Sund & Bælt: Annual Results

Sund & Bælt exited 2016 with a profit that is approximately DKK 180 million above the outlook for the year. A 4.4% increase in traffic across Storebælt and continuing low interest expenses had a positive impact on the result, while extraordinary write-downs in the second half of the year and reduced revenue from the railway had a negative impact on the result.

Operating profit for the year totalled DKK 1,999 million, which is a fall of DKK 471 million compared to 2015. This is due to extraordinary provision for the loss in value of Sprogø Wind Farm and the administration building at the Port of Ebeltoft of DKK 307 million. 2016 was the first full year for A/S Øresund to have responsibility for maintenance and reinvestments on the Øresund line, where focus has been trained on restoring punctuality on the section and on creating a better long-term balance between quality and economy. Rail revenues fell during the period under review by DKK 280 million due to a reduction in Banedanmark’s rail fees for using the railway across Storebælt and the Øresund line.

Total road traffic on the Storebælt fixed link delivered a revenue of DKK 3,069 million for Sund & Bælt, which was DKK 165 million higher than in 2015. Passenger traffic increased by 4.4%, while lorry traffic increased by 4.3%. An average of 34,000 vehicles crossed Storbælt per day.

”Traffic on Storebælt set a number of records during the summer and for 2016 as a whole. This meant that despite the extraordinary impairment and the reduction in the rail revenue, we have been able to deliver a result that is above expectations following the impairment in the third quarter. The result also enables us to pay off DKK 1.2 billion on A/S Storebælt’s debt, which is highly satisfactory,” says Mikkel Hemmingsen, Sund & Bælt’s CEO.

The Group’s interest expenses were DKK 48 million lower compared to 2015, which is largely due to a lower interest rate level and lower debt.

The result before fair value adjustment and tax, but including the share from Øresundsbro Konsortiet, was a profit of DKK 1,798 million for the period, which is DKK 360 million lower than in 2015.

Value adjustments, including the share from Øresundsbro Konsortiet, have impacted the result negatively by DKK 617 million against an income of DKK 1,032 million in 2015. The Group’s result after tax was a profit of DKK 933 million.

”In the years ahead, our business will be affected by a rising level of reinvestments due to the age of our facilities. It is crucial, therefore, that we continue our focus on making our facilities efficient and this will also be reflected in our work on a new business strategy,” adds Mikkel Hemmingsen.

As regards A/S Storebælt, the results mean that the company will pay off DKK 1.2 billion of its interest-bearing net debt which, at the end of 2016, totalled DKK 21.3 billion. The repayment period is reduced by one year compared to 2015 and amounts to 30 years. The debt are expected to be paid in 2028.

Sund & Bælt expects to be able to pay an extraordinary dividend to the Danish State of DKK 1.2 billion based on the dividend distribution from A/S Storebælt. After this, Sund & Bælt will have paid a total of DKK 4.2 billion in dividend to the State.

The outlook for the Group’s results for 2017 is for a modest increase in growth and a moderate rise in inflation. In the light of – and based on – the development in traffic in 2016, traffic is expected to see positive development. The result before financial value adjustments and tax is expected to be a profit of around DKK 1,800 – 1,950 million.


*The Sund & Bælt Group’s financial statements include the results for the 100% owned subsidiaries, A/S Storebælt, A/S Øresund, A/S Femern Landanlæg, Femern A/S, Sund & Bælt Partner A/S and BroBizz A/S and for the Danish half of Øresundsbro Konsortiet, which is responsible for the operation of the Øresund Bridge.

**) The fair value adjustment is an accounting principle that in financial reporting sets out changes in the value of financial assets and liabilities at their market value. That is, the value they have in the market at any given time if they were to be traded. The fair value adjustment has no impact on the company’s ability to repay its debt.

***) The profit share from Øresundsbro Konsortiet IS includes an expense of DKK 105 million relating to value adjustments. Profit before value adjustments amounts to DKK 1,020 million. In total, the result before value adjustments and tax for the Group, including Øresundsbro Konsortiet, is a profit of DKK 1,798 million.

Annual report 2016