News from DDH

DDH returned a profit of DKK 41.6 million on ordinary activities before non-recurrent expenses.

In 2010 DDH realised a profit on ordinary activities of DKK 41.6 million, which is a figure similar to that in 2009.

Extraordinary losses in the building construction consulting section in Orbicon A/S and the negative outcome of legal action for damages from an earlier dispute mean that in 2010 DDH realised a loss of DKK 27.4 million before tax and minority interests, against a profit of DKK 26.2 million in 2009.

In spite of the losses realised, the Executive Committee does not consider the loss for the year to have any bearing on the company’s future activities and opportunities. DDH has retained its solid position with equity of more than DKK 760 million and a solvency ratio of 52.9%. The continued dynamic development of the company through acquisitions and organic growth remains the strategic aim, said Chairman of the Executive Committee, Frants Bernstorff-Gyldensteen, at DDH’s annual meeting in Horsens on 2nd May.

The chairman also pointed out that the current decision-making vacuum – typified by the yet to be finalised realisation of the Danish government’s “Green Growth” plan – means that necessary investments in the development of several of DDH’s markets are currently in stalemate. Thus Green Growth has to date had a delaying effect, rather than the expected beneficial impact.

The company’s commercial activities within nature, environment and energy come under the auspices of Dalgasgroup A/S, which is owned 100% by DDH. Dalgasgroup A/S has 100% ownership of HedeDanmark a/s, Orbicon A/S, Enricom A/S and Hedeselskabet Sp. z o.o., as well as 50% of Xergi A/S.

Dalgasgroup A/S is also responsible for DDH’s other capital interests and investments in companies, forests and rural properties.

HedeDanmark a/s achieved a profit before tax of DKK 39.1 million in 2010, which is the best result since its establishment as an independent subsidiary in 2004.
HedeDanmark has experienced major growth within Outdoor Facility Service (green service), processing of organic waste and supply of woodchips. Furthermore, the trade of raw wood has seen its highest levels of activity and the highest sales prices since the onset of the economic crisis in 2008.

Orbicon A/S realised a loss of DKK 33.2 million before tax in 2010. The result was heavily affected by the negative development within building construction, which was created as a key activity following the purchase of the shares in Leif Hansen Engineering A/S in 2009. The consultancy area of Building Construction has undergone complete restructuring in organisational, technical and financial terms. In this light, the overall result is negatively affected by DKK 45 million before tax, of which DKK 22 million comes from extraordinary amortisation of goodwill and DKK 8 million from restructuring costs.
On the basis of the above, the Management deems the adaptation activities carried out to be appropriate, but finds the result for Building Construction consultancy not satisfactory. Orbicon’s other business areas, Environment and Municipal Engineering, achieved their budgeted targets.

Enricom A/S is responsible for DDH’s activities in Poland. In addition, Enricom manages the company’s investments in forest and rural properties outside Denmark.
In Poland, Hedeselskabet Sp. z o.o. owns and operates three renewable energy plants based on the degasification of landfill sites. The company realised a profit of DKK 7.8 million before tax. The result is regarded as satisfactory.
In terms of foreign forest investment, the subsidiary in Latvia owns 2,171 ha of forest and rural properties.

Xergi A/S is a supplier of technology to biogas plants. The year’s result before tax was a loss of DKK 11.1 million in 2010. DDH’s share of the result represents a loss of DKK 5.6 million before tax.
In 2010 the company completed its first biogas plant in the UK, in addition to commencing the construction of a large biogas plant in Scotland. The combination of both projects and a number of minor orders has to a certain extent compensated for the lack of activity in the Danish market.

Economic and strategic development
At the annual meeting, Managing Director and CEO, Ove Kloch, outlined the economic and strategic development for the company:

• As a result of the restructuring carried out and DDH’s economic and strategic basis, the company is in a strong position to ensure continued growth.
• The company’s green business areas and extensive knowledge within environment and energy represent an area of international growth potential.
• Through the awarding of funds from the association, DDH will once again commission a number of activities and projects that fulfil the provisions of the company’s objects clause in 2011.
• DDH will focus on bioenergy through a number of development projects.
• The subsidiaries’ business activities are affected by political framework conditions. Denmark is currently seeing heavy focus on public expenditure and a somewhat hesitant realisation of the Danish government’s “Green Growth” plan.

DDH expects to post pre-tax profits just shy of DKK 30 million in 2011.

For further information, please contact Managing Director and CEO, Ove Kloch, DDH/Dalgasgroup A/S, tel. +45 87 28 10 11, mobile +45 21 20 65 61.