The annual earnings of energy trader Danske Commodities have fallen by 48%

Danish energy trader Danske Commodities announced a 48% decline in profits for the year 2024, mainly due to volatility in gas prices. This was partly caused by EU regulations to fill storage 90 percent before winter and the stoppage of Russian transit gas via Ukraine.

Danske Commodities (owned by Norwegian oil producer Equinor) reported a full-year adjusted profit before tax of 186 millions euros ($204million), down from 359 millions euros in 2023.

The company's earnings are expected to be between 100 and 200 millions euros in 2025 before taxes.

Oestergaard Kristiansen, CEO of Oestergaard Kristiansen, said that the gas prices were moved up or down on the basis of political statements and not fundamentals.

She was referring the discussions surrounding the bloc's targets for filling gas storage tanks. The latest proposals argue that they can deviate up to 10 percentage points.

Analysts claim that the storage rules, introduced in 2022 as a way to provide EU countries with a buffer during winter months after Russia stopped supplying fuel following its invasion of Ukraine, can distort signals on the market needed for making commercial decisions.

Kristiansen stated that when prices are influenced by factors which are hard to predict, such as political interference, then it is more difficult to manage our assets, and to ensure an efficient usage of our energy resources. This also leads to a reduction in storage flexibility.

The company also reported that the renewables market saw a surge in solar and wind energy generation, which led to negative prices within a few hours.

Danske Commodities has grown its portfolio of flexible, wind and solar assets by 20 percent per year. This will bring the total to more than 14 gigawatts in 2024.

(source: Reuters)