Cost Cutting to See Dong Energy Shed Jobs

Danish energy producer Dong is to restructure, with the loss of hundreds of jobs.

Denmark’s largest energy company, it produces North Sea oil and gas, and has a large renewables programme.

Dong, which is controlled by the state, announced results Thursday, and a swingeing efficiency programme. The company aims to cut costs by DKK 1 billion (€746 million) annually, starting immediately. As a result between 500-600 jobs will go.

CEO Henrik Poulsen admitted the results in the first three quarters of the year were “unsatisfactory”. The EBITDA [earnings before interest, taxes, depreciation and amortization] outlook is down. “This is due, in particular, to a European gas market marred by 
oversupply and low margins,” Mr Poulsen said in a statement, “partly because low CO2 and coal prices make the 
coal-fired power stations more competitive than the gas-fired power stations."

The net loss for the three months to the end of September was DKK3.67 bn (€491 million), against a profit of DKK1.3 billion a year ago. Revenues increased, but costs soared and depreciation doubled in the period.

Earlier this week Dong spokesmen supported the European Union’s strategy for cleaner energy markets. According to newsagencies, the company’s vice-president for energy markets, Jan Ingwersen, said the EU should move to fill the post 2020 “policy gap”. He said incentives for gas should accompany such measures for renewables.