CVR-no. 28 11 39 51
Annual Report for 2023
The Annual Report is adopted and
approved on the ordinary Annual General
Meeting on 17/04 2024.
Chairperson
Annual Report
2023
TABLE OF CONTENTS
Management’s review
Executive review ................................................................................................................................................................................................... 2
Financial highlights and ratios ........................................................................................................................................................................ 3
Statutory reporting on corporate governance .............................................................................................................................................. 5
Risk management ............................................................................................................................................................................................... 10
Management’s statement on the annual report ......................................................................................................................................... 12
Independent auditor’s report .......................................................................................................................................................................... 13
Financial statements
Statement of comprehensive income ............................................................................................................................................................ 15
Balance sheet ...................................................................................................................................................................................................... 16
Statement of changes in equity ...................................................................................................................................................................... 18
Statement of cash flows .................................................................................................................................................................................. 20
Notes to financial statements
Basis of reporting ............................................................................................................................................................................................... 21
Earnings ................................................................................................................................................................................................................ 23
Risk management ............................................................................................................................................................................................... 24
Other financial notes ........................................................................................................................................................................................ 32
Working capital .................................................................................................................................................................................................. 35
Capital employed .............................................................................................................................................................................................. 42
Tax .......................................................................................................................................................................................................................... 47
Other notes........................................................................................................................................................................................................... 48
Annual Report 2023 EXECUTIVE REVIEW 2
EXECUTIVE REVIEW
STRONG RESULTS AS MARKETS NORMALISE
In 2023, Danske Commodities delivered strong results in
normalised energy markets, while growing its asset
portfolio and increasing its global market presence.
Following a turbulent 2022 dominated by the energy
supply crisis in Europe, energy prices and volatility
moved closer to pre-crisis levels in 2023. This normali-
sation was mainly driven by lower energy demand, high
gas storage levels and a mild European winter. Through-
out the year, price and volatility levels continued to de-
cline.
Under these market conditions, Danske Commodities de-
livered an adjusted EBT of EUR 359 million (IFRS EUR 453
million) and adjusted gross profit of EUR 308 million
(IFRS EUR 410 million), which is within the expectations
of EUR 200-600 million in EBT and EUR 300-700 million in
gross profit.
The delivered results underline that Danske Commodi-
ties has built a stronger and broader business in recent
years. During these years, the Group has increased its
global market presence and its portfolio of renewables
and flexible assets, and this growth continued in 2023.
RESTATEMENT OF PRIOR YEAR NUMBERS
The IFRS results are impacted by a restatement effect of
the 2022 results as explained in note 1.1.
The Group has previously assessed that gas flow capa-
cities could be net settled and the gas flow capacities
were accounted for at fair value. Going forward, gas
flow capacities are accounted for as executory con-
tracts. Comparative numbers for 2022 have been re-
stated accordingly. Adjusted EBT remain unaffected.
RAMPING UP ON RENEWABLES AND FLEXIBLE ASSETS
In 2023, Danske Commodities grew its portfolio of re-
newables and flexible assets under contract by 20%,
from 10 GW in 2022 to 12 GW.
The energy supply crisis in 2022 made it evident that Eu-
rope must reduce its dependence on imported natural
gas and prioritise investments in renewable energy pro-
duction and flexibility to meet future energy demands.
With that in mind, Danske Commodities’ increased com-
mitments to wind and solar assets as well as signing its
first battery storage asset in the UK were among some
of the highlights of the year. With the onboarding of the
UK battery storage asset, the Group’s portfolio of flexi-
ble assets has now reached a size of 1.7 GW across Den-
mark, Sweden, Norway and the UK.
It was also a year when Danske Commodities’ collabo-
ration with its parent company Equinor once again re-
sulted in concrete and measurable progress within the
renewables space. Danske Commodities will risk man-
age the 800 MW asset portfolio from leading Brazilian
renewables developer Rio Energy, and the power pro-
duced by Polish onshore wind farm Wilko, both acquired
by Equinor in 2023.
To support its growing asset portfolio, Danske Commod-
ities invested in weather analysis infrastructure, algo-
rithmic trading setup, flexibility in power production,
the implementation of a new deal capture system in its
gas business and, not least, its people.
During the year, Danske Commodities grew the organi-
sation by 72 FTEs – an increase of 19% –and the Group
expects this growth to continue in the coming years.
EXPANDING THE GLOBAL FOOTPRINT
Danske Commodities has unlocked new opportunities
for its business model as a result of increasing market
liberalisation and green ambitions around the world. In
2023, the Group took another important step in its
global journey as it completed its first trades in the Bra-
zilian power market from its newly established office in
São Paulo.
2023 was also the year when Danske Commodities pre-
pared the company to enter the Japanese power market.
This market entry was completed in January 2024 from
Danske Commodities’ trading desk in Singapore.
With these market entries, Danske Commodities now has
activities on five continents, truly underlining its posi-
tion as a global energy trading company.
OUTLOOK: READY TO HANDLE THE COMPLEXITY OF TO-
MORROW
The market stabilisation in 2023 led to declining energy
prices and decreasing market volatility throughout the
year. The downward trend in prices and volatility is ex-
pected to continue even further in 2024. Navigating a
new normal for energy markets that is still being de-
fined, the Group expects gross profit to be in the range
of EUR 200-400 million and EBT to be in the range of EUR
150-350 million in 2024.
Looking further ahead, the Group expects the energy
landscape to grow greener, but also more complex, with
the build-out of renewable energy sources and the intro-
duction of new flexible technologies such as batteries
and power-to-X. The need for companies like Danske
Commodities to optimise energy markets and bring bal-
ance on a global scale will only increase in the coming
years. With the growth of the asset portfolio, global ex-
pansion and continuous investments in our trading and
technological setup, Danske Commodities is well-posi-
tioned to do our part in the energy transition.
THE GROUP’S MAIN ACTIVITY
Annual Report 2023 FINANCIAL HIGHLIGHTS 3
FINANCIAL HIGHLIGHTS AND RATIOS
ADJUSTED PERFORMANCE MEASURES
EUR '000 2023 2022 2021 2020 2019
Gross turnover 40.459.738 67.014.434 32.311.321 11.844.042 10.046.074
Adjusted gross profit 307.636 2.405.560 325.472 96.292 101.265
Adjusted EBT 359.077 2.226.558 248.849 41.363 45.267
Adjusted equity 2.784.998 5.751.868 514.299 320.112 288.222
Ratios in %
Adjusted scalability 74,3% 95,8% 78,6% 46,0% 46,2%
Adjusted return on capital employed 6,4% 68,0% 42,3% 20,6% 36,2%
Further explanation of adjusted performance measures is outlined on page 4.
GROUP FIGURES
EUR '000 2023 2022* 2021 2020 2019
Income statement
Trading income and revenue from contracts with
customers
3.070.581 6.555.371 2.451.083 791.683 791.474
Gross profit 410.103 2.178.526 475.666 126.402 110.178
Profit before financial income
322.767 2.068.955 394.127 54.312 52.559
Net financials 130.432 -77.775 -6.922 -2.959 -1.538
Profit before tax (EBT) 453.199 1.991.180 387.205 51.353 51.021
Profit for the year 357.120 1.555.794 302.909 40.207 39.786
Balance sheet
Balance sheet total 4.360.737 14.843.202 7.488.231 1.231.814 770.564
Equity 2.795.018 5.688.472 634.498 332.393 292.711
Cash flow statement
Cash flow from operating activities 3.568.964 -2.222.907 -198.975 143.031 -75.812
Cash flow from investing activities -61.189 -6.203 -3.332 -20.928 -91.899
- hereof investments in intangible assets -4.598 -3.078 -2.513 -21.725 -93.656
- hereof investments in property, plant and
equipment
-2.590 -3.125 -819 -915 -1.025
Free cash flow 3.507.775 -2.229.110 -202.307 122.103 -167.711
Cash flow from financing activities -4.758.087 2.294.669 1.404.048 -1.050 178.471
Change in cash and cash equivalents for the year -1.253.850 39.836 1.204.523 119.397 10.760
Cash and cash equivalents 170.651 1.424.501 1.384.665 180.142 60.745
Ratios in %
Scalability 78,7% 95,0% 82,9% 43,0% 47,7%
Return on capital employed 9,2% 60,6% 58,7% 24,3% 39,9%
Equity ratio 64,1% 38,3% 8,5% 27,0% 38,0%
Return on equity 8,4% 49,2% 62,7% 12,9% 21,6%
Average number of employees 446 374 338 319 281
Number of employees end of year 487 412 370 355 317
The ratios have been prepared in accordance with the definitions set out in note 8.5 in the financial statements.
* 2022 has been restated due to a change in the accounting treatment of gas flow capacities. Refer to note 1.1 for
further information.
Annual Report 2023 FINANCIAL HIGHLIGHTS 4
ADJUSTED PERFORMANCE MEASURES
Gross turnover, adjusted gross profit and adjusted EBT
are used as alternatives to the financial figures pre-
pared in accordance with IFRS (as defined in note 8.5).
These adjusted performance measures are used as the
primary performance measure internally in Danske Com-
modities based on the assessment that adjusted perfor-
mance measures better reflect the business perfor-
mance.
GROSS TURNOVER
Revenue from trading activities is presented net under
IFRS. To provide readers of the financial statements
with an insight into Danske Commodities’ gross trading
and revenue activities, a gross turnover presentation is
included as a part of the adjusted performance
measures. Gross turnover reflects sales contracts for
physical delivery of non-financial items consisting of
power, gas and certificates, whether or not it is consi-
dered to be a part of trading activities. The gross turn-
over amounts to EUR 40,460 million in 2023 compared to
the IFRS trading income and revenue from contracts
with customers of EUR 3,071 million.
The calculation of the adjusted gross profit and ad-
justed EBT is based on the corresponding IFRS figures.
These are adjusted for the three components, market
value of gas storages, market value of gas flow capaci-
ties and reclassification of amortisations.
MARKET VALUE OF GAS STORAGES
IFRS requires that trading inventories measured at fair
value use period-end spot prices. In the internal perfor-
mance measurement reporting Danske Commodities
measures gas storages at an approximated market
value. The market value of the gas storages is valuated
using a storage planning model with multiple inputs,
which are mainly related to storage capacity and physi-
cal restrictions from the underlying gas storage con-
tract, forward prices and gas volume in storage. The dif-
ference between the gas storage market value and the
IFRS gas inventory value is reflected in the adjustment
to IFRS gross profit and IFRS EBT.
MARKET VALUE OF GAS FLOW CAPACITIES
Gas flow capacities are considered a part of the trading
portfolio in Danske Commodities on the same terms as
gas forward trades. As Danske Commodities does not
have a practice of net settlement of the gas flow ca-
pacities, IFRS does not allow gas flow capacities to be
included in the fair value measurement. However, for
performance measures in Danske Commodities, gas
flow capacities are fair valued at their intrinsic value
like the gas forward trades that they can be utilised to-
gether with, which is reflected in the adjustment to IFRS
gross profit and IFRS EBT.
RECLASSIFICATION OF AMORTISATIONS
In 2019 and 2020, Danske Commodities entered into se-
veral PPAs and gas storage contracts which were al-
ready in operation and favourable, given current market
terms. These contracts were recognised as intangible
assets and amortised over the duration of each con-
tract. As the amortisations are considered an important
part of the performance of these contracts, the amorti-
sations are reclassified from the financial statement
line item ‘depreciation and amortisation’ to ‘gross
profit’.
As shown in the tables, IFRS gross profit amounted to
EUR 410 million in 2023 and is adjusted upward by EUR
100 million in relation to gas flow capacities and down-
ward by EUR 202 million in relation to gas storages and
reclassification of amortisations, bringing the adjusted
gross profit to EUR 308 million.
IFRS EBT is EUR 453 million and adjusted by the EUR 100
million flow capacities upward adjustment and EUR 194
million gas storage downward adjustment, the adjusted
EBT is EUR 359 million.
Adjusted equity is IFRS equity adjusted for the accumu-
lated after tax income statement effect of the gas flow
capacity and gas storage adjustment specified in the
table above. With IFRS equity of EUR 2,795 million in
2023, an accumulated gas flow capacity and gas stor-
age adjustment of EUR 13 million minus 22% tax, the ad-
justment amounts to EUR 10 million and an adjusted eq-
uity of EUR 2,785 million.
IFRS VS. ADJUSTED PERFORMANCE MEASURES
2023
EURm IFRS
Reclas-
sification
Gas
storage
Gas flow
capacities
Adjusted
Gross profit 410.1 -8.3 -194.1 100.0 307.7
Other operating
income
0.1 0.1
External expenses -13.0 -13.0
Staff costs -62.4 -62.4
Amortisations -12.0 8.3 -3.7
EBIT 322.8 0.0 -194.1 100.0 228.7
Net financials 130.4 130.4
EBT 453.2 0.0 -194.1 100.0 359.1
2022
EURm IFRS*
Reclas-
sification
Gas
storage
Gas flow
capacities*
Adjusted
Gross profit 2,178.5 -8.3 349.0 -113.5 2,405.7
Other operating
income
1.5 1.5
External expenses -23.1 -23.1
Staff costs -74.5 -74.5
Amortisations -13.5 8.3 -5.2
EBIT 2,068.9 0.0 349.0 -113.5 2,304.4
Net financials -77.8 -77.8
EBT 1,991.1 0.0 349.0 -113.5 2,226.6
* IFRS numbers has been restated. For description refer to note 1.1.
Annual Report 2023 STATUTORY REPORTING ON CORPORATE GOVERNANCE 5
Annual Report 2023 STATUTORY REPORTING ON CORPORATE GOVERNANCE 6
CORPORATE SOCIAL RESPONSIBILITY – CONTINUED
Annual Report 2023 STATUTORY REPORTING ON CORPORATE GOVERNANCE 7
CORPORATE SOCIAL RESPONSIBILITY – CONTINUED
Annual Report 2023 STATUTORY REPORTING ON CORPORATE GOVERNANCE 8
1
World Economic Forum. Global Gender Gap Report (2022).
Annual Report 2023 STATUTORY REPORTING ON CORPORATE GOVERNANCE 9
Annual Report 2023 RISK MANAGEMENT 10
RISK MANAGEMENT
MARKET RISK
Market risk is the risk of the value of open positions
changing as a result of fluctuating market conditions.
Danske Commodities’ market risk arises in both com-
modity and financial markets with fluctuating energy
prices, production and consumption balancing and for-
eign exchange rates constituting key risk factors. Due to
the potential impact on the Group’s earnings, Danske
Commodities continuously monitors and stress tests
volatility and commodity price developments.
Market risk is managed as set out in the Market Risk Po-
licy and the Market Risk Manual. The Market Risk Policy
defines the allowable products, regions and commodi-
ties whereas the Market Risk Manual provides the spe-
cific mandates within the overall market risk appetite.
The market risk appetite of Danske Commodities sets
out the overall risk limits defined as the allocated risk
capital, and the aggregation of the different mandates
is kept within those limits, ensuring that the Group mo-
nitors its risk profile at all times. Open positions are
only accepted if mandates have been established. All
open trading positions are monitored by a second line
of defence by the Risk Management team.
All mandates across the business are reviewed regularly
and updated to ensure that they continue to comply
with the overall risk appetite and are in sync with
changing market conditions. As part of the monitoring
process, Danske Commodities operates several warning
levels and stop-loss limits to ensure timely action if a
mandate is violated. Structured product control, model
validations and additional stress tests and risk
measures, are used as an integral part of risk manage-
ment for relevant products and activities.
Foreign exchange risk, to which the daily commercial
business is exposed, is mitigated and hedged on a daily
basis. As foreign exchange risk is not a core business for
Danske Commodities, a hedging strategy anchored in
the Treasury team is pursued to mitigate the foreign ex-
change risk. Hence, currency risk is an insignificant
component of the overall risk appetite at Danske Com-
modities.
CREDIT RISK
Credit risk is the risk of financial loss resulting from a
counterparty failing to meet contractual obligations.
Danske Commodities manages credit risk through a
clearly defined framework of policies and procedures
approved by the Board of Directors and defined by the
Risk Management team.
The financial strength and creditworthiness of a poten-
tial counterparty is assessed before the Group enters
any contract and subsequently the allowed credit line is
monitored daily. If required, security is requested before
or during the contract lifespan.
Thorough Know Your Customer (KYC) and sanctions
screening processes are performed according to the
agreed policy. The KYC process is reviewed regularly,
and sanctions screening is done on a continual basis.
OPERATIONAL AND IT RISK
Danske Commodities is exposed to operational and IT
risks with possible impact on license to operate, finan-
cial losses or near misses. Operational and IT risks can
broadly be defined as risks of inadequate or failed inter-
nal processes, human errors, system failures or from ex-
ternal events.
Danske Commodities continues to mature and improve
operational and IT risk management to make it an inte-
gral part of the Company’s efforts to reduce the overall
risk exposure.
All employees have read and understood Danske Com-
modities’ fair use policy and cybersecurity training is
mandatory for all employees and IT risk controls are
further strengthened through an external 24/7 Security
Operations Centre which includes an incident response
retainer. The Danish Energy Agency evaluates Danske
Commodities’ crisis management business continuity
planning and obligations as a balancing responsible
party in the energy market and audits Danske Commodi-
ties on a planned frequency. In addition, Danske Com-
modities complies with SOX and SWIFT compliance re-
quirements.
Crisis management and business continuity processes,
procedures and tooling are updated and exercised on a
monthly and biannual basis.
LIQUIDITY RISK
Liquidity risk is the risk of Danske Commodities not be-
ing able to meet its liabilities towards counterparties.
Danske Commodities is considered to have low liquidity
risk, being under the ownership of Equinor and given its
solid capital structure. Cash flows from operations,
cash reserves, capital injections and credit facilities
are key aspects that for several years have ensured sta-
ble and adequate liquidity.
Danske Commodities measures its overall liquidity, con-
sisting of free liquidity, including cash collateral, other
deposits and forecasted cash flows, on a daily basis. In
addition, different liquidity outcomes are simulated
through various stress tests. The stress testing process
analyses daily and monthly forecasted liquidity against
a minimum liquidity level, enabling the Group to better
manage liquidity reserves and withstand market move-
ments at all times.
Annual Report 2023 RISK MANAGEMENT 11
RISK MANAGEMENT – CONTINUED
LEGAL RISK
Contractual relationships with counterparties and busi-
ness partners bear the potential for legal risks.
Danske Commodities’ Legal team is focused on proac-
tive legal work and contributes in a structured way to
identifying, prioritising and managing legal risks and
opportunities in consultation with teams across the en-
tire organisation.
In 2022, a cross functional Market Design Working group
was established to follow the market situation closely
as this was highly affected by the energy crisis and the
geopolitical situation. This group will continue on a
case-by-case to support the business on new legisla-
tion.
The Legal team engages in the ongoing business activi-
ties and decision-making processes at an early stage
and takes part in the approval process for new products.
By drafting and negotiating well-balanced contracts in
accordance with the legal risk tolerance defined by the
Board of Directors in line with local legislation and
practice in the markets in which Danske Commodities
operates, the Group conducts risk assessment on an on-
going basis. As such, the overall level of claims and dis-
putes can be held at a minimum. The legal counsels of
Danske Commodities work closely with professional ex-
ternal advisers when expert knowledge is required.
COMPLIANCE RISK
Compliance risk is the risk posed to Danske Commodi-
ties’ financial, organisational, operational or reputa-
tional standing that could result from a failure to act in
accordance with relevant laws, regulations and pre-
scribed standards.
High ethical standards and compliance with relevant
laws and regulations are fundamental to Danske Com-
modities. Danske Commodities’ Compliance Programme
sets out the framework for operating the Company’s ac-
tivities in an ethical and compliant manner and ensures
that compliance is embedded with all employees and
throughout the organisation, creating a strong culture
of compliance.
The Compliance Programme focuses on preventing, de-
tecting and handling non-compliant behaviour and is
managed by the Compliance Officer who regularly re-
ports to Senior Leadership and the Risk Committee.
Danske Commodities’ Compliance Policy & Guidelines
and Code of Conduct are the foundation for the Compli-
ance Programme as they lay out the requirements and
expectations of the Company’s employees and they ap-
ply to all employees. Annual compliance risk assess-
ments are another important part of the Compliance
Programme.
Training and education also play a vital role in the
Compliance Programme, ensuring that Danske Commo-
dities’ employees are regularly provided with up-to-date
information and knowledge of compliance issues. Fur-
ther, relevant employees also take part in face-to-face
training sessions conducted by the Compliance team. In
2023, these training sessions related to the market
abuse prohibitions that apply to many of the jurisdic-
tions that Danske Commodities operates in.
Monitoring and trade surveillance are also an important
part of the Compliance Programme and ensure compli-
ance with relevant regulations and allow Danske Com-
modities to monitor that its activities are carried out in
a compliant manner.
Oversight with the Compliance Programme is ensured
through the preparation of an annual compliance report
as well as regular reports to Senior Leadership and the
Risk Committee.
Annual Report 2023 MANAGEMENT’S STATEMENT 12
MANAGEMENT’S STATEMENT ON THE ANNUAL REPORT
Executive Board
Board of Directors
Annual Report 2023 INDEPENDENT AUDITOR’S REPORT 13
INDEPENDENT AUDITOR’S REPORT
Annual Report 2023 INDEPENDENT AUDITOR’S REPORT 14
INDEPENDENT AUDITOR’S REPORT – CONTINUED
CVR no. 30 70 02 2 8
Annual Report 2023 STATEMENT OF COMPREHENSIVE INCOME 15
STATEMENT OF COMPREHENSIVE INCOME
1 JANUARY – 31 DECEMBER
INCOME STATEMENT
Group Parent
EUR '000 Note 2023 2022 2023 2022
Trading income and revenue from contracts with
customers
2.1 3,070,581 6,555,371 3,046,453 6,476,484
Cost of sales 2.1 -2,660,478 -4,376,845 -2,660,358 -4,376,825
Gross profit 410,103 2,178,526 386,095 2,099,659
Other operating income 146 1,468 145 1,468
Other external expenses 4.1 -13,064 -23,058 -13,086 -23,344
Staff costs 4.1 -62,404 -74,483 -57,607 -72,020
6.1, 6.2 -12,014 -13,498 -11,925 -13,490
Operating profit (EBIT) 322,767 2,068,955 303,622 1,992,273
Share of profit in subsidiaries after tax 6.4 0 0 16,885 62,484
Financial income 4.3 184,513 9,733 181,215 9,550
Financial expenses 4.3 -54,081 -87,508 -53,457 -87,455
Profit before tax (EBT) 453,199 1,991,180 448,265 1,976,852
Tax on profit for the year 7.1 -96,079 -435,386 -91,145 -421,058
Profit for the year 357,120 1,555,794 357,120 1,555,794
STATEMENT OF OTHER COMPREHENSIVE INCOME
Group Parent
EUR '000 2023 2022 2023 2022
Profit for the year 357,120 1,555,794 357,120 1,555,794
Items that may subsequently be reclassified to the income statement:
Exchange rate adjustment on translation of foreign operations -573 -1,820 -573 -1,820
Other comprehensive income (net of tax) -573 -1,820 -573 -1,820
Total comprehensive income (net of tax) 356,547 1,553,974 356,547 1,553,974
Amortisation, depreciation and impairment losses
of intangible assets and property, plant and equipment
Annual Report 2023 BALANCE SHEET 16
BALANCE SHEET
AT 31 DECEMBER
ASSETS
Group Parent
EUR '000 Note 2023 2022 2023 2022
Contractual rights 58,254 66,597 58,254 66,597
Software 11,622 8,358 11,622 8,358
Intangible assets 6.1 69,876 74,955 69,876 74,955
Land and buildings 2,996 2,690 1,614 2,690
Other fixtures and fittings, tools and equipment 3,626 3,825 3,500 3,800
Leasehold improvements 199 71 7 50
Property, plant and equipment 6.2 6,821 6,586 5,121 6,540
Investments in subsidiaries 6.4 0 0 130,406 81,889
Deferred tax 7.2 14,376 14,935 14,376 13,925
Deposits 424 421 419 417
Other non-current assets 14,800 15,356 145,201 96,231
Non-current assets 91,497 96,897 220,198 177,726
Inventories 5.1 766,711 1,914,475 766,711 1,914,475
Trade receivables 5.2 693,361 1,369,480 690,087 1,360,478
Other receivables 5.3 45,407 76,502 34,503 62,232
Deposits related to trading 5.5 46,288 460,853 45,081 458,317
Receivables from group enterprises 4.2 1,532,700 4,093,498 1,550,581 4,137,218
Corporation tax receivables 7.2 1,730 26,991 0 26,832
Prepayments 8,348 30,607 5,346 25,607
Derivative financial instruments 3.5 950,043 5,349,398 945,836 5,346,433
Current asset investments 6.5 54,001 0 0 0
Cash and cash equivalents 170,651 1,424,501 94,560 1,386,648
Current assets 4,269,240 14,746,305 4,132,705 14,718,240
Assets 4,360,737 14,843,202 4,352,903 14,895,966
Annual Report 2023 BALANCE SHEET 17
BALANCE SHEET
AT 31 DECEMBER
LIABILITIES AND EQUITY
Group Parent
EUR '000 Note 2023 2022 2023 2022
Share capital 175,000 3,679,762 175,000 3,679,762
Share premium 1,750,000 0 1,750,000 0
Reserve for currency translation -3,938 -3,365 0 0
Reserve for net revaluation under the equity method 0 0 58,738 72,608
Reserve for development costs 0 0 8,956 6,375
Proposed dividend 750,000 0 750,000 0
Retained earnings 123,956 2,012,075 52,324 1,929,727
Equity 2,795,018 5,688,472 2,795,018 5,688,472
Deferred tax liabilities 7.2 105 0 0 0
Provisions 5.6 293 620 293 620
Lease liabilites 6.3 2,058 1,810 676 1,810
Other payables 5.4 0 2,118 0 2,118
Non-current liabilities 2,456 4,548 969 4,548
Trade payables 411,813 1,449,030 409,121 1,443,538
Payables to group enterprises 4.2 217,743 3,829,830 226,436 3,900,512
Corporation tax payables 7.2 38,812 3,397 37,960 0
Provisions 5.6 1,628 6,763 1,628 6,763
Other payables 5.4 30,303 49,564 25,356 44,873
Deposits related to trading 5.5 294,660 655,110 294,660 655,110
Prepayments 4,508 34,926 1,672 34,926
Derivative financial instruments 3.5 562,465 3,120,354 558,845 3,116,016
Lease liabilities 6.3 1,331 1,208 1,238 1,208
Current liabilities 1,563,263 9,150,182 1,556,916 9,202,946
Liabilities 1,565,719 9,154,730 1,557,885 9,207,494
Liabilities and equity 4,360,737 14,843,202 4,352,903 14,895,966
Annual Report 2023 STATEMENT OF CHANGES IN EQUITY 18
STATEMENT OF CHANGES IN EQUITY
2023 Group
EUR '000 Share capital Share premium
Reserve for currency
translation
Proposed
dividend
Retained earnings
Total
Equity at 1 January 3,679,762 0 -3,365 0 1,923,487 5,599,884
Restatement effect in prior year 0 0 0 0 88,588 88,588
Restated equity at 1 Janaury 3,679,762 0 -3,365 0 2,012,075 5,688,472
Net profit for the year 0 0 0 0 357,120 357,120
Other comprehensive income for the year 0 0 -573 0 0 -573
Total comprehensive income for the year 0 0 -573 0 357,120 356,547
Capital decrease -3,679,762 0 0 0 0 -3,679,762
Capital increase 175,000 1,750,000 0 0 0 1,925,000
Proposed capital distribution 0 0 0 750,000 -750,000 0
Dividend paid 0 0 0 0 -1,495,239 -1,495,239
Equity at 31 December 175,000 1,750,000 -3,938 750,000 123,956 2,795,018
2022 Group
EUR '000 Share capital Share premium
Reserve for currency
translation
Proposed
dividend
Retained earnings
Total
Equity at 1 January 179,065 0 -1,545 0 456,978 634,498
Net profit for the year as restated 0 0 0 0 1,555,794 1,555,794
Other comprehensive income for the year 0 0 -1,820 0 0 -1,820
Total comprehensive income for the year 0 0 -1,820 0 1,555,794 1,553,974
Capital decrease -179,762 0 0 0 0 -179,762
Capital increase 3,679,762 0 0 0 0 3,679,762
Other adjustments 697 0 0 0 -697 0
Equity at 31 December 3,679,762 0 -3,365 0 2,012,075 5,688,472
Annual Report 2023 STATEMENT OF CHANGES IN EQUITY 19
STATEMENT OF CHANGES IN EQUITY – CONTINUED
The share capital consists of 175,000,000 shares of a nominal value of EUR 1 per share. All shares rank equally.
2023 Parent
EUR '000 Share capital Share premium
Reserve for net
revaluation under
the equity method
Reserve for
development
costs
Proposed
dividend
Retained
earnings
Total
Equity at 1 January 3,679,762 0 72,608 6,375 0 1,841,139 5,599,884
Restatement effect in prior year 0 0 0 0 0 88,588 88,588
Restated equity at 1 Janaury 3,679,762 0 72,608 6,375 0 1,929,727 5,688,472
Net profit for the year 0 0 16,885 0 0 340,235 357,120
Development costs for the year 0 0 0 2,581 0 -2,581 0
Other adjustments 0 0 -30,182 0 0 30,182 0
Other comprehensive income for the year 0 0 -573 0 0 0 -573
Total comprehensive income for the year 0 0 -13,870 2,581 0 367,836 356,547
Capital decrease -3,679,762 0 0 0 0 0 -3,679,762
Capital increase 175,000 1,750,000 0 0 0 0 1,925,000
Proposed capital distribution 0 0 0 0 750,000 -750,000 0
Dividend paid 0 0 0 0 0 -1,495,239 -1,495,239
Equity at 31 December 175,000 1,750,000 58,738 8,956 750,000 52,324 2,795,018
2022 Parent
EUR '000 Share capital Share premium
Reserve for net
revaluation under
the equity method
Reserve for
development
costs
Proposed
dividend
Retained
earnings
Total
Equity at 1 January 179,065 0 11,910 5,494 0 438,029 634,498
Net profit for the year as restated 0 0 62,484 0 0 1,493,310 1,555,794
Development costs for the year 0 0 0 881 0 -881 0
Other adjustments 0 0 34 0 0 -34 0
Other comprehensive income for the year 0 0 -1,820 0 0 0 -1,820
Total comprehensive income for the year 0 0 60,698 881 0 1,492,395 1,553,974
Capital decrease -179,762 0 0 0 0 0 -179,762
Capital increase 3,679,762 0 0 0 0 0 3,679,762
Other adjustments 697 0 0 0 0 -697 0
Equity at 31 December 3,679,762 0 72,608 6,375 0 1,929,727 5,688,472
Annual Report 2023 STATEMENT OF CASH FLOWS 20
STATEMENT OF CASH FLOWS
Group Parent
EUR '000 Note 2023 2022 2023 2022
Profit for the year 357,120 1,555,794 357,120 1,555,794
Non-cash adjustments 5.8 -22,894 524,845 -41,563 449,969
Change in working capital 5.8 3,135,507 -3,730,838 3,088,605 -3,690,392
Cash flow from operating activities before
financial income and expenses
Financial income, received 4.3 184,513 9,733 181,215 9,550
Financial expenses, paid 4.3 -50,543 -61,785 -49,735 -67,983
Cash flow from ordinary activities 3,603,703 -1,702,251 3,535,642 -1,743,062
Corporation tax paid -55,287 -520,656 -47,041 -508,113
Corporation tax received 20,548 0 20,237 0
Cash flow from operating activities 3,568,964 -2,222,907 3,508,838 -2,251,175
Purchase of intangible assets 6.1 -4,598 -3,078 -4,598 -3,078
Purchase of property, plant and equipment 6.2 -2,590 -3,125 -839 -3,087
Capital increase in subsidiaries 6.4 0 0 -62,387 -5,467
Dividends received 0 0 30,173 0
Disposal of subsidiaries 0 0 9 -24
Placement in time deposits -54,001 0 0 0
Cash flow from investing activities -61,189 -6,203 -37,642 -11,656
Proceeds from borrowings 1,993 1,574,587 457 1,574,587
Repayment of borrowings -3,014,636 0 -3,014,636 0
Movement in group enterprise cash pool 1,506,179 -2,778,875 1,506,179 -2,778,875
Capital increase 1,925,000 3,500,000 1,925,000 3,500,000
Capital decrease -3,679,762 0 -3,679,762 0
Dividend payment -1,495,239 0 -1,495,239 0
Payment of principal portion of lease liabilities -1,622 -1,043 -1,561 -1,043
Cash flow from financing activities -4,758,087 2,294,669 -4,759,562 2,294,669
Net foreign exchange difference on cash and
cash equivalents
-3,538 -25,723 -3,722 -19,472
Change in cash and cash equivalents -1,253,850 39,836 -1,292,088 12,366
Cash and cash equivalents at 1 January 1,424,501 1,384,665 1,386,648 1,374,282
Cash and cash equivalents at 31 December 170,651 1,424,501 94,560 1,386,648
Cash and cash equivalents are specified as follows:
Cash at bank and in hand without restrictions 164,676 228,595 91,044 191,632
Restricted cash * 5,975 1,195,906 3,516 1,195,016
Cash and cash equivalents at 31 December 170,651 1,424,501 94,560 1,386,648
* Restricted cash is relating to initial margin coverage held at clearing banks.
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 21
NOTES TO FINANCIAL STATEMENTS
BASIS OF REPORTING
1.1 BASIS OF PREPARATION
The consolidated and parent financial statements have
been prepared in accordance with International Finan-
cial Reporting Standards (IFRS, as defined in note 8.5) as
adopted by the EU and further requirements in the Dan-
ish Financial Statements Act applying to large enter-
prises of reporting class C.
The consolidated and parent financial statements have
been prepared on a going concern basis and under the
historical cost convention, with the exception of deriva-
tives and gas trading inventories, which are measured
at fair value as disclosed in notes 3.5, 3.6 and 5.1 and
with the exception of investments in subsidiaries, which
are measured under the equity method as disclosed in
note 6.4.
The consolidated financial statements are presented in
euros, which is also the Parent Company’s functional
currency. All values are rounded to the nearest thousand
(EUR’000), except if otherwise indicated.
Accounting policies related to specific line items are
described in the notes to which they relate. The descrip-
tion of accounting policies in the notes form part of the
overall description of accounting policies. Accounting
policies not directly related to a specific line item co-
vered by a note are presented below.
RESTATEMENT OF PRIOR YEAR NUMBERS
Previously, the Group assessed that gas flow capacities
under the current operating model could be net settled,
and the gas flow capacities were accounted for at fair
value in accordance with IFRS 9.
In 2023, the Group reassessed this practice for gas flow
capacities and concluded that the net settlement of gas
flow capacities has been insignificant since 2021 and
should have been accounted for as executory contracts
under IFRS 15 at that time.
As a consequence, comparative numbers for 2022 have
been restated and Danske Commodities has assessed
that there is no material impact of the fair value of gas
flow capacities for 2021.
The effect is a restatement of 2022 as follows:
The effect on disclosures 3.1-3.8, 4.2, 5.7, 5.8, 7.1 and 7.2
has been corrected.
BASIS FOR CONSOLIDATION
The consolidated financial statements incorporate the
financial information of Danske Commodities A/S, the
Parent Company, and its subsidiaries, together the
Group. Control is achieved where the Group is exposed,
or has rights, to variable returns from its involvement
with an entity and has the ability to affect those returns
through its power over the entity.
The consolidated financial statements are prepared by
combining items of a uniform nature and subsequently
eliminating intercompany transactions, internal stock-
holdings and balances and unrealised intercompany
profits and losses.
TRANSLATION OF FOREIGN CURRENCIES
Transactions in foreign currencies are translated at the
exchange rates prevailing at the dates of transaction.
Gains and losses arising due to differences between the
transaction date rates and the rates at the dates of pay-
ment are recognised in financial income or financial ex-
penses in the income statement.
Receivables, payables and other monetary items in for-
eign currencies that have not been settled at the ba-
lance sheet date are translated at the exchange rates
at the balance sheet date. Any differences between the
exchange rates at the balance sheet date and the trans-
action date rates are recognised in financial income
and expenses in the income statement.
Foreign subsidiaries are considered separate entities.
The income statements are translated at the average
exchange rate for the period, and the balance sheet
items are translated at the exchange rates at the ba-
lance sheet date.
Foreign exchange differences arising on translation of
the opening equity of foreign entities at the exchange
rates at the balance sheet date and on translation of
the income statements from average exchange rates to
the exchange rates at the balance sheet date are recog-
nised in other comprehensive income.
EUR '000
Increase in trading income and revenue from
contracts with customers
113,575
Decrease in tax on profit for the year -24,987
Increase in profit for the year 88,588
Decrease in derivative financial instrumens
(assets)
-17,353
Decrease in derivative financial instruments
(liability)
-130,928
Decrease in deferred tax (assets) -24,987
Increase in equity 88,588
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 22
1.1 BASIS OF PREPARATION – CONTINUED
CURRENT / NON-CURRENT
The Group presents assets and liabilities in the state-
ment of financial position based on current/non-current
classification. An asset is current when it is:
• expected to be realised or intended to be sold
or consumed in the normal operating cycle
• held primarily for the purpose of trading
• expected to be realised within twelve months
after the reporting period
• cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for
at least twelve months after the reporting pe-
riod
All other assets are classified as non-current.
A liability is current when it is:
• expected to be settled in the normal operating
cycle
• held primarily for the purpose of trading
• due to be settled within twelve months after
the reporting period
• without unconditional right to defer the settle-
ment of the liability for at least twelve months
after the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
1.2 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of the Group’s consolidated and parent
financial statements requires management to make es-
timates and assumptions that can have a significant ef-
fect on the application of policies and reported
amounts of assets, liabilities, income, expenses and re-
lated disclosures. The estimates and underlying as-
sumptions are based on historical experience and vari-
ous other factors. Actual results may differ from these
estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. Changes in estimates
may be necessary if there are changes in the circum-
stances on which the estimate was based or more de-
tailed information becomes available. Such changes
are recognised in the period in which the estimate is re-
vised.
The main areas where the Group has made significant
judgments when applying the accounting policies and
that have the most material effect on the amounts re-
cognised in the consolidated financial statements have
been described in the following notes:
• 2.1 Trading income and revenue from contracts
with customers
Estimates used in the preparation of these consolidated
financial statements are prepared based on customised
models, while the assumptions on which the estimates
are based rely on historical experience, external sources
of information and various other factors that manage-
ment assesses to be reasonable under the current condi-
tions and circumstances. These estimates and assump-
tions form the basis of making the judgments about car-
rying values of assets and liabilities when these are not
readily apparent from other sources. Actual results may
differ from these estimates. The estimates and underly-
ing assumptions are reviewed on an on-going basis con-
sidering the current and expected future set of condi-
tions.
The Group is exposed to several underlying economic
factors affecting the overall results, such as commodity
prices, foreign currency exchange rates, market risk pre-
miums and interest rates as well as financial instru-
ments with fair values derived from changes in these
factors.
The most important matters in understanding the key
sources of estimation uncertainty are described in the
following notes:
• 3.6 Fair value measurements
• 5.1 Inventories
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 23
EARNINGS
2.1 TRADING INCOME AND REVENUE FROM CONTRACTS WITH CUSTOMERS
SIGNIFICANT ACCOUNTING JUDGMENTS
Whether to account for transactions from contracts with
customers gross or net involves the use of significant
accounting judgment. In making the judgment the Group
has considered whether it controls the power volumes
prior to onwards sales to the counterparty. When the
Group directs the use of the volumes, holds the balan-
cing risk and the Group receives all benefits from the
sales of power, the Group is considered the principal in
the sale of power and energy-related services, why the
revenue is presented gross.
For some contracts, the Group has concluded that ow-
nership of the power volumes has not been transferred
to the Group. Although the Group has been granted the
ability to direct the use of the volumes, the asset owner
receives all the benefits from the sales of these volumes
and holds the related balancing risk, since the Group
only acts as an intermediary between the asset owner
and the market. On that basis, the Group is not consid-
ered the principal in the sale of these power and energy
related services, why the revenue and related cost of
sales is presented net.
ACCOUNTING POLICIES
Trading income
Trading income comprises realised and unrealised fair
value changes as well as realised gains and losses on
commodity derivatives and inventory held for trading.
Net trading income comprises net realised fair value
changes, gains and losses arising from trading within
energy commodity derivatives. The energy commodity
derivatives make up the Group’s trading portfolio which
includes futures, options, swaps, power transport ca-
pacities and certain forward sales and forward pur-
chases commodity contracts that are either financially
or physically settled. As the physically settled con-
tracts are managed on a portfolio basis, a practice of
net settlement is present, and the contracts are consi-
dered in scope of IFRS 9 and treated as derivatives.
Net changes in fair value of commodity derivatives and
net changes in fair value of inventory held for trading
represents changes in the unrealised part of fair value
of commodity derivatives held for trading and inventory
held for trading at the balance sheet date.
Revenue from contracts with customers
Revenue is measured at the contractually agreed price
exclusive of VAT and taxes charged on behalf of third
parties.
Sales agreements are divided into individually identifia-
ble performance obligations when applicable. If a sales
agreement includes several performance obligations,
the sales agreement’s transaction price is allocated to
each performance obligation.
Sales of power and energy-related services
Revenue from the sale of power and energy-related ser-
vices comprises consumption balancing as well as the
sale of power sourced from energy producers and re-
lated services in terms of e.g. production management
and balancing. The Group considers whether it is acting
as principal or agent, based on whether it holds the
main risks and controls the power and services deli-
vered before transferring it to the counterparty. Revenue
is recognised when control of the power is transferred to
the buyer simultaneously with fulfilment of the related
services, that being when the power is delivered. Agree-
ments for the sale of power and energy-related services
are considered a series of identical goods and services
that are transferred over time and revenue is recognised
at the amount to which the Group is entitled.
Sales of climate certificates
Revenue from the sale of climate certificates comprises
the sale of climate certificates sourced from producers.
As the Group controls the climate certificates before
transferring them to the counterparty, the Group has
concluded that it is acting as principal in these agree-
ments. Revenue is recognised when control of the cli-
mate certificate is transferred to the buyer being when
the certificate is delivered to the buyer. Agreements for
the sale of climate certificates are fulfilled at a point
in time.
Cost of sales
Cost of sales includes the purchase of power and certi-
ficates for resale and transportation thereof incurred to
achieve revenue from contracts with customers for the
year.
Group Parent
EUR '000 2023 2022 2023 2022
Trading income
Net trading income 313,707 1,642,459 288,188 1,408,015
Net change in fair value of commodity derivatives held for trading -871,816 1,631,744 -870,425 1,629,502
Net change in fair value of inventory held for trading 904,205 -1,183,437 904,205 -1,025,638
Revenue from contracts with customers
Sales of climate certificates 771,668 648,562 771,668 648,562
Sales of power and energy-related services 1,952,817 3,816,043 1,952,817 3,816,043
Total trading income and revenue from contracts with customers 3,070,581 6,555,371 3,046,453 6,476,484
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 24
RISK MANAGEMENT
3.1 MARKET RISK
Danske Commodities’ market risk arises in both com-
modity and financial markets, in which changing com-
modity prices and volumes are key risk factors.
The sensitivity analysis in the following sections relates
to open positions at 31 December 2023 and 31 December
2022. The sensitivity is calculated by adjusting the mar-
ket price used on each individual trade.
The sensitivity shown is based on reasonably possible
changes in the current observable market environment.
The effect of the assumed changes in respective market
risks is prepared on an ‘all else being equal’ basis. The
analysis is based on the financial assets and financial
liabilities held at 31 December 2023 and 31 December
2022.
Danske Commodities’ business is focused on short-term
trading, which is reflected in the maturity of the finan-
cial instruments that primarily fall due within 12
months. For more information, refer to note 3.3.
RISK MANAGEMENT PROCEDURES
Danske Commodities’ Board of Directors has developed
and enacted a risk management strategy for commodity
price risk and its mitigation. The risk management stra-
tegy also includes limits on foreign currency exposure.
COMMODITY PRICE RISK
Commodity price risk is the risk that the fair value or fu-
ture cash flows of an exposure will fluctuate because of
changes in underlying commodity prices. The Group’s ex-
posure to the risk of changes in commodity prices re-
lates primarily to the trading performed at Danske Com-
modities.
FOREIGN CURRENCY RISK
Foreign currency risk is the risk that the fair value or fu-
ture cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. Danske Commodi-
ties’ exposure to the risk of changes in foreign exchange
rates derives primarily from those of the Group’s opera-
ting activities in which trade receivables, accounts pay-
ables and derivatives held for trading are denominated
in a currency other than the functional currency.
The foreign currency risk is mitigated and hedged via
economic hedges by the Treasury function on a daily ba-
sis in accordance with the mandates, policies and hed-
ging strategy approved by the Board of Directors.
The risk relates to a wide range of currencies to which
the daily commercial business is exposed. The main un-
derlying currency of the Group’s cash flow is Euro as the
majority of Danske Commodities’ activities are per-
formed in market areas where commodity products are
priced in EUR.
Next to EUR, GBP is the most significant currency to
which Danske Commodities is exposed. The analysis
shows the profit and loss effect from movements in the
GBP/EUR ratio with all other variables held constant.
INTEREST RATE RISK
Interest rate risk is the risk that the future cash flows of
a financial instrument will fluctuate because of change
in market interest rates. Danske Commodities’ exposure
to the risk of changes in market interest rates relates
primarily to interest-bearing floating rate liabilities
and assets. The estimated effect is considering an ef-
fect of one year in profit and loss.
The table is calculated on an ‘all else being equal’ ba-
sis. The sensitivity calculation does not account for the
correlation between products. For some products, the
value is affected by multiple commodities.
Group Parent
SENSITIVITY 2023 2022 2023 2022
EUR '000 +/- in %
30% -205,998 -603,203 -205,998 -603,203
Gas price risk (financial instruments) -30% 252,334 655,798 252,334 655,798
30% 219,785 560,931 219,785 560,931
Gas price risk (inventory) -30% -219,785 -560,931 -219,785 -560,931
30% 15,587 3,761 10,798 -1,922
Power price risk -30% 56,709 64,740 61,521 70,252
30% 4,748 7,284 4,748 7,284
Certificate price risk -30% 2,802 -5,053 2,802 -5,053
6 % (2022: 8%) -7,166 30,949 -7,571 25,299
EUR/GBP currency risk -6 % (2022: -8%) 7,166 -30,949 7,571 -25,299
1% 2,519 27,789 2,519 27,789
Interest rate risk -1% -2,519 -27,789 -2,519 -27,789
Effect on profit
before tax
Effect on profit
before tax
Effect on profit
before tax
Effect on profit
before tax
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 25
3.2 CREDIT RISK MANAGEMENT
Exposure to credit risk may arise in Danske Commodi-
ties’ trading and treasury operations. Exposure can be
split into exchange and OTC. OTC trading is generally
performed under standard agreements such as EFET and
ISDA, which features netting provisions. The Group ma-
nages credit risk through a clear framework of policies
and procedures defined by the Board of Directors, Senior
Leadership and the Risk Management function. Respon-
sibilities are divided between different business teams,
Risk Management, Senior Leadership and the Board of
Directors. A thorough Know Your Customer (KYC) process
is carried out for all counterparties with whom the
Group engages in transactions.
As commodity exchanges generally require variation
margin settlement equal to the fair value, the Group
considers its credit exposure to commodity exchanges
to be insignificant.
The credit risk affecting the derivative financial instru-
ments measured at fair value is considered limited
based on the individual counterparty’s ratings with pub-
lic rating agencies.
Historically, Danske Commodities suffered no realised
losses from any single major counterparty.
Credit risk from the Company’s financial assets prima-
rily concerns derivatives, trade receivables and receiva-
bles from group enterprises. For more information of
credit risk related to receivables, refer to note 5.2.
3.3 LIQUIDITY RISK
Liquidity management is executed on an ongoing daily
basis in Danske Commodities’ Treasury function. Daily
cash flow forecasts are produced, ensuring availability
of required liquidity of the Group by appropriate cash
management, and maintaining adequate liquidity re-
serves at any time through a combination of readily
available cash and committed credit facilities provided
by Equinor ASA.
The table below shows Danske Commodities’ financial
liabilities divided into relevant maturity buckets based
on their contractual maturities for all financial liabili-
ties and derivative financial instruments. The amounts
disclosed in the table are the contractual undiscounted
cash flows.
In 2023, the committed credit facility has been repaid
as planned and liquidity needs have been much lower
than previous years due to lower margin requirements
and prices.
The Group and Parent Company’s committed credit fa-
cility (‘Revolving Credit Facility’) amounted to EUR 500
million at 31 December 2023 (2022: EUR 3,000 million).
The committed credit facility terminates in 2026. At 31
December 2023, the cash pool arrangement with Equinor
ASA has an overdraft limit of EUR 3,000 million, (2022:
EUR 6,500). The committed credit facility and the cash
pool overdraft ensures liquidity for the years to come.
As per 31 December 2023, the Group has drawn EUR 0
million (2022: EUR 3,000 million) of the total available
facilities in the amount of EUR 3,500 million (2022: EUR
9,500 million).
For overview of available cash comprising ‘cash and
cash equivalents’ and ‘group cash pool’ refer to note 3.4.
CREDIT QUALITY OF THE GROUP'S COUNTERPARTIES
Group Parent
EUR '000 2023 2022 2023 2022
AA rating 2,193,047 8,517,312 2,087,259 8,482,985
A rating 375,416 1,662,247 363,684 1,661,886
BBB rating 680,640 1,619,619 679,409 1,616,660
BB rating and lower 88,200 839,257 85,224 839,257
Not rated 118,513 90,323 116,334 114,330
Total at 31 December 3,455,816 12,728,758 3,331,910 12,715,118
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 26
3.3 LIQUIDITY RISK – CONTINUED
3.4 CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in
the Group will be able to continue as going concern
while maximising the return to shareholders through the
optimisation of the debt and equity balance.
The capital structure of the Group consists of net debt
and equity of the Group as disclosed in the statement of
equity.
The Group is not subject to any externally imposed capi-
tal requirements. The decrease in debt is primarily due
to no utilisation of the Parent Company’s credit facility
at 31 December 2023 as described in note 3.3. The repay-
ment in 2023 was possible due to lower margin require-
ments and prices, which also explains lower trade paya-
bles, payables to group enterprises and deposits related
to trading.
CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES
Group Parent
EUR '000 2023 2022 2023 2022
Financial instruments, maturity <1 year
Trade payables 411,813 1,449,030 409,121 1,443,538
Lease liabilities 1,331 1,208 1,238 1,208
Payables to group enterprises 217,743 815,194 226,436 885,876
Revolving credit facility * 0 3,014,636 0 3,014,636
Deposits related to trading 294,660 655,110 294,660 655,110
Other payables 30,303 49,564 25,356 44,873
Financial instruments, maturity 1-5 years
Lease liabilities 2,058 1,810 676 1,810
Other payables 0 2,118 0 2,118
Derivative financial instruments, maturity <1 year 419,439 2,903,013 418,879 2,898,716
Derivative financial instruments, maturity 1-5 years 149,548 257,584 146,397 257,459
Total financial liabilities 1,526,895 9,149,267 1,522,763 9,205,344
* For the Revolving Credit Facility provided by Equinor, the effective interest rate is the base rate (EURIBOR1M) plus a margin rate of 0.6% p.a.
at 31 December 2023. The effective interest rate at 31 December 2023 is 4.5% (2022: 1.0%).
GEARING RATIO
Group Parent
EUR '000
2023 2022 2023 2022
Debt * 962,416 6,023,596 959,159 6,084,095
Less:
Group cash pool (part of 'receivables from group enterprises') 1,272,696 2,778,875 1,272,696 2,778,875
Cash and cash equivalents 170,651 1,424,501 94,560 1,386,648
Net debt -480,931 1,820,220 -408,097 1,918,572
Equity ** 2,795,018 5,688,472 2,795,018 5,688,472
Net debt to equity ratio (%) -17% 32% -15% 34%
** Equity includes share capital, share premium and other equity reserves of the Group.
* Debt is defined as lease liabilities, trade and other payables (excluding derivatives and financial gurantee contracts), prepayments,
deposits related to trading and payables to group enterprises.
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 27
3.5 DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments in Danske Commodities
mainly consist of commodity derivatives that are traded
as part of the Group’s ordinary business activities as
well as foreign exchange derivatives used for managing
currency risk exposure. Trading activities are undertaken
by using a range of contract types in combination to
create incremental gains by arbitraging prices between
markets, locations and time periods. Foreign currency
derivatives are traded to mitigate the exposure to cur-
rencies denominated in a currency other than EUR. Fi-
nancial risks relating to the financial instruments are
managed on a portfolio basis. The net of these expo-
sures is monitored daily through risk reporting. The
credit risk is assessed separately and presented in a ta-
ble in note 3.2. For further information about offsetting
of financial assets and liabilities, refer to note 5.7.
For information about the methods and assumptions
used in determining the fair value of derivatives, refer to
note 3.6.
ACCOUNTING POLICIES
Derivatives are primarily classified as ‘held for trading’
for accounting purpose and initially recognised, and
subsequently measured at fair value through profit and
loss and recognised in the balance sheet as ‘derivative
financial instruments’. Derivative financial instruments
that are held for trading are classified as current assets
and liabilities regardless of their maturity date. Deriva-
tive financial instruments are categorised by means of
shared risk and underlying commodity.
Danske Commodities routinely enters into sale and pur-
chase transactions for physical delivery of energy com-
modities. A considerable part of these transactions for
physical delivery of a non-financial item is considered
within the scope of IFRS 9 since the contracts are capa-
ble of being net settled, and they are consequently ac-
counted for as derivative financial instruments mea-
sured at fair value through profit and loss.
A derivative embedded in a hybrid contract, with a non-
financial host contract, is separated from the host con-
tract and accounted for as a separate derivative if:
• the economic characteristics and risks are not
closely related to the host contract;
• a separate instrument with the same terms as
the embedded derivative would meet the defi-
nition of a derivative;
• and the hybrid contract is not measured at fair
value through profit or loss.
Embedded derivatives are measured at fair value with
changes in fair value recognised in profit or loss.
A portion of the sale and purchase transactions for
physical delivery of energy commodities takes the form
of contracts that were entered into and continue to be
held for the purpose of receipt or delivery of the physi-
cal commodity in accordance with the Group’s expected
sale, purchase or usage requirements (‘own use’) and are
not within the scope of IFRS 9. The assessment of
whether a contract is deemed to be ‘own use’ is based
on the nature of the promise within the contract as well
as facts and circumstances of how the contract is in-
cluded in Danske Commodities’ business activity.
3.6 FAIR VALUE MEASUREMENTS
Determining the fair value of the financial instruments
recognised and measured at fair value through profit
and loss in the financial statements may require the use
of estimates. To provide an indication about the relia-
bility of the inputs used in determining fair value, the
Group has classified its financial instruments into the
three levels.
LEVEL 1
Exchange-traded derivatives are valued using closing
prices provided by the exchanges at the balance sheet
date. These derivatives are categorised within level 1 of
the fair value hierarchy.
LEVEL 2
Derivatives designated to level 2 include both power,
gas and certificate trades with a typical contract
length < 1 year. Over-the-counter (OTC) financial swaps
and physical commodity sale and purchase contracts
including commodity forwards and options are gene-
rally valued using readily available information in the
public markets and if necessary, quotations provided by
brokers and price index developers.
Power capacities and foreign exchange contracts within
Danske Commodities are measured using internal mo-
dels. Internal models refer to standard valuation mod-
els that use market forward levels on standard instru-
ments, as well as incorporating inputs for the volatility
of the underlying indices, markets or commodities.
LEVEL 3
Derivatives within level 3 of the fair value hierarchy in-
cludes derivatives where the unobservable inputs used
in the valuation is significant. These inputs include
prices risk premiums, volatility and interruption factors.
For some markets, there is only observable prices avai-
lable for a maximum of three years ahead, after which
there is no active market. Danske Commodities holds
power forward contracts up to a 10-year time horizon.
For OTC commodity derivatives in this time horizon, the
market price used in areas with no observable prices is
calculated based on latest observable spreads to
neighbouring markets with observable prices. The unob-
servable spreads per MWh used is between DK1 and Ger-
many of EUR 4.35 (2022: assuming no price movements
and a forward price between EUR 48.75 – 51.88).
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 28
3.6 FAIR VALUE MEASUREMENTS – CONTINUED
The valuation of power contracts with a variable deli-
very profile incorporates a risk premium based on ob-
servable market activity for the contracts while ac-
counting for the relationship to the observable base
prices. For the valuation of clean spark spread options
products, the fair value is estimated using simulation
valuation techniques using assumptions developed in-
ternally based on observable market activity. The vola-
tility factor used in the simulation model ranges from
0.4 to 0.78 (2022: 0.469 to 1.29).
Based on the unobservable input parameters above a
reasonable alternative possible assumption is consi-
dered a movement of the unobservable input of 5%.
An increase of the volatility factor used in simulation
models of 5% will increase the fair value by EUR 2,105
thousand (2022: EUR 10,803 thousand). A decrease of 5%
decreases fair value by EUR 2,100 thousand (2022: EUR
10,804 thousand).
VALUATION PROCESSES
The valuation process of the derivatives includes input
from relevant stakeholders of Danske Commodities, and
the final valuation is verified and approved by the Risk
Management function. To minimise the use of subjective
estimates or modifications of parameters and calcula-
tion models, it is Danske Commodities’ policy to deter-
mine fair values based on the external information that
most accurately reflects the market values. The Group
uses pricing services and benchmark services to in-
crease the data quality. Danske Commodities’ policy is
to recognise transfers into and out of fair value hierar-
chy levels at the end of each reporting period.
Transfers in fair value hierarchy
The transfer from level 2 to level 3 relates to financial
instruments whose measurement is now using signifi-
cant unobservable input.
FAIR VALUE HIERARCHY
2023
Quoted prices in active
markets
Significant observable
inputs
Unobservable inputs
EUR '000 Note Level 1 Level 2 Level 3 Total
Financial assets
Gas trading derivatives 968 716,637 396 718,001
Power trading derivatives 2,609 176,064 24,986 203,659
Trading certificates 2,077 22,014 0 24,091
Foreign exchange derivatives 0 4,292 0 4,292
Non-financial assets
Gas trading inventories 5.1 0 732,615 0 732,615
Certificate trading inventories 5.1 0 19,106 0 19,106
Total financial and non-financial assets 5,654 1,670,728 25,382 1,701,764
Liabilities
Gas trading derivatives 0 341,638 134,522 476,160
Power trading derivatives 122 70,497 4,289 74,908
Trading certificates 0 10,953 0 10,953
Foreign exchange derivatives 0 444 0 444
Total financial liabilities 122 423,532 138,811 562,465
2022
Quoted prices in active
markets
Significant observable
inputs
Unobservable inputs
EUR '000 Note Level 1 Level 2 Level 3 Total
Financial assets
Gas trading derivatives 73 4,701,096 57,980 4,759,149
Power trading derivatives 1,348 485,426 84,477 571,251
Foreign exchange derivatives 0 18,998 0 18,998
Non-financial assets
Gas trading inventories 5.1 0 1,869,772 0 1,869,772
Total financial and non-financial assets 1,421 7,075,292 142,457 7,219,170
Liabilities
Gas trading derivatives 44,481 2,268,471 16 2,312,968
Power trading derivatives 150 686,527 64,556 751,233
Foreign exchange derivatives 0 56,153 0 56,153
Total financial liabilities 44,631 3,011,151 64,572 3,120,354
Group
Group
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 29
3.6 FAIR VALUE MEASUREMENTS – CONTINUED
2023 Parent
Quoted prices in active
markets
Significant observable
inputs
Unobservable inputs
EUR '000 Note Level 1 Level 2 Level 3 Total
Financial assets
Gas trading derivatives 968 716,638 396 718,002
Power trading derivatives 2,609 171,856 24,986 199,451
Trading certificates 2,077 22,014 0 24,091
Foreign exchange derivatives 0 4,292 0 4,292
Non-financial assets
Gas trading inventories 5.1 0 732,615 0 732,615
Certificate trading inventories 5.1 0 19,106 0 19,106
Total financial and non-financial assets 5,654 1,666,521 25,382 1,697,557
Liabilities
Gas trading derivatives 0 341,638 134,522 476,160
Power trading derivatives 122 10,953 4,289 15,364
Trading certificates 0 66,877 0 66,877
Foreign exchange derivatives 0 444 0 444
Total financial liabilities 122 419,912 138,811 558,845
2022 Parent
Quoted prices in active
markets
Significant observable
inputs
Unobservable inputs
EUR '000 Note Level 1 Level 2 Level 3 Total
Financial assets
Gas trading derivatives 73 4,701,096 57,980 4,759,149
Power trading derivatives 1,348 482,461 84,477 568,286
Foreign exchange derivatives 0 18,998 0 18,998
Non-financial assets
Gas trading inventories 5.1 0 1,869,772 0 1,869,772
Total financial and non-financial assets 1,421 7,072,327 142,457 7,216,205
Liabilities
Gas trading derivatives 44,481 2,268,471 16 2,312,968
Power trading derivatives 114 682,225 64,556 746,895
Foreign exchange derivatives 0 56,153 0 56,153
Total financial liabilities 44,595 3,006,849 64,572 3,116,016
LEVEL 3 DERIVATIVES
Group and Parent
EUR '000 2023 2022
Fair value contracts at 1 January 77,885 18,078
Transfers into level 3 0 76,275
Settlements 53,689 0
Gains (losses) recognised in the income statement -197,311 27,508
Purchases
-48,114 -66,538
Sales 422 22,562
Net fair value of contracts at 31 December -113,429 77,885
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 30
3.6 FAIR VALUE MEASUREMENTS – CONTINUED
SIGNIFICANT ACCOUNTING ESTIMATES
In some cases, the fair values of derivatives are esti-
mated using internal models due to the absence of
quoted prices or other observable, market-corroborated
data. This primarily applies to the Group’s longer-term,
structured derivative contracts or contracts in illiquid
markets. Most of these contracts are valued using mo-
dels with inputs that include price curves for each of the
different products. These price curves are built up from
available active market pricing data, including volati-
lity and correlation, and modelled using the maximum
available market-derived information. Additionally,
when limited data exist for certain products or market
areas, prices are determined using historical and long-
term pricing relationships. The use of alternative esti-
mates or valuation methodologies may result in signifi-
cantly different values for these derivatives.
ACCOUNTING POLICIES
The Group measures financial instruments, such as de-
rivatives, at fair value at each balance sheet date. Fair
value is the price that would be received for selling an
asset or paid for transferring a liability in an orderly
transaction between market participants at the mea-
surement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or
transfer the liability takes place either:
• in the principal market for the asset or liability,
or
• in the absence of a principal market, in the
most advantageous market for the asset or lia-
bility
The fair value of an asset or a liability is measured us-
ing the assumptions that market participants would use
when pricing the asset or liability, assuming that mar-
ket participants act in their economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
Danske Commodities uses valuation techniques that are
appropriate in the circumstances and for which suffi-
cient data are available to measure fair value, maximi-
sing the use of relevant observable inputs and minimi-
sing the use of unobservable inputs.
All assets and liabilities for which fair value is meas-
ured or disclosed in the financial statements are cate-
gorised within the fair value hierarchy, described as fol-
lows, based on the lowest level input that is significant
to the fair value measurement as a whole:
• level 1 — quoted and unadjusted market prices
in active markets for identical assets or liabili-
ties
• level 2 — valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly ob-
servable
• level 3 — valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognised in the fi-
nancial statements at fair value on a recurring basis,
the Group determines whether transfers have occurred
between levels in the hierarchy by reassessing categori-
sation at the end of each period in which the reassess-
ment is based on the lowest level input that is signifi-
cant to the fair value measurement as a whole.
Danske Commodities’ Risk Management function deter-
mines the policies and procedures for recurring fair
value measurement for unquoted financial assets and
liabilities.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or li-
ability and the level of the fair value hierarchy, as ex-
plained above.
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 31
3.7 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
The carrying amount of financial assets and liabilities
measured at amortised cost is considered a reasonable
approximation of fair value.
3.8 DEFERRED DAY-1 PROFIT OR LOSS
Refer to note 3.6 for information regarding fair value
measurements.
ACCOUNTING POLICIES
The Group uses various valuation techniques to measure
the fair value of financial instruments that are not
traded in an active market. Differences may arise be-
tween the fair value at initial recognition and the
amount determined at initial recognition using the valu-
ation techniques. Any such gains or losses are deferred
and recognised in the income statement over the deli-
very period of underlying contracts.
Group Parent
EUR '000 2023 2022 2023 2022
Financial assets measured at fair value through profit or loss
Derivatives held for trading * 945,751 5,330,400 941,544 5,327,435
Derivatives in economic hedges ** 4,292 18,998 4,292 18,998
Financial assets measured at amortised cost
Trade receivables 693,361 1,369,480 690,087 1,360,478
Cash and cash equivalents 170,651 1,424,501 94,560 1,386,648
Receivables from group enterprises 1,532,700 4,093,498 1,550,581 4,137,218
Deposits related to trading and prepayments 55,060 491,881 50,846 484,341
Current asset investments 54,001 0 0 0
Financial assets 3,455,816 12,728,758 3,331,910 12,715,118
Financial liabilities measured at fair value through profit or loss
Derivatives held for trading * 562,021 3,064,201 558,401 3,059,863
Derivatives in economic hedges ** 444 56,153 444 56,153
Financial liabilities measured at amortised cost
Trade payables 411,813 1,449,030 409,121 1,443,538
Payables to group enterprises 217,743 3,829,830 226,436 3,900,512
Deposits related to trading and prepayments 299,168 690,036 296,332 690,036
Lease liabilities 3,389 3,018 1,914 3,018
Financial liabilities 1,494,578 9,092,268 1,492,648 9,153,120
* Derivative financial instruments consist of swaps, futures, forwards and options related to commodity trading derivatives.
** Derivatives in economic hedges consist of foreign exchange derivatives.
Group and Parent
EUR '000 2023 2022
Balance at 1 January 162,196 30,407
Profit/loss deferred on new transactions 50,179 135,426
Profit/loss recognised in the income statement -88,353 -3,637
Reserve balance at 31 December 124,022 162,196
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 32
OTHER FINANCIAL NOTES
4.1 STAFF COSTS
Refer to note 4.2 for further information regarding the
Group’s share savings programme.
ACCOUNTING POLICIES
Staff Costs
Wages, salaries, pension contributions, social security
contributions, sick leave and bonuses are recognised in
the year in which the associated services are rendered
by employees of the Group.
Other external expenses
Other external expenses comprise other operating ex-
penses, including expenses for premises, consultancy,
marketing and office expenses, etc.
4.2 RELATED PARTIES
Danske Commodities A/S is controlled by Equinor Refin-
ing Norway AS, 5954 Mongstad, 1263 Lindås, Norway. The
ownership is registered in the Company’s register of
shareholders as holding 100% of the votes and shares.
The Group is included in the consolidated financial
statements of its ultimate Parent Company, Equinor
ASA.
The consolidated financial statements of Equinor ASA
can be obtained on request to:
Equinor ASA, Forusbeen 50, 4035 Stavanger, Norway.
OTHER RELATED PARTIES
Other related parties comprise the management of Equi-
nor Refining Norway AS and Equinor ASA as well as the
Board of Directors and the Executive Board, together
with their immediate families. Furthermore, other re-
lated parties include companies in which Equinor ASA
and the aforementioned individuals have significant in-
fluence, joint control or control.
The majority of the agreements related to these trans-
actions are renegotiated on a regular basis. There were
no transactions with members of the Board of Directors
and the Executive Board, other than remuneration.
Group Parent
EUR '000 2023 2022 2023 2022
Wages and salaries 54,731 68,475 50,648 66,298
Pensions 3,976 3,056 3,878 2,997
Other staff costs 3,697 2,952 3,081 2,725
Staff costs 62,404 74,483 57,607 72,020
Average number of employees 446 374 427 365
Number of employees, end of the year 487 412 469 401
The Group is controlled by the following entities:
Name Type Place of incoporation Ownership interest
Equinor ASA* Ultimate parent entity Norway 100%
Equinor refining Norway AS** Immediate parent entity Norway 100%
* The Norwegian State is the majority shareholder of Equinor ASA.
** Equinor ASA holds 100% of the issued ordinary shares of Equinor refining Norway AS.
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 33
4.2 RELATED PARTIES – CONTINUED
The Group holds a Parent Company Guarantee issued by
Equinor ASA of EUR 300 million (2022: EUR 300 million) to
cover ongoing trading commitments.
KEY MANAGEMENT REMUNERATION
During the year, key management personnel consisted of
the CEO and CFO.
Remuneration to five members of the Board of Directors
is paid by the ultimate parent, Equinor ASA. Remunera-
tion to one member of the Board of Directors is paid by
Danske Commodities A/S and amounted to EUR 26 thou-
sand for 2023 (2022: two members, EUR 54 thousand).
Remuneration of the Executive Board comprises a base
salary, pension contribution, share-based incentive pro-
grammes and other benefits (car, cash bonus, etc.)
SHARE SAVINGS PROGRAMME
The share savings programme provides employees with
the opportunity to purchase Equinor shares through
monthly salary deductions. If shares are kept for two
full calendar years of continued employment following
the year of purchase, the employees will be allocated
one bonus share for each share purchased. The latest
vesting date for the granted bonus warrants is 2024. The
amount expensed for the Executive Board amounted to
EUR 50 thousand in 2023 (2022: EUR 14 thousand).
Group Parent
EUR '000 2023 2022 2023 2022
Transactions with related parties
Transactions included in 'trading income and revenue from contracts
with customers':
Sales of energy commodities to related parties 5,550,688 4,612,877 5,630,765 4,783,338
Sales of energy commodities to other related parties 1,149,690 1,504,861 1,149,654 1,504,861
Purchases of energy commodities from related parties 3,469,891 3,950,713 3,553,170 4,172,736
Purchases of energy commodities from other related parties 19,320 27,038 19,320 27,038
Change in value of derivatives from related parties -1,479,235 1,389,272 -1,479,235 1,389,272
Change in value of derivatives from other related parties -10 -1,716 -10 -1,716
Transactions included in 'cost of sales':
Purchases of energy commodities from related parties 0 0 0 10,250
Purchases of energy commodities from other related parties 378,048 428,336 378,048 428,336
Other transactions:
Other purchases from related parties 9,232 8,371 11,973 10,321
Other purchases from other related parties 1,147 468 958 468
Other sales to related parties 10,600 6,971 10,514 6,972
Other sales to other related parties 3,129 1,010 3,129 1,010
Finance expenses to related parties 24,144 41,343 24,146 41,463
Finance income from related parties 126,485 0 128,698 671
Finance income from other related parties 260 0 260 0
Capital injection from related parties 1,925,000 3,679,762 1,925,000 3,679,762
Catpial injection to related parties 0 0 62,387 0
Capital withdrawal to related parties 3,679,762 179,762 3,679,762 179,762
Dividend paid to related parties 1,495,238 0 1,495,238 0
Dividend received from related parties 0 0 30,173 0
Related party balances at 31 December
Payables to related parties 150,108 624,351 158,948 695,033
Receivables from related parties 247,130 1,287,344 265,929 1,331,064
Payables to other related parties 67,635 190,843 67,488 190,843
Receivables from other related parties 12,874 27,279 11,956 27,279
Fair value of derivatives with related parties, asset 258,690 2,740,301 258,690 2,740,301
Fair value of derivatives with related parties, liability 336,663 1,339,039 336,663 1,339,039
Fair value of derivatives with other related parties, asset 25 35 25 35
Loans from related parties 0 3,014,636 0 3,014,636
Loans to other related parties 1,272,696 2,778,875 1,272,696 2,778,875
REMUNERATION OF THE EXECUTIVE BOARD
Group and Parent
EUR '000 2023 2022
Base salary 981 806
Other benefits 723 814
Pensions contributions 98 81
Shared-based payments 184 127
Total remuneration 1,986 1,828
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 34
4.2 RELATED PARTIES – CONTINUED
LONG-TERM INCENTIVE PROGRAMME (‘LTI’)
The LTI is calculated as a portion of the CEO’s fixed re-
muneration. On behalf of the CEO, Danske Commodities
A/S acquires shares equivalent to the net annual grant
amount. The shares are subject to a three-year lock-in
period and then released for the CEO’s disposal. If the
lock-in obligations are not fulfilled, the CEO must pay
back the gross value of the locked-in shares limited to
the gross value of the grant amount.
The level of the annual LTI reward is in the range of 20-
30% of the annual base salary for the participant on the
condition the CEO is invited to participate in in the LTI
programme. The latest vesting date for granted LTI-pro-
grammes is 2024. The amount expensed for the LTI pro-
gramme amounted to EUR 134 thousand in 2023 (2022:
EUR 113 thousand).
The total recognised expense for the Executive Board
amounts to EUR 184 thousand in 2023 (2022: EUR 127
thousand) and was expensed in the period incurred.
ACCOUNTING POLICIES
Equinor ASA has established share-based incentive pro-
grammes which are equity-settled and in which the Ex-
ecutive Board and employees in the Group can partici-
pate. Danske Commodities compensates its parent en-
tity for the cost of both the LTI and the share savings
programme through intra-group recharges. The re-
charges are linked to the fair value of the programmes
and the vesting period. Recharged costs from the parent
entity are expensed in the period incurred. Costs rela-
ting to the share-based programmes are recognised in
the income statement within staff costs.
4.3 FINANCIAL INCOME AND EXPENSES
ACCOUNTING POLICIES
Financial income and expenses comprise interest in-
come and interest expenses, the interest element of
lease liabilities, realised and unrealised exchange rate
adjustments as well as surcharges and refunds under
the Tax Prepayment Scheme, etc. Other financial income
and expenses primarily comprises realised gains and
losses on exchange forward derivatives.
FINANCIAL INCOME
Group Parent
EUR '000 2023 2022 2023 2022
Interest income, group enterprises 126,745 0 128,958 671
Currency exchange gains 932 266 0 0
Other financial income 56,836 9,467 52,257 8,879
Total 184,513 9,733 181,215 9,550
FINANCIAL EXPENSES
EUR '000 2023 2022 2023 2022
Interest expense, group enterprises 24,144 41,343 24,146 41,463
Other financial expenses 24,060 43,098 23,523 42,924
Currency exchange losses 5,749 3,001 5,741 3,002
Interst on lease liabilities 128 66 47 66
Total 54,081 87,508 53,457 87,455
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 35
WORKING CAPITAL
5.1 INVENTORIES
Inventories comprise gas and certificates for resale. Ex-
penses relating to the gas trading inventories and cer-
tificates trading inventories are recognised as ‘trading
income’. Expenses relating to other certificates are re-
cognised as ‘cost of sales’.
Costs related to certificate inventories expensed in the
income statement amounts to EUR 762,742 thousand
(2022: EUR 673,265 thousand).
SIGNIFICANT ACCOUNTING ESTIMATES
Fair value measurement of the gas trading inventories
requires management to make estimates and use as-
sumptions, as observable market prices for gas kept in
storages are not available, whereas closely related
proxy prices for gas kept at the gas hubs are. The proxy
prices are used to value the storages. The impact of the
estimate is considered low.
ACCOUNTING POLICIES
The trading inventories are acquired with the purpose of
selling in the near future and generating a profit from
fluctuations in price or margin. Therefore, the Group
meets the criteria in IAS 2 for broker-traders.
As a result, trading inventories are measured at fair
value less cost to sell. Changes in fair value are recog-
nised in the income statement within ‘trading income
and revenue from contracts with customers'. The inven-
tories are categorised within level 2 of the fair value hi-
erarchy.
Certificate inventories, that are not held for trading, are
measured at the lower of cost according to FIFO and net
realisable value. The net realisable value of certificate
inventories is calculated at the amount expected to be
generated by sales during normal operations less-sell-
ing expenses. The net realisable value is determined al-
lowing for marketability, obsolescence and develop-
ment in expected sales.
In the event of a write-down of certificate inventories to
net realisable value, the write-down is expensed in the
period when the loss occurs. Any subsequent reversal of
a write-down, as a result of an increase in the net reali-
sable value, will be recognised as a reduction in the
amount of inventory costs recognised in the period when
the increase has occurred.
5.2 TRADE RECEIVABLES
Group Parent
EUR '000 2023 2022 2023 2022
Gas trading inventories 732,615 1,869,772 732,615 1,869,772
Certificates trading inventories 19,106 20,133 19,106 20,133
Other certificates 14,990 24,570 14,990 24,570
Total inventories 766,711 1,914,475 766,711 1,914,475
Group Parent
EUR '000 2023 2022 2023 2022
Trade receivables 693,874 1,374,933 690,600 1,365,931
Loss allowance -513 -5,453 -513 -5,453
Total receivables 693,361 1,369,480 690,087 1,360,478
LOSS ALLOWANCE
Group Parent
EUR '000 2023 2022 2023 2022
Loss allowance at 1 January 5,453 198 5,453 198
Loss allowance recognised in profit or loss during the year 513 5,453 513 5,453
Unused amount reversed -5,453 -198 -5,453 -198
Loss allowance at 31 December 513 5,453 513 5,453
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 36
5.2 TRADE RECEIVABLES – CONTINUED
Information about the Group’s exposure to credit risk
and foreign currency risk can be found in notes 3.2 and
3.1. Information about the Group’s gross trade receiva-
bles balances at 31 December can be found in note 5.7.
ACCOUNTING POLICIES
Trade receivables are amounts due from counterparties
for goods sold or services performed in the ordinary
course of business. Trade receivables are measured at
amortised cost less allowance for lifetime expected
credit losses. They are generally due for settlement
within 30 days and are therefore all classified as cur-
rent.
The Group applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables.
Therefore, the Group does not track changes in credit
risk, but instead recognises a loss allowance based on
lifetime expected credit losses at each reporting date.
The Group has established a provision matrix that is
based on its historical credit loss experience, taking for-
ward-looking factors into account. The expected loss
rates are updated at each reporting date. There have
been no significant changes in the estimation tech-
niques and assumptions during the year.
Historically, the Group has not recognised any signifi-
cant impairment of any single debtor.
In addition to the lifetime expected credit loss allow-
ance on trade receivables, the Group may also recog-
nise an impairment on a specific debtor if there is any
internal or external information indicating that a loss
will incur. When receivables have been written off, the
Group continues to engage in enforcement activity to
attempt to recover the receivable due. Recoveries made
are recognised in profit or loss.
Impairment losses on trade receivables are presented
as other external expenses within operating profit. Sub-
sequent recoveries of amounts previously written off are
credited against the same line item.
AGING OF TRADE RECEIVABLES, GROSS
2023
Group
EUR '000 Current Between 30 and 60 days More than 60 days Total
Expected loss rate 0% 0% 0%
Carrying amount - trade receivables 1,951,652 0 701 1,952,353
Loss allowance 513 0 0 513
2022
Group
EUR '000 Current Between 30 and 60 days More than 60 days Total
Expected loss rate 0% 0% 0%
Carrying amount - trade receivables 4,829,255 69 1,327 4,830,651
Loss allowance 5,452 1 0 5,453
2023
Parent
EUR '000 Current Between 30 and 60 days More than 60 days Total
Expected loss rate 0% 0% 0%
Carrying amount - trade receivables 1,948,378 0 701 1,949,079
Loss allowance 513 0 0 513
2022
Parent
EUR '000 Current Between 30 and 60 days More than 60 days Total
Expected loss rate 0% 0% 0%
Carrying amount - trade receivables 4,820,253 69 1,327 4,821,649
Loss allowance 5,452 1 0 5,453
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 37
5.3 OTHER RECEIVABLES
ACCOUNTING POLICIES
Other receivables are measured at amortised cost. They
are generally due for settlement within one year and are
therefore all classified as current.
In certain cases, the Group may consider a receivable
to be in default when internal or external information
indicates that the Group is unlikely to receive the out-
standing contractual amounts in full before considering
any credit enhancements held by the Group. A receiva-
ble is written off when there is no reasonable expecta-
tion of recovering the contractual cash flows.
5.4 OTHER PAYABLES
ACCOUNTING POLICIES
Other payables are measured at amortised cost and are
unsecured. They are generally due for settlement within
one year and are therefore all classified as current.
5.5 DEPOSITS RELATED TO TRADING
Deposits relating to trading activities within the Group
are the amounts of cash required to maintain or open a
trading position with certain counterparties. Deposits
related to trading consists of margin calls and cash de-
posits.
Margin calls are a collateral payment to/from OTC
counterparties to cover changes in the value of underly-
ing assets used in futures/forward contracts. Cash de-
posits are used as collateral in order for the Group to
open a new position for certain counterparties.
Margin calls are monitored daily by management and
increases/decreases in margin calls are transferred at a
daily basis to ensure credit risk is minimised to the
greatest extent possible under the applicable agree-
ments.
There exists an obligation between the parties to repay
the deposit to the counterparty upon settlement of the
contracts. There are no other significant terms and con-
ditions associated with the use of collateral.
ACCOUNTING POLICIES
Deposits related to trading are measured at amortised
cost and are unsecured. They are generally due for set-
tlement within one year and are therefore all classified
as current.
Group Parent
EUR '000 2023 2022 2023 2022
VAT receivables 40,518 71,109 31,702 62,232
Other receivables 4,889 5,393 2,801 0
Total 45,407 76,502 34,503 62,232
Group Parent
EUR '000 2023 2022 2023 2022
Staff obligations 22,883 35,945 22,883 35,945
Other payables 5,682 15,433 2,473 11,046
VAT payables 1,738 304 0 0
Total 30,303 51,682 25,356 46,991
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 38
5.6 PROVISIONS
Onerous contracts comprise contracts with delivery
from 2024 to 2026. The onerous contracts comprise con-
tracts for which the unavoidable costs for purchase of
commodities exceed the economic benefits for the same
commodities.
The Group is party to a limited number of minor court
cases and legal disputes. In the Group’s assessment,
none of these will significantly impact the Danske Com-
modities’ financial position, neither individually nor
collectively. The outcome of the claims may depend on
future events which are uncertain by nature.
ACCOUNTING POLICIES
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources em-
bodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the
amount of the obligation.
If the Group has a contract that is onerous, the present
obligation under the contract is recognised and meas-
ured as a provision. An onerous contract is a contract
under which the unavoidable costs (i.e. the costs that
the Group cannot avoid because it has the contract) of
meeting the obligations under the contract exceed the
economic benefits expected to be received under it.
Group Parent
EUR '000
2023 2022 2023 2022
Onerous contracts
At 1 January 1,083 1,297 1,083 1,297
Utilised amounts -462 -214 -462 -214
Litigation and claims
At 1 January 6,300 1,500 6,300 1,500
Arising during the year 0 5,000 0 5,000
Reversal of unused amounts -5,000 -200 -5,000 -200
Total 1,921 7,383 1,921 7,383
Current 1,628 6,763 1,628 6,763
Non-current 293 620 293 620
Total 1,921 7,383 1,921 7,383
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 39
5.7 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES
2023
EUR '000
Gross amounts of
recognised financial
asset/liability
Gross amounts offset
in the balance sheet
Net amounts
presented in the
balance sheet
Cash collateral
(received/pledged)
Net amount
Financial assets
Trade receivables 1,952,353 1,258,992 693,361 160,507 532,854
Derivative financial
instruments
4,337,928 3,387,885 950,043 134,153 815,890
Deposits held for
trading
1,886,883 1,840,595 46,288 0 46,288
Total 8,177,164 6,487,472 1,689,692 294,660 1,395,032
Financial liabilities
Trade payables 1,670,805 1,258,992 411,813 23,670 388,143
Derivative financial
instruments
3,806,201 3,243,736 562,465 3,610 558,855
Deposits held for
trading
2,242,430 1,947,770 294,660 0 294,660
Total 7,719,436 6,450,498 1,268,938 27,280 1,241,658
2022
EUR '000
Gross amounts of
recognised financial
asset/liability
Gross amounts offset
in the balance sheet
Net amounts
presented in the
balance sheet
Cash collateral
(received/pledged)
Net amount
Financial assets
Trade receivables 4,830,651 3,461,171 1,369,480 226,758 1,142,722
Derivative financial
instruments
20,639,100 15,289,702 5,349,398 428,352 4,921,046
Deposits held for
trading
8,173,393 7,712,540 460,853 0 460,853
Total 33,643,144 26,463,413 7,179,731 655,110 6,524,621
Financial liabilities
Trade payables 4,910,201 3,461,171 1,449,030 201,124 1,247,906
Derivative financial
instruments
19,259,763 16,139,409 3,120,354 73,575 3,046,779
Deposits held for
trading
7,517,943 6,862,833 655,110 0 655,110
Total 31,687,907 26,463,413 5,224,494 274,699 4,949,795
2023 Parent
Related amounts not set off in the balance sheet
EUR '000
Gross amounts of
recognised financial
asset/liability
Gross amounts offset
in the balance sheet
Net amounts
presented in the
balance sheet
Cash collateral
(received/pledged)
Net amount
Financial assets
Trade receivables 1,949,079 1,258,992 690,087 160,507 529,580
Derivative financial
instruments
4,324,048 3,378,212 945,836 134,153 811,683
Deposits held for
trading
1,877,104 1,832,023 45,081 0 45,081
Total 8,150,231 6,469,227 1,681,004 294,660 1,386,344
Financial liabilities
Trade payables 1,668,113 1,258,992 409,121 23,670 385,451
Derivative financial
instruments
3,794,008 3,235,163 558,845 3,610 555,235
Deposits held for
trading
2,232,756 1,938,096 294,660 0 294,660
Total 7,694,877 6,432,251 1,262,626 27,280 1,235,346
Related amounts not set off in the balance sheet
Related amounts not set off in the balance sheet
Group
Group
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 40
5.7 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES – CONTINUED
ACCOUNTING POLICIES
The Group assesses financial assets and liabilities on
an individual basis and uses that assessment as the unit
of account. Financial assets and liabilities are offset,
and the net amount is reported in the balance sheet
when the Group currently has a legally enforceable
right to offset the recognised amounts, and there is an
intention to settle on a net basis or realise the asset
and settle the liability simultaneously.
The Group enters into master netting agreements with
counterparties to manage the credit risks associated
primarily with over-the-counter commodity trading.
These master netting agreements enable the Group and
its counterparties to set off financial liabilities against
financial assets in the ordinary course of business as
well as in case of default.
Amounts which cannot be offset under IFRS, but which
could be offset if certain conditions arise such as col-
lateral received or pledged, are presented in the table
to show the total net exposure of the Group.
2022 Parent
Related amounts not set off in the balance sheet
EUR '000
Gross amounts of
recognised financial
asset/liability
Gross amounts offset
in the balance sheet
Net amounts
presented in the
balance sheet
Cash collateral
(received/pledged)
Net amount
Financial assets
Trade receivables 4,821,649 3,461,171 1,360,478 226,758 1,133,720
Derivative financial
instruments
20,627,272 15,280,839 5,346,433 428,352 4,918,081
Deposits held for
trading
8,164,468 7,706,151 458,317 0 458,317
Total 33,613,389 26,448,161 7,165,228 655,110 6,510,118
Financial liabilities
Trade payables 4,904,709 3,461,171 1,443,538 201,124 1,242,414
Derivative financial
instruments
19,249,035 16,133,019 3,116,016 73,575 3,042,441
Deposits held for
trading
7,509,081 6,853,971 655,110 0 655,110
Total 31,662,825 26,448,161 5,214,664 274,699 4,939,965
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 41
5.8 CASH FLOW
ACCOUNTING POLICIES
Cash flow statement
The statement of cash flows is compiled using the indi-
rect method, showing cash flows from operating, inves-
ting and financing activities as well as cash and cash
equivalents at the beginning and end of the year for the
Group and the Parent Company, respectively.
Cash flows from operating activities
Cash flows from operating activities are calculated as
the net profit for the year adjusted for changes in wor-
king capital and non-cash operating items such as de-
preciation, amortisation and impairment losses and
provisions.
Cash payments for short-term leases, leases of low
value assets and variable lease payments, which are
not included in the measurement of the lease liability
within operating activities, are classified as cash flows
from operating activities.
Working capital comprises current assets less short-
term debt excluding items included in cash and cash
equivalents.
Cash flows from investing activities
Cash flows from investing activities comprise cash
flows from acquisitions, disposals and other adjust-
ments of intangible assets, property, plant and equip-
ment as well as investments in subsidiaries and current
asset investments.
Cash flows from financing activities
Cash flows from financing activities comprise cash
flows from the raising and repayment of long-term debt,
repayment of lease liabilities, payments to and from
shareholders as well as payments to group cash pool.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and
in hand and short-term deposits with a maturity of three
months or less. The short-term deposits are highly liq-
uid, readily convertible to known amounts of cash and
subject to an insignificant risk of changes in value and
are held for the purpose of meeting short-term cash
commitments.
Demand deposits held in clearing bank accounts are in-
cluded as restricted cash if the deposits provided as
part of the Group’s operating activities and therefore is
deemed as held for the purpose of meeting short-term
cash commitments, and the deposits can be released
from the account without undue expenses.
CASH FLOW STATEMENT - NON-CASH ADJUSTMENTS
Group Parent
EUR '000 2023 2022 2023 2022
Financial income -184,513 -9,733 -181,215 -9,550
Financial expenses 54,081 87,508 53,457 87,455
Share of profit in subsidiaries after tax 0 0 -16,885 -62,484
Amortisation, depreciation, disposals and impairment losses 12,024 13,498 11,935 13,490
Tax on profit for the year 96,079 435,386 91,145 421,058
Exchange rate adjustments -565 -1,814 0 0
Total -22,894 524,845 -41,563 449,969
CASH FLOW STATEMENT - CHANGE IN WORKING CAPITAL
Group Parent
EUR '000 2023 2022 2023 2022
Change in inventories 1,147,764 -789,573 1,147,764 -789,573
Change in trade and other receivables 2,198,654 -1,293,754 2,212,073 -1,299,810
Change in fair value of derivatives 1,841,466 -2,266,204 1,843,426 -2,268,294
Change in trade and other payables -2,052,377 618,693 -2,114,658 667,285
Total 3,135,507 -3,730,838 3,088,605 -3,690,392
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 42
CAPITAL EMPLOYED
6.1 INTANGIBLE ASSETS
Contractual rights consist of power purchase agree-
ments (PPAs) and gas storage contracts which were ac-
quired in 2019 and 2020 from the ultimate Parent Com-
pany Equinor ASA. All the contracts were in operation at
the time of purchase by the Group. All contracts have
been acquired at a price reflecting fair value in the mar-
ket at the date of acquisition.
ACCOUNTING POLICIES
Intangible assets are measured at cost less accumu-
lated amortisation and less any accumulated impair-
ment losses.
Cost comprises the cost of acquisition and expenses di-
rectly related to the acquisition up until the time when
the asset is ready for use.
Software projects containing significant development
aspects are identified as intangible assets when they
are clearly defined, identifiable, provide a development
opportunity for the Group and future use is intended.
Costs related to projects that do not meet the criteria
for recognition in the balance sheet are recognised as
expenses in the income statement as incurred. Develop-
ment costs previously recognised as an expense are not
recognised as an asset in a subsequent period.
Development costs that are directly attributable to the
design and testing of identifiable and unique projects,
including software products controlled by the Group,
are recognised as intangible assets when the following
criteria are met:
• it is technically feasible to complete the soft-
ware and it will be available for use
• management intends to complete the software
and use or sell it
• there is an ability to use or sell the software
• it can be demonstrated how the software will
generate probable future economic benefits
• adequate technical, financial and other re-
sources needed to complete the development
and to use or sell the software are available
• the expenditure attributable to the software
during its development can be reliably mea-
sured
Costs associated with maintaining the assets are re-
cognised as an expense as and when incurred. Directly
attributable costs that are capitalised as part of the as-
sets include employee costs.
Capitalised development costs are recorded as intangi-
ble assets and amortised from the point at which the
asset is ready for use.
Amortisation based on cost reduced by any residual
value is calculated on a straight-line basis over the ex-
pected useful lives of the assets, which are:
Contractual rights: 4-18 years
Software: 3-5 years
2023 Group and Parent
EUR '000 Contractual rights Software
Software development
projects in progress
Cost at 1 January 94,618 28,754 1,167
Additions - internally developed 0 0 1,428
Additions 0 3,170 0
Disposals 0 -68 0
Transfers 0 89 -89
Cost at 31 December 94,618 31,945 2,506
Amortisation and impairment losses at 1 January 28,021 21,563 0
Amortisation for the year 8,343 1,326 0
Reversal of amortisations on disposals for the year 0 -60 0
Amortisation and impairment losses at 31 December 36,364 22,829 0
Carrying amount at 31 December 58,254 9,116 2,506
2022 Group and Parent
EUR '000 Contractual rights Software
Software development
projects in progress
Cost at 1 January 94,618 25,881 962
Additions - internally developed 0 0 821
Additions 0 2,219 38
Transfers 0 654 -654
Cost at 31 December 94,618 28,754 1,167
Amortisation and impairment losses at 1 January 19,678 18,264 0
Amortisation for the year 8,343 3,299 0
Amortisation and impairment losses at 31 December 28,021 21,563 0
Carrying amount at 31 December 66,597 7,191 1,167
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 43
6.1 INTANGIBLE ASSETS – CONTINUED
For the parent entity, a reserve is recognised in equity
for software projects that meet the criteria as develop-
ment projects. The amount recognised corresponds to
the amount capitalised as intangible assets for these
projects since 1 January 2016. The reserve is reduced
concurrently with amortisation of the software projects
and presented after tax.
Intangible assets are tested for impairment whenever
events or changes in circumstances indicate that the
carrying amount may not be recoverable. The key as-
sumptions used by management to determine whether
external or internal indicators of impairment on intangi-
ble assets exist are commodity prices, market outlook
and secondary foreign exchange rates.
An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recovera-
ble amount. The recoverable amount is the higher of an
asset’s fair value less costs of disposal and value in
use. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are se-
parately identifiable cash inflows which are largely in-
dependent of the cash inflows from other assets or
groups of assets (cash-generating units). Intangible as-
sets that suffered an impairment are reviewed for possi-
ble reversal of the impairment at the end of each report-
ing period.
Management assesses the risk of impairment of the
Group’s intangible assets. This requires judgment in re-
lation to the identification of cash-generating units
(CGUs) and other underlying assumptions used.
6.2 PROPERTY, PLANT AND EQUIPMENT
2023 Group
EUR '000
Other fixtures
and fittings, tools
and equipment
Right-of-use-assets
Leasehold
improvements
Cost at 1 January 6,951 6,957 2,034
Additions 810 1,593 187
Disposals -4 -99 0
Exchange rate adjustments 0 0 -15
Cost at 31 December 7,757 8,451 2,206
Depreciation and impairment losses at 1 January 3,271 4,122 1,963
Depreciation for the year 1,027 1,267 51
Exchange rate adjustments 0 0 -7
Reversal of depreciation on disposals for the year -4 -97 0
Depreciation and impairment losses at 31 December 4,294 5,292 2,007
Carrying amount at 31 December 3,463 3,159 199
2022 Group
EUR '000
Other fixtures
and fittings, tools
and equipment
Right-of-use-assets
Leasehold
improvements
Cost at 1 January 4,177 6,889 2,040
Additions 2,984 135 6
Disposals -209 -67 0
Exchange rate adjustments -1 0 -12
Cost at 31 December 6,951 6,957 2,034
Depreciation and impairment losses at 1 January 2,847 3,015 1,920
Depreciation for the year 633 1,174 49
Exchange rate adjustments 0 0 -6
Reversal of depreciation on disposals for the year -209 -67 0
Depreciation and impairment losses at 31 December 3,271 4,122 1,963
Carrying amount at 31 December 3,680 2,835 71
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 44
6.2 PROPERTY, PLANT AND EQUIPMENT – CONTINUED
Right-of-use assets with carrying amounts of EUR 3,159
thousand for the Group and EUR 1,777 for the Parent
(2022: EUR 2,835 thousand) are presented as ‘land and
buildings‘ and ‘other fixtures and fittings, tools and
equipment‘ in the balance sheet. Right-of-use assets in-
cluded in the category ‘land and buildings‘ amounted to
EUR 2,996 thousand for the Group and EUR 1,614 for the
Parent at 31 December 2023 (2022: EUR 2,690 thousand).
Right-of-use assets included in the category ‘other fix-
tures and fittings, tools and equipment‘ amounted to
EUR 163 thousand at 31 December 2023 (2022: EUR 145
thousand) for the Group and the Parent.
ACCOUNTING POLICIES
Individual components of property, plant and equip-
ment that have different useful lives are accounted for
as separate items, which are depreciated separately.
Property, plant and equipment is measured at cost less
accumulated depreciation and less any accumulated
impairment losses.
Cost comprises the cost of acquisition and expenses di-
rectly related to the acquisition up until the time when
the asset is ready for use.
Depreciation based on cost reduced by any residual
value is calculated on a straight-line basis over the ex-
pected useful lives of the assets, which are:
Other fixtures and fittings, tools and equipment: 3-5
years
Leasehold improvements: 2-5 years
Right-of-use assets: 2-10 years
In the case of changes in the depreciation period or the
residual value, the effect on the depreciation charges is
recognised prospectively as a change in accounting es-
timates if the amount is material.
Carrying amounts of property, plant and equipment are
reviewed on an annual basis to determine whether there
is any indication of impairment other than that ex-
pressed by depreciation. If so, an impairment test is
carried out to determine whether the recoverable
amount is lower than the carrying amount, and the asset
is written down to its lower recoverable amount.
The recoverable amount of the asset is calculated as
the higher of net selling price and value in use. When a
recoverable amount cannot be determined for the indi-
vidual asset, assets are assessed in the smallest group
of assets for which a reliable recoverable amount can
be determined based on an overall assessment.
2023 Parent
EUR '000
Other fixtures
and fittings, tools
and equipment
Right-of-use-assets
Leasehold
improvements
Cost at 1 January 6,895 6,956 1,996
Additions 702 137 0
Disposals 0 -99 0
Cost at 31 December 7,597 6,994 1,996
Depreciation and impairment losses at 1 January 3,240 4,121 1,946
Depreciation for the year 1,020 1,193 43
Reversal of depreciation on disposals for the year 0 -97 0
Depreciation and impairment losses at 31 December 4,260 5,217 1,989
Carrying amount at 31 December 3,337 1,777 7
2022 Parent
EUR '000
Other fixtures
and fittings, tools
and equipment
Right-of-use-assets
Leasehold
improvements
Cost at 1 January 4,142 6,889 1,996
Additions 2,953 134 0
Disposals -200 -67 0
Cost at 31 December 6,895 6,956 1,996
Depreciation and impairment losses at 1 January 2,812 3,015 1,899
Depreciation for the year 628 1,173 47
Reversal of depreciation on disposals for the year -200 -67 0
Depreciation and impairment losses at 31 December 3,240 4,121 1,946
Carrying amount at 31 December 3,655 2,835 50
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 45
6.3 LEASES
The Group has lease contracts for various items of of-
fice spaces, vehicles and other equipment used in its
operations. Leases of office spaces generally have
lease terms between five and ten years, while motor ve-
hicles and other equipment generally have lease terms
between one and four years.
The total cash outflows for leases amounted to EUR 1.6
million for the Group and the Parent in 2023 (2022: EUR
1.4 million for the Group and for the Parent).
ACCOUNTING POLICIES
The Group leases various offices, warehouses, equip-
ment and vehicles.
Leases are recognised as a right-of-use asset and a cor-
responding liability at the date at which the leased as-
set is available for use by the Group. Lease liabilities
are initially recognised at the present value of future
lease payments including payments from extension or
purchase options that are considered reasonably cer-
tain to be exercised.
The lease liability is measured using the implicit bor-
rowing rate in the contracts or, when this is not availa-
ble, the Group’s average incremental borrowing rate at
the date of inception. Lease assets are depreciated over
a 2-10-year period.
Short-term leases and leases of low value of EUR five
thousand and below are accounted for as low-value-as-
sets and recognised as expenses in the income state-
ment on a straight-line basis over the lease term.
Subsequent to initial measurement, the liability will be
reduced with payments made and increased with inte-
rest. Lease payments are allocated between principal
and finance cost. The finance cost is charged to profit
or loss over the lease period to produce a constant peri-
odic rate of interest on the remaining balance of the lia-
bility for each period. Lease assets are measured at
cost comprising the following:
• the amount of the initial measurement of lease
liability
• any lease payments made at or before the com-
mencement date
The lease assets are depreciated using the straight-line
method over the shorter of the expected lease term and
the useful life of the underlying asset. The lease assets
are tested for impairment whenever there is an indica-
tion that the assets may be impaired. No impairment in-
dicators were identified at 31 December 2023.
AMOUNTS RECOGNISED IN THE INCOME STATEMENT
Group Parent
EUR '000 2023 2022 2023 2022
Depreciation of right-of-use-assets 1,267 1,174 1,193 1,174
Interest on lease liabilities 128 66 47 66
Expenses relating to low-value leases 46 34 46 34
Total 1,441 1,274 1,286 1,274
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 46
6.4 INVESTMENTS IN SUBSIDIARIES
ACCOUNTING POLICIES
Share of profit in subsidiaries after tax
The separate line item ‘share of profit in subsidiaries af-
ter tax’ in the income statement includes the propor-
tionate share of the underlying entities’ profit after tax
for the year.
Investments in subsidiaries
The Parent Company has chosen to apply the equity
method as the measurement method, and investments in
subsidiaries are measured accordingly.
On initial recognition, investments in subsidiaries are
measured at cost plus transaction costs and included in
the line item ‘investments in subsidiaries’ in the balance
sheet.
The total net revaluation of investments in subsidiaries
is transferred upon distribution of profit to ‘reserve un-
der the equity method’ in equity. The reserve is reduced
by dividends distributed to the Parent Company and ad-
justed for other equity movements in the subsidiaries.
Subsidiaries with a negative net asset value are recog-
nised at EUR 0 and any receivables from them are writ-
ten down by the Parent Company’s share of the negative
net asset value. Any legal or constructive obligation of
the Parent Company to cover the negative balance of
the enterprise is recognised in provisions.
Investments in subsidiaries measured at net asset value
are subject to impairment test requirements if there is
any indication of impairment.
6.5 CURRENT ASSET INVESTMENTS
Current asset investment consists of time deposits with
original maturity date exceeding three months. The in-
vestments are made for the purpose of receiving cash
flows consisting solely of payments of principal and in-
terest to optimise the return of surplus liquidity and are
measured at amortised cost.
Parent
EUR '000 2023 2022
Cost at 1 January 9,281 3,824
Disposals 0 -10
Additions 62,387 5,467
Cost at 31 December 71,668 9,281
Value adjustments at 1 January 72,608 11,910
Exchange rate adjustments -573 -1,820
Net profit for the year 16,885 62,484
Dividend paid -30,173 0
Disposal for the year -5 34
Adjustments -4 0
Value adjustments at 31 December 58,738 72,608
Carrying amount at 31 December 130,406 81,889
The financial statements of the Parent Company include:
Name
Share capital
Danske Commodities Albania Sh.p.k. Albania tALL 276,125 100%
Danske Commodities APAC Pte. Ltd. Singapore tSGD 2,000 100%
Danske Commodities Australia Pty Limited Australia tAUD 0 100%
Danske Commodities BH d.o.o. Bosnia and Herzegovina tBAM 20,561 100%
Danske Commodities Comercializadora de Energia Ltda Brazil tBRL 288,000 100%
Danske Commodities Deutschland Gmbh Germany tEUR 25 100%
Danske Commodities Kosovo SH.P.K. Kosovo tEUR 11 100%
Danske Commodities DOOEL Skopje North Macedonia tMKD 55,822 100%
Danske Commodities Sweden AB Sweden tSEK 50 100%
Danske Commodities Turkey Enerji Ticaret A.Ş. Turkey tTRY 61,700 100%
Danske Commodities Ukraine LLC Ukraine tUAH 229 100%
Danske Commodities UK Limited United Kingdom tGBP 0 100%
Votes and
ownership
Place of registered office
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 47
TAX
7.1 TAX ON PROFIT FOR THE YEAR
ACCOUNTING POLICIES
Tax for the year consists of current tax for the year and
deferred tax for the year as well as adjustments of tax
and deferred tax relating to prior years. The tax attribu-
table to the profit for the year is recognised in the in-
come statement, whereas the tax attributable to equity
transactions is recognised directly in equity.
Any changes in deferred tax due to changes to tax rates
are recognised in the income statement.
The Parent Company is subject to the Danish rules on
compulsory joint taxation of the Danish group enter-
prises. The tax effect of the joint taxation is allocated
to enterprises showing profit or loss in proportion to
their taxable incomes. The jointly taxed enterprises
have adopted the on-account taxation scheme.
7.2 DEFERRED TAX
Deferred tax and provision for deferred tax comprise all
temporary differences between the carrying amount and
the tax base of intangible assets, property, plant and
equipment, receivables and short-term debt.
Group Parent
EUR '000 2023 2022 2023 2022
Current tax for the year 95,484 454,046 91,596 439,343
Deferred tax for the year 3,943 -18,797 2,828 -18,426
Adjustment of tax relating to prior years -69 1,764 0 1,769
Adjustment of deferred tax relating to prior years -3,279 -1,627 -3,279 -1,628
Total tax for the year 96,079 435,386 91,145 421,058
The total contribution for the year is specified as follows:
Profit for the year before tax 453,199 1,991,180 448,265 1,976,852
Adjustments (non-deductible) -2,198 -1,118 -19,059 -63,599
Tax on profit for the year 99,427 435,249 94,424 420,917
Effective tax rate 21.9% 21.9% 21.1% 21.3%
Tax on profit for the year can be explained as follows:
Calculated tax (22%) 99,704 438,060 98,618 434,907
Calculated tax in foreign subsidiaries in relation to 22% 207 -2,565 0 0
Non-deductible costs and non-taxable income -484 -246 -4,194 -13,990
Effective tax for the year 99,427 435,249 94,424 420,917
Group Parent
EUR '000 2023 2022 2023 2022
Deferred tax at 1 January -14,935 5,489 -13,925 6,129
Deferred tax recognised in profit for the year 664 -20,424 -451 -20,054
Deferred tax 31 December -14,271 -14,935 -14,376 -13,925
The items are recognised in the balance sheet as follows:
Deferred tax asset -14,376 -14,935 -14,376 -13,925
Deferred tax liability 105 0 0 0
Total -14,271 -14,935 -14,376 -13,925
Deferred tax can be explained as follows:
Property, plant and equipment -384 -485 -384 -485
Intangible assets 2,558 1,839 2,558 1,839
Current liabilities -3,128 -3,241 -3,128 -3,241
Derivative financial instruments -13,308 -12,735 -13,413 -11,788
Losses available for offsetting against future taxable income 0 -63 0 0
Other -9 -250 -9 -250
Total -14,271 -14,935 -14,376 -13,925
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 48
7.2 DEFERRED TAX – CONTINUED
ACCOUNTING POLICIES
Current tax receivables and liabilities
Current tax receivables and liabilities are recognised in
the balance sheet at the amount calculated on the ba-
sis of the expected taxable income for the year adjusted
for tax on taxable incomes for prior years and tax paid
on account. Tax receivables and liabilities are offset if
there is a legally enforceable right of set-off and an in-
tention to settle on a net basis or simultaneously.
Joint taxation contributions payable and receivable are
recognised in the balance sheet as corporation tax re-
ceivable or corporation tax payable.
Deferred tax assets and liabilities
Deferred tax is recognised in respect of all temporary
differences between the carrying amount and the tax
base of assets and liabilities.
Deferred tax assets, including the tax base of tax loss
carry-forwards, are measured at the value at which the
asset is expected to be realised, either by elimination in
tax on future earnings or by set-off against deferred tax
liabilities.
Deferred tax assets and liabilities are offset within the
same legal tax entity and jurisdiction.
Deferred tax is measured according to the tax rules and
at the tax rates applicable in the respective countries
at the balance sheet date when the deferred tax is ex-
pected to crystallise as current tax.
OTHER NOTES
8.1 AUDITORS’ FEES
Fees to statutory auditors comprise fees to auditors ap-
pointed by the Company at the Annual General Meeting.
Assurance engagements comprise of services related to
other reporting requirements to group auditors.
8.2 OTHER COMMITMENTS AND CONTINGENT LIABILITIES
GAS STORAGES
The Group has entered into various long-term agree-
ments for storage of gas. The agreements ensure the
rights to the capacity or volumes in question, but also
impose on the Group the obligation to pay for the
agreed-upon service, irrespective of actual use.
The terms of the contracts vary, with durations of up to
six years.
GUARANTEES
The Parent Company has provided guarantees and secu-
rities for related parties to third parties with a carrying
amount of EUR 27,341 thousand (2022: EUR 10,290 thou-
sand).
OTHER COMMITMENTS
The Group has a lease contract relating to a new office
building that has not yet commenced as of 31 December
2023. The future lease payments for the non-cancellable
lease contract are EUR 0 million within one year, EUR
12,497 million within five years and EUR 11,621 million
thereafter.
The Danish group enterprises are jointly and severally li-
able for tax on the taxable income, etc. in the joint tax-
ation. Danske Commodities A/S is the administration
company of the jointly taxed companies. Furthermore,
the Danish group enterprises are jointly and severally li-
able for Danish withholding taxes such as tax on divi-
dend, royalty and interests. Any subsequent adjustments
to corporation tax and withholding taxes may increase
the Company’s obligations.
Group Parent
EUR '000 2023 2022 2023 2022
Statutory audit 1,273 1,447 1,273 1,447
Assurance engagements 177 141 177 141
Total 1,450 1,588 1,450 1,588
MATURITY OF GAS STORAGE AGREEMENTS
Group and Parent
EUR '000
2024 91,749
2025 24,647
2026 8,248
2027 6,388
2028 5,851
2029 1,447
Annual Report 2023 NOTES TO FINANCIAL STATEMENTS 49
8.3 STANDARDS ISSUED BUT NOT YET EFFECTIVE
The new and amended standards and interpretations
that are issued, but not yet effective, up to the date of
issuance of the Group’s financial statements are dis-
closed below. The Group intends to adopt these new and
amended standards and interpretations, if applicable,
when they become effective.
AMENDMENTS TO IAS 1: CLASSIFICATION OF LIABILITIES
AS CURRENT OR NON-CURRENT
In January 2020 and October 2022, the IASB issued
amendments to paragraphs 69 to 76 of IAS 1 to specify
the requirements for classifying liabilities as current or
non-current. The amendments clarify:
• what is meant by a right to defer settlement
• that a right to defer must exist at the end of the
reporting period
• that classification is unaffected by the likeli-
hood that an entity will exercise its deferral
right
• that only if an embedded derivative in a con-
vertible liability is itself an equity instrument
would the terms of a liability not impact its
classification
In addition, a requirement has been introduced to re-
quire disclosure when a liability arising from a loan
agreement is classified as non-current and the entity’s
right to defer settlement is contingent on compliance
with future covenants within twelve months.
The amendments are effective for annual reporting peri-
ods beginning on or after 1 January 2024 and must be
applied retrospectively. The Group is currently as-
sessing the impact the amendments will have on current
practice and whether existing loan agreements may re-
quire renegotiation.
The amendments are not expected to have a material
impact on the Group’s financial statements.
8.4 EVENTS AFTER THE BALANCE SHEET DATE
No events have occurred since the balance sheet date
which could materially impact the Group or the Parent
Company’s financial position.
8.5 DEFINITIONS
DEFINITIONS OF FINANCIAL RATIOS
Average number of employees: calculated as average number of full-time employees
Number of employees, end of year: calculated as number of employees at end of year
OTHER DEFINITIONS
Danske Commodities refers to the Group.
Danske Commodities A/S refers to the Parent Company.
IFRS is used synonymously with IFRS® Accounting Standards.
Equity ratio
=
Equity x 100
Total assets
Return on equity
=
Net profit for the year x 100
Average equity
Scalability
=
EBIT x 100
Gross profit
Return on capital employed
=
EBIT x 100
Average total equity plus net interest bearing debt