleum.

Dong’s wind power division brought in £585million during the six months, up 68% year-on-year.

Group revenues fell 7% to £3.95billion, though pre-tax profits shot up to £990million from £570million.

During the period under review, Dong made a final investment decision to build the Borkum Riffgrund 2 wind offshore Germany and won the tender for the Dutch Borssele 1 and 2 developments.

Both projects should be completed within the next four years.

Dong operates six offshore wind farms in the UK, at Barrow, Burbo Bank, Walney 1 + 2, Gunfleet Sands, West of Duddon Sands and Westermost Rough.

Dong president and chief executive Henrik Poulsen said he did not expect the UK’s Brexit vote to result in any fundamental changes to the country’s offshore wind sector.

He described the firm’s interim results as “very satisfactory”.