Write-down affects Verdo’s financial results
2020 was an extraordinary year for Verdo due to the write-down of the district heating network and the combined heat and power plant in Randers.
Press release, May 2021
2020 was an extraordinary year for Verdo due to the write-down of the district heating network and the combined heat and power plant in Randers.
Verdo continues to have the financial strength to invest in sustainable solutions.
The revenue was DKK 2.4 billion (2018: DKK 2.6bn), the operating profit (EBITDA) was DKK 83 million (2018: DKK 99m) and the result after tax was DKK -408 million (2018: DKK 268m). This result is deemed unsatisfactory.
Especially one exceptional circumstance affected the result for the year. As already stated in November 2020, Verdo has written down the value of the district heating network and the combined heat and power plant in Randers in Verdo Varme A/S and Verdo Produktion A/S respectively, by DKK 307 million. The write-down has a negative effect on the result for the year of DKK 217 million, as the group had already set aside DKK 90 million in the previous financial year.
Without these special items, the revenue generated over the year would have been DKK 2.3 billion and the operating profit (EBITDA) DKK -140 million.
In addition, the mild winter in 2019/20 and COVID-19 affected earnings in the group's heat-related businesses such as fuel trading and the development and establishment of energy plants, and the result for the commercial area was therefore lower than expected. In addition, during the year there has been an internal focus on adapting the group to future challenges.
"In 2020, we have made a major effort to close open cases with the authorities and to strengthen the dialogue with customers and partners," says CEO of Verdo, Jakob Flyvbjerg Christensen:
"Verdo remains a solid company with good liquidity, and in the coming years we will invest further in sustainable critical infrastructure."
New strategy
In 2020, Verdo has adopted a new strategy, which will define four major tasks for the Group in the coming years: to create a solid foundation for operating both commercial and regulated business, to create an efficient, value-adding group, to build profitable commercial companies as well as to live out the group's social contract, i.e. to ensure development and cohesion in the local areas where Verdo is present.
The goal is to play an even greater socially relevant role for the local area and to make a sustainable impression.
Regulatory companies united
At the beginning of 2021, Verdo changed the organization so that there is a clearer separation between the regulatory and the commercial companies, which means that the group's regulatory companies are united in one division.
Verdo has also expanded the Executive Board to two people, with CFO Kenneth Jeppesen joining the Executive Board with reference to CEO Jakob Flyvbjerg Christensen.
Despite the extraordinary conditions, the management views 2021 positively and expects a significantly better result than in 2020.