Energy A/S
Margrethepladsen 4, 3rd floor
•
DK-8000 Aarhus
•
CVR No 38 17 51 30
Annual Report 2022
A new world of energy
Contents
MANAGEMENT‘S REVIEW
4 MFT Energy at a glance
5 Our global presence
6 Performance highlights 2022
7 Financial highlights and key ratios 2022
8 Letter from the CEO and Chairman
11 Business highlights in 2022
Strategy
13 Strategy 2023-2024
20 Talent
22 Technology
Business
25 Business development
26 MFT Energy power
28 MFT Energy gas
Performance
31 Financial review 2022
Corporate matters
35 ESG
39 Risk management
44 Board of Directors
45 Executive Leadership
FINANCIAL STATEMENTS
47 Income statement and
comprehensive income
48 Balance sheet
49 Statement of cash flows
50 Statement of changes in equity
52 Notes to the financial statements
STATEMENTS
92 Management’s statement
93 Independent auditor’s report
Follow us
www.mft-energy.com
LETTER FROM THE CEO AND CHAIRMAN
We have reached many important milestones in
2022 – a year in which the need for affordable,
secure, and sustainable energy became even more
prevalent.
⟶
⟶
⟶
Per Hjorth
Poulsen, CRO
Bo Palmgren, Co-CEO
Torben Nordal Clausen, Group CEO
and Eivind Kolding, Chairman of the Board
STRATEGY
The goal of our new growth strategy is to become a
leading global energy trader, and we will continue to
invest in talent, technology and platform excellence
to achieve this position.
RISK MANAGEMENT
Trading activities are closely monitored through a
systematic risk management approach to ensure
alignment with our risk appetite as defined by the
Board of Directors.
Annual Report 2022MFT Energy A/S
3
EXCHANGE
MFT Energy
at a glance
At MFT Energy, we are experts in trading power
and gas. We match the interests of supply and
demand in terms of timing and place of delivery.
Our 10 specialized Trading Teams apply in-
depth market knowledge and comprehensive
data sets to analyze, build and execute their
trading strategies. MFT Energy is active in
Intraday, Day Ahead and Forward trading and
focused on both physical and financial products.
Established in 2016, MFT Energy is head-
quartered in Aarhus, Denmark, and by the end
of 2022, we had 130 employees working out of
our offices in Europe, Türkiye, Singapore, and
Australia.
Demand
POWER AND GAS TRADING
CONSUMERS
MAJOR CONSUMERS
Supply
POWER
Renewables Power plant
Energy
Wholesale trading
of power and gas
GAS
Annual Report 2022MFT Energy A/S
4
Trading power
Trading power and gas Trading gas
Head office Remote workstation Office
In 2022, MFT Energy expanded the
number of trading markets to 36, including
Georgia, Japan, Latvia, Lithuania, North
Macedonia, and Poland. MFT Energy trades
both power and gas in 13 markets. We are
active on 21 exchanges.
Our global
presence
36
Trading markets
+6 in 2022
21
Exchanges
+2 in 2022
347 TWh*
Traded
+70% in 2022
* TWh (Terawatt-hours) are used in measuring quantities of electricity or heat produced. 1 TWh equals 1,000,000,000
kilowatt-hours (kWh). In 2022, traded volumes at MFT Energy were 347 TWh, corresponding to almost 10 times the
Danish electricity consumption of 35,2 TWh in 2022. Source: GreenPowerDenmark
Annual Report 2022MFT Energy A/S
5
Performance highlights 2022
Gross profit and gross margin, 2018 - 2022 EBIT and scalability, 2018 - 2022 Equity and return on equity, 2018 - 2022
Gross profit
Gross margin
EBIT
Scalability (EBIT as a percentage of gross profit)
Equity
Return on equity
* The implementation of IFRS as from January 1, 2020 had an impact on the financial statements and key ratios for 2020 and onwards. Comparative figures for 2018 and 2019 have not been restated and were prepared in accordance with Danish GAAP.
In 2022, MFT Energy delivered solid results in an extraordinary market situation with high volatility. Our scalable business platform combined with our
solid risk management setup secured a gross profit of EUR 641.9m and EBIT of EUR 576.2m, corresponding to a scalability of 89.8%.
0
100
200
300
400
500
600
700
Revenue, 2018 - 2022
Revenue type 1
Revenue type 2
2020 2021 20222019*2018*
EURm
%
0
1
2
3
4
5
6
7
8
9
EBIT & Scalability, 2018 - 2021
Revenue type 1
Revenue type 2
2020 202220212019*2018*
EURm
%
0
100
200
300
400
500
600
700
0
10
20
30
40
50
60
70
80
90
100
Equity and ROE, 2018 - 2021
Revenue type 1
Revenue type 2
2020 2021 20222019*2018*
EURm
%
0
100
200
300
400
500
600
0
20
40
60
80
100
120
140
160
180
Annual Report 2022MFT Energy A/S
6
Financial highlights and key ratios 2022
GROUP
EUR ‘000 2022 2021 2020 2019* 2018*
Income statement
Revenue 7,875 ,685 1,338,762 173,480 115,960 53,729
Gross profit 641,864 83,702 13,408 3,877 2,992
Profit before financial income and expenses
and tax (EBIT) 576,194 65,390 7,815 2,221 2,325
Net financials -3,065 -1,573 -740 -256 -193
Profit before tax (EBT) 573,129 63,817 7,075 1,965 2,131
Profit for the year 446,787 49,907 5,524 1,525 1,850
Profit for the year attributable to
- Shareholders in MFT Energy A/S 260,214 34,587 4,703 1,442 1,816
- Non-controlling interests 186,524 15,320 821 83 34
Balance sheet
Balance sheet total 910,263 481,328 41,716 11,043 6,518
Equity 483,050 61,409 9,582 3,925 2,332
Equity attributable to
- Shareholders in MFT Energy A/S 288,778 45,000 8,493 3,789 2,297
- Non-controlling interest 194,272 16,409 1,089 136 35
Current asset investments 348,888 0 0 0 0
Cash and cash equivalents 134,344 34,511 12,618 3,382 4,434
GROUP
EUR ‘000 2022 2021 2020 2019* 2018*
Cash flows
Cash flows from operating activities 476,936 22,494 5,176 -2,705 2,733
Cash flows from investing activities -349,067 -977 -280 -140 -35
- hereof investments in intangible assets 0 0 0 76 0
- hereof investments in property, plant and equipment 115 60 82 62 7
Cash flows from financing activities -28,036 376 5,707 1,794 -550
Change in cash and cash equivalents for the year 99,833 21,893 10,603 -1,051 2,148
Number of employees - average for the year 94 70 34 22 9
Key ratios
Gross margin 8.1% 6.3% 7.7% 3.3% 5.6%
EBIT margin 7.3% 4.9% 4.5% 1.9% 4.3%
Scalability 89.8% 78.1% 58.3% 57.3% 77.7 %
Equity ratio 53.1% 12.8% 23.0% 35.5% 35.8%
Return on equity 164.1% 140.6% 81.8% 48.7% 110.0%
For definitions of financial key figures and ratios, please refer to note 31.
* The implementation of IFRS as from January 1, 2020 had an impact on the financial statements and key ratios for 2020 and onwards.
Comparative figures for 2018 and 2019 have not been restated and are presented in accordance with Danish GAAP.
Annual Report 2022MFT Energy A/S
7
Many years of experience and our
strict focus on risk management led us
successfully through yet another year of
fast-changing energy markets.
In 2022, we delivered solid results and
reached many important milestones
by expanding our global footprint and
strengthening our organization. We consider
it a privilege to be doing business in a new
world of energy using our knowledge every
single day to make the power and gas
markets more efficient and by contributing
to the green transition.
Letter from the
CEO and Chairman
Torben Nordal Clausen
Group CEO
Eivind Kolding
Chairman of the Board
Annual Report 2022MFT Energy A/S
8
A new world of energy
opportunities, shift focus, and allocate funds
promptly with acceptable risk. This is also reflected
in the 2022 performance.
Strong performance in 2022
We delivered very solid results in 2022 due to the
close collaboration between our Trading and Risk
Management Teams. Liquidity and equity require-
ments have been controlled and managed on a
daily basis.
Traded volumes increased by 70% to 347 TWh in
2022 delivering a strong gross profit of EUR 642m
(2021: EUR 84m) and EBIT of EUR 576m (2021: EUR
65m).
In 2022, around 20% of our trades involved the use
of machine learning or algorithms, providing us with
a more scalable trading model. As a result, scalabil-
ity, measured as our ability to convert gross profit
to EBIT, increased to 90% (2021: 78%).
Our financial robustness was also strengthened in
2022 with equity rising to EUR 483m at the end of
of global power generation
is expected to be
renewables by 2050
85%
Navigating volatile markets
In 2022, the geopolitical realities led to rising
energy prices and a reversal of the gas market. Our
Gas Team played a vital role throughout the year
moving gas volume to where it was most needed
in Europe. We also have numerous examples from
our Power Teams distributing power across borders
from areas with a surplus to areas with shortage.
The need for affordable, secure, and sustainable
energy has become more prevalent, and we expect
the energy transition towards a sustainable energy
production will be accelerated in many countries.
According to McKinsey, 85% of the global power
generation is expected to be renewables by 2050
(2019: 19%). This will lead to a continued high level
of volatility due to the unpredictability of renew-
able energy. In addition, we expect the general
demand for renewable energy to increase sharply
driven by a significant increase in electrification.
Market trends support multiple growth oppor-
tunities ahead of us due to our strong ability to
respond swiftly to market volatility, identify trading
“We have reached many
important milestones in
2022 and I can proudly say
that it all comes down to
our very special culture and
skilled employees that make
us go the extra mile, focus
on our responsibilities, and
deliver as promised.”
Torben Nordal Clausen
Group CEO
Building a solid foundation prepared for all kinds of
fluctuations was key to the just completed three-
year strategy we were pursuing in 2020-2022. We
have exceeded our most ambitious expectations
establishing a global presence and delivering
strong financial results. We are ready to become a
leading global energy trader!
Source: McKinsey & Company, Global Energy Perspective 2022
Annual Report 2022MFT Energy A/S
9
In 2022, we decided to map our Scope 1, 2, and 3
emissions and undertake a double materiality as-
sessment in compliance with the EU’s forthcoming
European Sustainability Reporting Standards. MFT
Energy is among the first energy traders to do so.
Outlook for 2023
We have seen signs of moderation in the energy
markets during the first half of 2023. However, the
underlying supply issues that drove volatility in
2022 are still present. We are prepared to navigate
in uncertain energy markets and will exploit both
the opportunities and handle the risks while deliv-
ering on our goals set out in our new strategy.
On behalf of the Executive Leadership Team and
Board of Directors, we would like to thank all our
talented and loyal colleagues for a strong team
effort in 2022. We are now entering a new era with
an even bigger global foothold.
Torben Nordal Clausen Eivind Kolding
Group CEO Chairman of the Board
been important to MFT Energy's Board of Direc-
tors that a well-planned management change was
carried out.
Becoming a leading energy trader globally
At the end of 2022, we launched our new growth
strategy for 2023-2024, with the goal of becoming
a leading global energy trader.
We are well prepared to capture the global market
potential with our presence in 38 markets across
Europe, North America, and Asia-Pacific. In 2022,
we entered six new markets, and in 2023 an addi-
tional two markets. With a structured approach, we
will go deeper into all our markets, and we will still
have the possibility to add new geographies.
We are also ready to move from only power and
gas trading to including trading with enviromentals
such as guarantee of origin certificates.
Our unique, scalable platform and partnership
model remain a cornerstone attracting entrepre-
neurial talent by providing capital, market access,
as well as software and technology that are not
easily available elsewhere.
Sustainability as a growth driver
As part of our strategic focus, we are anchoring
our everyday trading activities in an overall goal of
making a positive impact on both people and the
environment.
the year (year-end 2021: EUR 61m). Our high sol-
vency ratio and cash reserves enable us to remain
self-funded throughout our current strategy period.
Strengthening the organization
At MFT Energy, we aim to be the best place for the
best people. Our highly skilled employees carry our
unique culture and drive our performance. During
the year, we welcomed many new colleagues,
growing the organization by 49% from 87 to 130
employees. It was a milestone and a great day of
celebration when we reached 100 employees.
By offering MFT Energy employees the opportuni-
ty to become a partner, we emphasize that great
results are created together - in a team effort and
with common goals and a shared vision. At the be-
ginning of 2023, we were very pleased to announce
that an additional 16 employees had been promot-
ed, bringing the total number of partners to 62.
During the year, a professional Board of Directors
was established chaired by Eivind Kolding. The
strengthening of the overall governance at MFT
Energy by important competencies within strate-
gy and compliance is essential for our continued
development.
In November 2022, we also announced the appoint-
ment of Bo Palmgren as Co-CEO of MFT Energy. Bo
will take over the CEO responsibility as per June 1,
2023, and drive our new two-year strategy. It has
“Compliance, risk
management and framing
MFT Energy’s new growth
strategy have been of
highest priority to the
Board of Directors. We
are confident that MFT
Energy has what it takes
to become a leading
global energy trader.”
Eivind Kolding
Chairman of the Board
Annual Report 2022MFT Energy A/S
10
Business highlights in 2022
What a year! We entered new markets, formalized
our ESG approach, strengthened our business
platform globally, executed on our strategy for the
USA and Asia-Pacific, and welcomed a new Co-CEO.
Partner
announcements
10 employees promoted
to partner
Implementing
new technologies
Technology Team
strengthened by
8 employees
ERP
system upgrade
Streamlining business
functions globally
North American
trading expanded
Now includes both financial
and physical trading
ESG
project initiated
Strengthening our approach to
sustainability
Increased
focus on risk
management
Risk Team
strengthend by 5
employees
Professional Board
of Directors elected
Eivind Kolding, Chairman
Simon Rathjen, D eput y Chair
Las se Pilgaard, memb er
Heidi Frederikke Sigdal, member
Per Schnack, member
Dec 2022
Gas price
Jan 2022
New markets
New strategy
2023-2024
To become a global
leader in 2024
Co-CEO appointed
Bo Palmgren as
Co-CEO with Torben
Nordal Clausen
Poland Lithuania Latvia Georgia Japan North Marcedonia
Source: Refinitiv: TTF front month January 1 - December 27, 2022
Annual Report 2022MFT Energy A/S
11
Strategy
Becoming a leading global energy trader
We have pursued our 2020-2022
strategy with great success,
building a global presence and a
solid platform. At the end of 2022,
we launched our new strategy
2023-2024 focusing on exploiting
and sizing our opportunities in
existing markets and we will also
continue to add new geographies
as well as environmentals to
our trading portfolio. Profitable
sustainable growth will always
be imperative to our ambition of
becoming a leading global energy
trader.
Leveraging our strong foundation
2022 was the last year of our three-year growth
strategy, 2020-2022, focusing first on “Strength-
ening the platform” and on “Growing the business”
in the two following years by expanding all our
Trading and Support Teams as well as our global
market presence.
It has required a disciplined approach to exploit the
large business opportunities and at the same time
professionalize and build a strong trading engine,
but we can proudly look back on a fantastic period
delivering on all our goals and exceeding our most
ambitious expectations.
In the past three years, we have grown:
• Our market presence from 24 in 2019 to 36
markets in 2022
• Our people from 29 in 2019 to 130 employees
in 2022
• Our partners from 14 in 2019 to 46 partners in
2022
• Our teams from 6 in 2019 to 10 teams in 2022
• Our equity from EUR 4m in 2019 to EUR 483m
in 2022
MFT Energy’s core strengths
• Recognized international energy trader
• In-depth trading expertise
• Strong risk management setup
• Skilled and dedicated employees
• Highly scalable business platform
2020-2022
2023-2024
EXPANDING THE BUSINESS BECOMING TRULY GLOBAL
• European roll-out of power business model
• Expansion into gas trading
• Building of foundation for expansion outside
Europe
• Implementation of advanced IT systems and focus
on scalability
• Strengthening position as global trading hub
• Aiming for growth and expansion in key markets
• Expanding and scaling business model into new
products such as environmentals
• Increasing algorithmic trading and sophisticated
data handling for analytics
Our financial performance over the years confirms
the robustness and scalability of our platform by
handling significant growth rates while at the same
time improving profitability.
At the beginning of 2023, MFT Energy had a global
presence with offices and workstations in Europe,
Türkiye, the USA, Singapore, and Australia. With
this starting point and in consideratation of our
scalable business platform, we are confident that
we are ready to bring MFT Energy to the next level
of becoming a leading global energy trader – a truly
global energy house.
Annual Report 2022MFT Energy A/S
13
Platform excellence
MFT Energy has built a successful business plat-
form based on a highly scalable, tech-driven and
asset-light business model.
Since our establishment in 2016, we have continu-
ously invested in platform excellence – the core of
our business – and we will continue to optimize the
platform and our processes. The platform includes
risk management, finance, technology, legal assis-
tance, and market access – in other words: all the
support our Trading Teams need.
By using in-depth market knowledge, comprehen-
sive data sets, automation, analytical capabilities,
and capital, MFT Energy turns knowledge and data
into trading strategies and business opportunities,
and our strategic focus is to expand all operating
activities within trading and support to be available
24/ 7.
We know that our systematic approach, constant
focus on documentation and compliance have
ensured a high level of governance. Our overall
ability to manage the implicit risk of trading in the
power and gas markets across borders has given us
a proven track record and a unique ability to create
value.
Strategic enablers Operating activities Value creation
Talent
Attracting and developing talent
Platform excellence
Scalability through partnership model
Technology
Advanced automation and
algorithmic trading
Markets
Effective markets and competitive prices
Financial
Return to partners and shareholders
Society
Creating jobs, tax payments
and facilitating the green transition
Support Teams
Trading Teams
Intraday
Financial
US
CWE
Physical
North
America
UK SingaporeNordic Australia
East
Europe
Gas
Power Gas
Annual Report 2022MFT Energy A/S
14
Trading engine
Talent - Platform excellence - Technology
New two-year strategy 2023-2024
MFT Energy is well prepared to capture the op-
portunities in the global energy markets. With
a structured approach, we have the potential to
bring MFT Energy to the next level and gain market
shares and become a leading global energy trader
within both power, gas and environmentals.
At the end of 2022, we launched our new growth
strategy, 2023-2024, which focuses on utilizing our
current global presence and our strong business
platform to go deeper into the regions and markets
where we are already established, and we will still
have the option to add new geographies. We are
also ready to expand our playing field and move
from only power and gas trading to also trading in
environmentals.
The transition from a primarily regional player to a
truly global and independent energy trader will be
anchored in:
• Strengthening the position as a global trading
hub
• Targeted growth and expansion in key markets
• Expanding the trading platform
• Best-in-class workplace
2024 vision
Strategic
aspirations
Strategic
enablers
MFT Energy
values
Grit - Hunger - Unity
Strengthening the position
as global trading hub
By strengthening our position in North
America and Asia-Pacific to our level in
Europe
Expanding the trading platform
By adding enviromentals to the portfolio
Targeted growth and expansion
in key markets
By exploiting the potential of existing and
new markets in a structured manner
Best-in-class workplace
By ensuring the best place for the best
people
Global energy house
Annual Report 2022MFT Energy A/S
16
Strengthening the position as
a global trading hub
At the end of 2022, we were established in 36 mar-
kets in Europe, North America and Asia-Pacific, and
in the coming years, we will exploit the potential in
each of these markets. We have only been opera-
tional for a short time in several of these markets,
and we know by experience that it takes years to
reach the full potential.
To become a leading global energy trader, we will also
be focusing on identifying new markets based on our
strict selection criteria. We have extensive experience
in carefully selecting the right markets at the right
international profile by increasing our share of
traded volume outside of Europe from 2.3% to 10%.
In 2024, we expect to have 8 international offices
up from 4 at the end of 2022.
time. With our strong platform setup, we will gain mar-
ket share in the rapidly growing energy markets.
Our overall goal is to almost double our share of
traded volume of global power and gas consump-
tion from 0.6% in 2022 to 1% in 2024. We have
also set a goal of becoming more balanced in our
MFT Energy’s global footprint 2022 Strategic enablers MFT Energy’s 2024 vision
0.6% MFT Energy-traded volume of global
power and gas consumption
2.3% MFT Energy-traded volume outside of Europe
20% Algorithmic share of power trading
4 Global offices
Trading areas
Talent
Focus on training, development and moving
talent geographically
Platform excellence
Scaling the support platform
to be available 24/7 to traders
Technology
Leverage tech platform to e.g. increase share
of algorithmic trading
1.0% MFT Energy-traded volume of global
power and gas consumption
10% MFT Energy-traded volume outside of Europe
40% Algorithmic share of trading
8 Global offices
Trading areas
Power PowerGas Gas Environmentals
Annual Report 2022MFT Energy A/S
17
Targeted growth and expansion
in key markets
Growth initiatives to go deeper into the existing
markets as well as new untapped geographies have
been defined, and our strong track record from
Europe can be used in North America and Asia-Pa-
cific. We are also ready to expand our playing field
and move from only power and gas trading to also
trading in environmentals.
In North America, we will expand existing power
trading activities to the rest of North America en-
tering the Canadian market to create cross-border
possibilities with the USA. We will also evaluate the
possibility of entering the gas market in the USA.
In Europe, we will be taking a larger share of wallet
by expanding our Trading Teams and volumes in
existing markets, and we also plan to enter envi-
ronmental trading. In addition, we will leverage our
tech platform to increase the share of algorithmic
trading from 20% to 40%.
In the Asia-Pacific region, we will capture un-
tapped potential. As we entered Australia in 2022,
we are now focusing on expanding our power trad-
ing to Japan, where MFT Energy can readily apply
its knowledge base.
Expanding the trading platform
with environmentals
MFT Energy will support the green transition by
strategically adding renewable products like EU
allowances (EUAs) and guarantees of origin (GoOs)
to the trading portfolio. These products are start-
ing to be organized on the markets we trade in,
Power demand is
expected to triple
towards 2050, with
renewables to fill
a greater role
... leading to more
power needing
to be transferred
between countries
... driving increased
unpredictability
in national energy
markets...
and we expect this area to become more liquid
over time.
We have been active in the market for environ-
mentals for some time, but going forward, we will
include environmentals as a prioritized trading
area. The timing is right and MFT Energy has the
distribution in place at the same time as the price
setting of power and gas is highly influenced by
environmentals.
Best-in-class workplace
MFT Energy’s potential can only be unleashed by
the efforts of highly skilled employees around the
world. They are the true engine in our trading activ-
ities and value-creation moving the company in the
right, successful direction.
By the end of 2024, we expect the organization
to have grown to 175+ employees working from 8
offices and different locations in the world. This
means we will invest in narrowing any culture gaps
across locations and make sure that the whole
organization takes on the role of facilitating values.
We believe in togetherness, and this is also re-
flected in our unique partnership model creating a
Annual Report 2022MFT Energy A/S
18
competitive advantage and a win-win approach for
scaling MFT Energy even further.
A new world of energy
The global energy markets are undergoing structur-
al changes these years. The demand for power is
expected to increase significantly due to electrifi-
cation and renewables are expected to become the
dominant energy source to meet energy needs and
climate goals.
As renewables take up a larger share, and ener-
gy consumption grows, supply and demand will
more often be out of balance because of the
weather-dependent assets such as wind and solar
power. Thus, we will be experiencing increased
volatility creating a growing need for power and
gas trading to match demand and supply in an
efficient way.
We expect that the robust decarbonization agen-
da, the global interconnectivity, and the increas-
ing penetration of renewables will be driving the
development. In short, a new world of energy is
being shaped.
Some of the market trends as we see them are: Ready for the future
Based on the expected strong market growth and
our strength profile, we see good opportunities and
are ready for the future - a future that we will also
use to support the green agenda and be sustain-
able in everything we do with clear sustainability
goals. The way forward will be to invest in talent,
platform excellence, and technology making it
possible to go deeper in existing markets as well as
new untapped possibilities in North America and
Asia-Pacific.
Energy transition
Renewables are expected to represent
85% of global power generation in 2050
Demand for power
Driven by a significant increase in electri-
fication, demand for power is expected to
triple towards 2050
Gas consumption
Gas consumption for power generation
is projected to increase by ~30% towards
2035
Increased unpredictability
A growing share of renewables will elevate
volatility and supply/demand differences
across markets
Market liberalization
New market places are opening as part of
their transition into renewables
We have a clear strategy
to use our experience from
Europe to grow in Asia-
Pacific and North America.
The offices are well
underway in Singapore
and Australia, so now it
is time to further exploit
the North American
opportunities.
Simon Rathjen
CVO
Source: McKinsey & Company, Global Energy Perspective 2022
Annual Report 2022MFT Energy A/S
19
Talent
Attracting and
developing talent
53
employees onboarded in 2022
MFT Energy is a place where people come togeth-
er to make the most of their talents and create
amazing results in a challenging, empowering, and
fun work environment.
We are always focused on hiring the best candi-
date for the job, regardless of geography, gender
or nationality and the MFT Workspace Model
allows us to do so as our employees can work
remotely, providing us a global reach of talents.
At the end of 2022, we counted 25 nationalities
working out of 13 countries.
We are proud of having onboarded 53 new employ-
ees in 2022 as we expanded our organization to
130 employees by the end of 2022.
High employee satisfaction
MFT Energy has a high level of employee satisfac-
tion as reflected in a low employee turnover rate of
8.1% in 2022. The feedback we get is good working
environment, good opportunities for development
MFT Energy has a clear HR
aspiration – we want to be the
best place for the best people.
We have a unique culture with a
common focus on creating great
results together and we will use
this to attract and develop talent
and competencies.
MFT Energy’s HR
aspiration is clear - we
want to be the best
place for the best
people!
Anja Linneberg
Director, HR & Communication
and great diversified working environment not only
in respect of nationalities but also age, skills and
gender.
At MFT Energy, 22% of the employees have 8+
years of industry experience and a further 41%
have between two and eight years of industry
experience. It is important to MFT Energy that our
Trading and Support Teams have comprehensive
industry seniority.
Making culture a priority
At MFT Energy, culture is a strategic priority. We
strive to facilitate an innovative, ambitious, and
inclusive work environment that allows people to
make the most of their talent.
Our culture is solidly rooted in an entrepreneur-
ial mindset backed by a visionary idea that all
employees should be able to own a part of the
company. We call this the MFT Partnership Model.
Annual Report 2022MFT Energy A/S
20
In 2022, we welcomed 10 new partners as owners
of the company, and by the end of 2022, our part-
ner number reached 46 out of 130 employees.
With an ambition to be at the forefront of modern
work-life, we offer our employees a professional
career that respects family life, with the ability
to work remotely and benefits that include paid
maternity/paternity leave, health insurance, and
pension schemes.
Our organizational structure is flat, and colleagues
and leaders work together in an inclusive and
respectful environment.
Learning and development
MFT Energy has a dedicated focus on developing
our talented people. We continuously offer next
level training for our specialists and leaders. Our
company is built by specialists; 73% of our people
have a Master's, or Ph.D. degree and we have a
strategic focal point to further develop our spe-
cialists and leaders and actively contribute to their
learning journey.
Our Graduate Program, a 2-year learning journey,
has been a great success in relation to visibility at
important educational institutions offering in-depth
knowledge of the energy markets on an interna-
tional scale.
Highly skilled employees
by the end of 2022
13025
Nationalities in a truly
global organization
8.1%
Low turnover rate
by the end of 2022
31 years
Average age
in 2022
Moving our talents around the world
MFT Energy is a truly international organiza-
tion adding new offices and trading activities in
Asia-Pacific and the USA. To support that, we
launched a new concept called MFT Globetrotters
for the purpose of moving our talents around the
world. This will help us acquire global understand-
ing, streamline operations, gain new perspectives
and bolster MFT Energy’s global presence.
Digitalized HR processes
We reached a new level of maturity in 2022 with
the implementation of structured and digitalized
HR processes, automated master data handling,
and solid onboarding methods.
We have now secured a robust and scalable HR
platform ready to mitigate risks and further sup-
port MFT Energy in becoming a leading global
energy trader by 2024.
Our 2023-2024 strategy
In the coming years, we will have a constant focus
on developing our offerings to attract and re-
tain talents as we expect to grow the number of
employees to more than 175 and at the same time
double our global offices from 4 to 8 by 2024.
31
32
30
Annual Report 2022MFT Energy A/S
21
Technology
Advanced automation
and algorithmic trading
Technology is one of MFT Energy’s strategy ena-
blers and by leveraging the knowledge of advanced
automation, algorithmic trading, and machine
learning competencies, we will be able to exploit
and unfold the growth possibilities much faster and
in a controlled manner.
MFT Energy executes thousands of trades every
day across markets, interacting with parties trading
on energy exchanges.
Expanding our technology expertise
New markets, new Trading Teams and many new
employees were added to the organization in 2022,
and that also goes for the Technology Team with
the employment of an additional 8 experts within
data, software, and technology, bringing the core
Technology Team to a total of 13 employees by the
end of 2022.
MFT Energy has an innovation-led IT organization
with a clear focus on R&D and service excellence.
With the introduction of a Center of Excellence
in 2022, our ambition is to provide the necessary
training and development to our tech profiles in the
Trading and Support Teams allowing them to stay
up to date with the latest policies and technologies.
As such, our data scientists and quant analysts in
the various Trading Teams are continuously being
educated and trained by the core Technology Team
to enable them to utilize the technology platform
creating solutions for their specific energy domain.
All together, more than 25 tech profiles are em-
ployed in the Trading Teams.
MFT Energy has a cutting-edge
technology platform. We have
automated most of the trading
process and by employing
algorithmic trading, we have
increased our execution speed
and strengthened our decision-
making, which is pivotal for our
performance globally. By 2024,
we expect algorithmic trading
will be representing 40% of
total volume traded.
+25
tech profiles in our
Trading Teams in 2022
The strength and success
of MFT Energy’s trading
platform is anchored in
our ongoing software
development in close and
effective collaboration with
our centralized teams and
quant analysts.
Jacob Vald Guldberg
CIO
Annual Report 2022MFT Energy A/S
22
Data are a core asset
In 2022, we expanded our organization by a Data
Value Team to be on the forefront of leveraging
data to the best possible extent. We want to
ensure that our leverage of data in combination
with algorithmic trading, trading tools and analysis
software are as efficient and provide as real-time
feeds as possible.
Algorithmic trading has increased the execution
speed of our Trading Teams and has allowed more
complex trading strategies to thrive in the markets.
The combination of core trading know-how, exten-
sive data and technical competencies is a highly
prioritized focus area for MFT Energy.
In 2022, algorithmic trading executed 49% and
20% of the deals in power and gas, respectively.
According to our new strategy, we have set a goal
for algorithmic trading of 40% of the total trading
volume by 2024.
Data-driven trading
Every day, 30 million datapoints related to con-
sumption, production, weather and markets are
gathered and structured to ensure high-data
quality and easy access.
Data are being analyzed by the Trading Teams
where almost 40% of employees are analysts, who
are responsible for the develoment of analytical
models and tools. Data provided by MFT Energy’s
data models are used to feed machine learning
models, and to feed algorithms and other models.
Also our Risk and Treasury Teams are analysing the
data on a daily basis to ensure risk and capital are
within approved mandates and policies.
The data models provide more than 1,300 trade
signals daily, which form the basis of the trader's
execution of the trades. In MFT Energy, trades are
executed either automatically via algorithms or
manually.
IT security
IT security is a top priority for MFT Energy, and we
have taken extensive measures to ensure that our
platform and data are secure and protected. Reac-
tive and proactive surveillance tools are in place,
and our technical platform is regularly audited
by independent security firms to ensure we keep
strengthening our security roadmap.
Our 2023-2024 strategy
On all execution levels of our new strategy, data
and technology will be needed. Data are a central
part of the value chain, and MFT Energy’s Trading
Teams constantly push the technical boundaries for
their trading models and usage.
40%
algorithmic trading in 2024
Data gathering and processing Data analysis Trade execution
Annual Report 2022MFT Energy A/S
23
Business development
Creating value trading power and gas
By the end of 2022, we were trading on 36 markets
and on 21 exchanges. Altogether, 76 employees
were employed in the Trading Teams. The partner-
ship model has ensured a high level of commitment
and a strong joint focus on risk management.
It has required great focus and a structured busi-
ness development process to grow the business as
rapidly as we have for the past six years.
Structured innovation
Strong collaboration between the Business Devel-
opment Team and the Trading Teams has strength-
ened our ability to create value trading power and
gas. Our experienced Business Development Team
facilitates a structured approach to business inno-
vation to ensure value creation, both on a strategic
and operational level.
MFT Energy is continously evaluating the market
development in all current and prospect markets
to ensure we adapt to potential changes in mar-
ket conditions. By doing this, we ensure seamless
development of current markets and onboarding of
new markets and new business areas.
Our 2023-2024 strategy
In line with our 2023-2024 strategy, we plan to
complete our market access process in North
America and go deeper into all the markets in
which we operate gaining knowledge and identify-
ing more opportunities that our traders can act on.
A strong focus on business
development has shaped our
success and growth both in terms
of market access and to ensure
the full potential is utilized in the
markets, where we are actively
trading.
The trading activities of MFT Energy are organized
in 10 Trading Teams covering power and gas. Each
team manages its own geographical area within
Intraday, Day Ahead and Forward trading.
Identification
Business idea recognized and
prioritized in relation to other
pending cases
Research
Specific case is investigated by
a handpicked taskforce with the
relevant skills and knowledge
Evaluation phase
Business case is approved by the
Strategy Business Development
Team and the Strategy Business
Development Committee
Action phase
The business cases are either
implemented or archived
Our structured approach
and experience from
past market openings
ensure a robust process
for new markets.
Angela Protić
Director, Business
Development
Annual Report 2022MFT Energy A/S
25
MFT Energy power
In 2022, MFT Energy power executed on trading
strategies in close cooperation with the Risk Team and
successfully grew traded volumes and market presence.
We added 6 new markets and started trading on the
Japan Electric Power Exchange.
38
TWh traded
+52% in 2022
21
exchanges
in 2022
55
employees
+15 in 2022
35
active power trading markets
+6 in 2022
Annual Report 2022MFT Energy A/S
26
MFT Energy power
Controlled acceleration
lower risk than the longer-term products traded in
the Forward markets.
In 2022, all Trading Teams were highly successful
in executing their respective trading strategies in
close cooperation with the Risk Team to ensure
that both liquidity risk and market risk remained
within the approved risk level at any time.
Growing volumes and market presence
MFT Energy power consists of nine highly skilled
Trading Teams in Europe, the USA, and Asia-Pacific.
All Trading Teams are focusing on deepening our
presence in existing markets to gain higher volumes
on a global level.
Our Power Teams already hold strong positions
in Germany, the UK, France, Benelux, and Türkiye.
In addition, we expanded our market presence by
gaining access to financial power markets in the
USA. In Asia-Pacific, we began physical trading in
Australia and started trading on the Japan Electric
Power Exchange in Tokyo (TOCOM).
Capturing growth potential
Key priorities of our new strategy are:
1. Expand our position in the current markets
2. Increase our trading volumes in non-European
markets
3. Higher degree of automation and algorithmic
trading
By unfolding the potential in current markets and
focusing on a controlled acceleration of our busi-
ness, we will achieve our ambition of becoming a
leading global energy trader.
Power markets across Europe had severe supply challenges in 2022, and MFT Energy’s
Power Teams participated actively in balancing the supply and demand situation. In 2022,
volumes traded by MFT Energy power increased by 52% to 38 TWh.
Trading for energy security
Increasing prices and high volatility were experi-
enced throughout 2022, and distribution of power
across borders was necessary to prevent power
shortage in Europe.
MFT Energy power is specialized in handling these
imbalances between supply and demand and
moved power between the markets to ensure pow-
er at the right place at the right time. By doing so,
MFT Energy participates actively in providing ener-
gy security and affordability across the markets in
which we trade.
Focusing on short-term power products
MFT Energy power’s trading activities are primarily
in short-term Intraday and Day Ahead products.
As transactions within the short end of the market
are settled on the same or the following day, these
products are more predictable and considered
We see great potential
in going deeper into
our current markets
with particular focus on
expanding our presence
in North America and
Asia-Pacific
Cagdas Ozan Ates
CCO
Annual Report 2022MFT Energy A/S
27
21
employees
+6 in 2022
6
exchanges
in 2022
14
active gas trading
markets in 2022
309
TWh traded
+72% in 2022
In 2022, MFT Energy gas played a key role in providing
energy security to markets hit by the limitations of
Russian gas. In doing so, we helped ensure a more
competitive market price for gas.
MFT Energy gas
Annual Report 2022MFT Energy A/S
28
MFT Energy gas
Exceptional market volatility
helped ensure a more competitive market price for
gas, which benefited consumers.
Focus on risk management and liquidity
With the increase in volatility came intensified market
risk and liquidity demands. As volatility spiked during
2022, our Gas Team and Risk Team worked closely
together to respond rapidly, uncover opportunities,
shift focus, and allocate funds efficiently.
Following this, we initiated a three-tier approach
directed on:
1. More short-term focus
2. Selective trading strategies
3. Clear assessment of liquidity tie-up
Such agility and close alignment between the gas
traders and Risk Team have been key to our suc-
cessful and strong operating performance.
Optimizing trading with algorithms
The increased volatility in 2022 accelerated our use
of algorithms, data models, and tools to optimize
trading decisions. Traders working closely with the
Automation and Algorithmic Team were pivotal for
the timing and execution of critical trades. This
also freed up our traders to work on strategies and
further tools to support decision-making.
Preparing for the future
MFT Energy gas has a 24/7 market presence with
night shift out of Singapore to improve the work-life
balance for our Danish-based traders.
To support the accelerating use of automation and
algorithms, an additional 6 employees were added to
the team in 2022, and we will continue to scale up the
use of trading algorithms to further improve our oper-
ating efficiency and performance. In our new strategy,
gas trading in the USA is one of our operational goals.
In 2022, the global gas markets experienced unprecedented volatility caused by limitations in Russian gas
volumes, which led to a change in the traditional flow of gas throughout Europe. The gas volume traded
by MFT Energy increased by 72% to 309 TWh as we contributed to energy security and affordability by
efficiently moving gas to where it was needed the most.
In 2022, we helped
ensure a more
competitive market
price for gas and we
will continue to do so
in the future.
David Carter
Director, Gas Trading
MFT Energy traded volumes equal
more than 50% of Germany’s total
gas consumption in 2022
309 TWh
traded in 2022
Playing a decisive role
As a significant European energy trader, MFT Ener-
gy gas played a vital role in moving gas volumes to
where they were most needed, for example Ger-
many, which led to a volume increase three times
greater than our 2021 volumes. By participating
in the market with other market participants, we
29Source: Commodity Essential, 2022
Annual Report 2022MFT Energy A/S
29
Financial review 2022
In 2022, our business
platform showed its
strength, and our
strong focus on cash
management ensured
that MFT Energy
was able to navigate
safely and deliver
very solid results in
an extraordinary year.
Christian Pape
CFO
In 2022, we delivered gross profit of EUR 641.9m (+667%) and EBIT increased to EUR 576.2m
(+781%), leading to a scalability of 89.8%. Very solid results in an extraordinary year.
Scalable business platform
Rising energy prices and high volatility character-
ized the energy markets in 2022, and our highly
skilled Trading Teams responded swiftly to the
market movements increasing the traded volume by
70% from 205 TWh in 2021 to 347 TWh in 2022.
Our scalable business platform combined with our
solid risk management setup secured a gross profit
of EUR 641.9m compared to EUR 83.7m in 2021,
and EBIT increased to EUR 576.2m compared to
EUR 65.4m in 2021.
Revenue
MFT Energy posted 2022 revenue of EUR 7,875.7m,
a significant increase of 488% from EUR 1,338.8m
in 2021. The improvement was mainly driven by
highly volatile prices during 2022, combined with
increasing traded volumes in both existing and new
markets - in particular, the Gas Team experienced
significant growth in volumes in 2022.
INCOME STATEMENT (EUR '000) 2022 2021 ∆
Revenue 7,875 ,685 1,338,762 488%
Gross profit 641,864 83,702 667%
Gross margin 8.1% 6.3%
Operating profit before financial income and expenses and tax (EBIT) 576,194 65,390 781%
Scalability (EBIT as a percentage of gross profit) 89.8% 78.1%
Profit before tax (EBT) 573,129 63,817 798%
Profit for the year 446,738 49,907 795%
MFT Energy gas gained a strong market position al-
ready in 2021, but during 2022, revenue grew to an
impressive EUR 6,323.0m from EUR 690.4m in 2021,
corresponding to 80% of Group revenue in 2022.
MFT Energy power also showed strong growth in
2022 with posted revenue of EUR 1,552.7m, up
from EUR 648.4m in 2021.
Gross profit
Gross profit increased to EUR 641.9m in 2022 from
EUR 83.7m in 2021, corresponding to an increase
of 667%. More than 95% of gross profit in 2022
was generated in Europe, and less than 1% of our
trading activities was linked to the Danish energy
market.
More than 87% of the trading days led to a positive
gross profit in 2022 expressing the close collabo-
ration between our Trading and Risk Teams. On a
daily basis, liquidity and equity requirements are
controlled and within approved trading mandates.
The increase in gross profit was mainly driven by
the development in the gas activities reflecting the
Annual Report 2022MFT Energy A/S
31
an increase of 798%. Tax for the year amounted to
EUR 126.4m corresponding to an effective tax rate
of 22.1%. More than 98% of the current income tax
is payable in Denmark since most of the trading
activities currently take place at our headquarters
in Denmark. The total company tax contribution in
Denmark for 2022 amounts to EUR 124.5m.
Profit for the year
Net profit for the year totaled EUR 446.8m com-
pared to EUR 49.9m in 2021, representing an
increase of 795% year on year.
* The implementation of IFRS as from January 1, 2020 had an impact on the financial statements and key ratios for 2020 and onwards. Comparative figures for 2018 and 2019 have not been restated and were prepared in accordance with Danish GAAP.
Revenue split, 2021 - 2022
Gas
Power
Gross profit, EBIT, and Scalability, 2018-2022
Gross profit EBIT
Scalability (EBIT as a percentage of gross profit)
Cash flow statement
Cash flow from operating activities rose to EUR
476.9m in 2022 from EUR 22.5m in 2021. The in-
crease in EBITDA had a positive effect on the cash
flow, which was partially offset by the increase in
net working capital. Net working capital increased
due to significant additional collateral requirements
for the trading activities as a consequence of high-
er price levels and increased trading activities.
Cash flow from investing activities was an outflow
of EUR 349.1m in 2022 compared to an outflow
of EUR 1.0m in 2021. The investing activities is
increasing solely due to the investments in German
state bonds in order to mitigate the risk on the
cash placed at banks.
Cash flow from financing activities was an outflow
of EUR 28.0m in 2022 compared to an inflow of
0.4m in 2021. In 2022, dividend payment of EUR
25.3m and repayment of loans of EUR 2.7m were
the main reasons for the outflow of cash.
The total change in cash equivalents was an inflow
of EUR 99.9m in 2022, which was an improvement
from EUR 21.9m in 2021. If the bonds are taking
into consideration the total cash inflow in 2022
amounts to EUR 448.7m.
increased risk taking to secure gas delivery on the
European markets.
Operating profit
Operating profit (EBIT) improved to EUR 576.2m in
2022 compared to EUR 65.4m in 2021, correspond-
ing to a 781% increase. Outlook for 2022 was an
EBIT of EUR 135m. The improvement was driven
by the higher gross profit level without increasing
costs to the same extent. As a result, scalability
increased to 89.8% in 2022, up from 78.1% in 2021.
Staff costs increased to EUR 58.4m in 2022, up
from EUR 13.6m in 2021. The development was due
to an increase in headcount of 49% to 130 employ-
ees at the end of 2022 as well as an increase in
bonus payments due to the higher earnings. The
organization was in 2022 strengthened in the areas
among others of trading, compliance, automation,
and analytical skills.
Other external expenses grew to EUR 7.1m in 2022
from EUR 4.6m in 2021. The increase was linked to
the greater trading activity and continued improve-
ments and automation of MFT Energy’s platform.
Net financial expenses totaled EUR 3.2m in 2022,
up from EUR 1.6m in 2021. The net financial ex-
penses are mainly related to interest on loans and
costs of credit facilities used for trading purposes.
Profit before tax
MFT Energy achieved pre-tax profit (EBT) of EUR
573.1m in 2022 compared to EUR 63.8m in 2021,
2021
2022
20%
80%
52%
48%
Gas
Power
Gross profit, EBIT & Scalability, 2018 - 2022
2020 2021
2022
2019*2018*
EURm %
0
100
200
300
400
500
600
700
0
20
40
60
80
100
Annual Report 2022MFT Energy A/S
32
We expect an EBIT between EUR 150m and EUR
300m in 2023. The market volatility has as expect-
ed decreased during the first half of 2023.
The 2023 expectation may be affected by changes
in volatility, the general situation in the energy mar-
kets and inherent risks and uncertainties that could
generate different results for MFT Energy from what
has been expressed or implied above.
Subsequent events
No events have occurred since the balance sheet
date which could materially affect MFT Energy’s
financial position.
Cash flow, and Cash & Cash equivalents, 2018 - 2022 Equity, Return on equity and Equity ratio, 2018-2022
Cash flow from operating activities Cash and cash equivalents and bonds
Equity
Return on Equity Equity ratio
Capital structure
At the end of 2022, total assets amounted to EUR
917.4m as compared to EUR 481.1m in 2021. The
EUR 436.1m increase in total assets was mainly
linked to current asset investments (bonds), and
cash and cash equivalents, which in total increased
by EUR 449m to EUR 483.2m in 2022. The improved
cash position will allow MFT Energy to utilize more
of the opportunities in the markets in the future.
Other receivables increased to EUR 197.4m in 2022
from EUR 79.5m in 2021 mainly due to an increase in
collateral required for trading activities. The higher
price level and uncertainty in the energy markets led
to significantly increased collateral requirements dur-
ing 2022, and thereby additional capital requirements
for the market participants, such as MFT Energy.
As per December 31, 2022, MFT Energy had equity
of EUR 483.1m, up by 686% from EUR 61.4m at
December 31, 2021. The increase was linked to
profit for the year. Return on equity remained at a
very high level and increased from 141% in 2021 to
164% in 2022.
The equity ratio increased from 13% to 53% due to
the above-mentioned profit for the year. The equity
ratio excluding non-controlling interests increased
from 9% by the end of 2021 to 31% as per Decem-
ber 31, 2022.
Outlook for 2023
Market conditions in the energy markets are ex-
pected to normalize in 2023.
The key strategic priority is to improve our market
position by growing our traded volumes in the cur-
rent main markets and obtaining a strong foothold
in new markets.
Cash flow, and Cash&Cash equivalents, 2018 - 2022
2020 2021 20222019*2018*
EURm %
0
100
200
300
400
500
600
Equity, Return on equity and Equity ratio, 2018-2022
2020 2021
2022
2019*2018*
EURm
%
0
100
200
300
400
500
600
0
20
40
60
80
100
120
140
160
180
Annual Report 2022MFT Energy A/S
33
Annual Report 2022MFT Energy A/S
35
UN SUSTAINABLE DEVELOPMENT GOALS SUSTAINABILITY MATTERS
E
Climate action
1
Climate change mitigation
2
Own emissions mitigation
3
Climate change adaptation
S
Gender equality Own workforce:
4
Working conditions
5
Talent development
6
Equal treatment for all
Affordable and clean energy Consumers and end-users:
7
Secure and affordable energy supply
G
8
Business conduct
9
Cyber security
10
Responsible tax
* in accordance with the EU’s draft ESRS published in November 2022
Financially
material
Not
material
Double
materiality
Impact
material
Financial materiality
Impact materiality
DOUBLE MATERIALITY MATRIX
1 810
9
2 4
6
3
5
7
Annual Report 2022MFT Energy A/S
36
Annual Report 2022MFT Energy A/S
37
Annual Report 2022MFT Energy A/S
38
We are constantly
developing and
strengthening our risk
setup, and in 2022, all
the established lines of
defense showed their
strength and value in
a market with strong
volatility and changes
in regulation.
Per Hjorth Poulsen
CRO
Risk management
Proactive risk management
Risk management takes place at all levels of the organization knowing
that proactive risk management is an integral part of MFT Energy’s
business model and value creation. In 2022, we experienced yet another
year of highly volatile energy markets and throughout the year, MFT
Energy invested in both systems and experienced employees.
Risk management plays an essential role in guiding
and controlling all activities of our Trading Teams.
Only carefully evaluated and analyzed risks that are
aligned with our overall business strategy and have
been approved within established risk mandates are
accepted.
All trading activities are closely monitored through
a systematic approach to ensure that they are
aligned with our risk appetite and the mandates
allocated to the Trading Teams.
Focus on liquidity risk
In 2022, the geopolitical situation led to spikes in
energy prices and a significant increase in collateral
requirements. Thus, MFT Energy has invested in
additional systems to manage and monitor liquid-
ity on a daily basis, both on mandate level where
liquidity limits are in place on all mandates, as well
as on Group level.
Overall, MFT Energy’s risk exposure increased dur-
ing the year; however, strong cooperation between
the Risk Team and the Trading Teams allowed us to
mitigate potential risks.
RISK MANAGEMENT AND COMPLIANCE
Risk documentation
Risk communication
Risk reporting
Risk assessment
Risks are assessed accord-
ing to MFT Energy’s risk
assessment guidelines.
Risk identification
Analytical tools are used to identify risks
that could potentially prevent MFT Energy
from achieving its strategic targets.
Risk mitigation
Risks are either accepted,
avoided, or mitigated.
Risk monitoring
Monitoring of
accepted positions.
Annual Report 2022MFT Energy A/S
39
RESPONSIBILITY TASKS
Board of
Directors
• Decides on the overall risk appetite
• Overall responsibility for MFT Energy's affairs
• Board appoints independent Risk and Audit Committee
• The Risk and Audit Committee reviews
and advises on the effectiveness of risk
management, procedures and capital allocation
• Determine the Risk Capacity and
allocation of risk capital to the company
• Delegates a clear risk mandate to the CEO
Risk Committee
• Implements proper risk governance and fulfills the risk man-
date given by the Board of Directors
• Makes decisions based on the information provided by the
Risk Team
• Compliance with MFT Risk Committee Mandate as given by
the CEO
• Evaluate trading mandate requests
• Decides on mitigating actions and priorities
• Allocates capital based on expected return and
risk
Risk Team
• Ensures compliance with the mandates given by the Risk
Committee by monitoring the approved mandates and
implementing mitigating actions when necessary
• Facilitates dialog with Trading Teams and Risk Committee
• Mandate surveillance
• Risk reporting
• Carries out mitigation instructions given by the
Risk Committee
Mandates and governance
RISK GOVERNANCE FRAMEWORK
Risk governance
The Board of Directors has the overall responsi-
bility for defining the overall risk appetite, and
ensuring that structures and processes are in place
to manage MFT Energy’s key risks in a responsible
manner.
The Board of Directors has appointed a Risk and
Audit Committee to provide assurance to the
Board of Directors on the effectiveness of MFT
Energy’s risk management, control, and governance
processes. The Board's Risk and Audit Committee
monitors the overall risk management framework
and is responsible for the dialog with the Executive
Leadership on behalf of the Board of Directors to
ensure that clear instructions and mandates are
communicated to the CEO.
The Risk Committee, headed by the CEO, has the
sole mandate to approve the implementation of
measures associated with increased risk, and is re-
sponsible for implementing proper risk governance
procedures within the mandate given to the CEO.
The Risk Team is responsible for day-to-day risk
management activities in close cooperation with all
managerial levels, and for securing risk identifica-
tion, assessment, mitigation, and monitoring. MFT
Reports and monitoring
Annual Report 2022MFT Energy A/S
40
HighLow
Regulatory risk
Organizational risk
Market risk
Liquidity risk
Counterparty risk
Currency risk
Operational and IT risk
Medium
Impact
Likelihood
HighLow Medium
Financial risk
Other risk
Energy applies a risk management framework con-
sisting of valuation of all trades with future delivery
and a risk metric in the form of Value-at-Risk. This
provides a clear overall view of how the market risk
evolves and shows how the different trades have
correlated in the past. All of this is reported and
monitored daily by the Risk Team.
Continuous development
During 2022, we strengthened our approach to the
centralized risk management function by a signif-
icant increase in the number of employees on the
Risk Team. Furthermore, data and internal controls
have been strengthened, and we are now conduct-
ing stronger stress testing on mandates and open
positions.
While traders typically focus on market risk, assess-
ing and managing the liquidity and costs associated
with their mandates are now a key part of their
responsibility in collaboration with the Risk Team.
The result is a strong risk culture and a highly collab-
orative and commercially agile working relationship
between the Trading Teams and Risk Team.
As a result, risk management was a strong contrib-
utor to MFT Energy’s performance in 2022.
Key risk categories
MFT Energy is exposed to a range of
risk factors, which are assessed on the
probability of occurrence and potential
damage, followed by appropriate risk
mitigation measures based on MFT En-
ergy’s risk tolerance. These risks cannot
be fully mitigated but can be planned for
and managed.
1. Market risk
2. Liquidity risk
3. Counterparty risk
4. Currency risk
5. Organizational risk
6. Operational and IT risk
7. Regulatory risk
KEY RISKS
Annual Report 2022MFT Energy A/S
41
Key risks - financial
Key risk and risk level Risk Mitigation & actions
1. Market risk
Impact
Likelihood
MFT Energy is exposed to price changes in the power
and gas markets. MFT Energy defines market risk as
the risk that the value of a position changes because
of changing market prices.
Volatility is driven by constant changes in supply and
demand in the power and gas markets, as well as
changes in foreign exchange rates and other econom-
ic or political factors.
• Managing market risk is a source of competitive advantage for MFT Energy.
• Risk limits are established based on the risk appetite and tolerance of our overall risk policy and all mandates are kept within these
boundaries.
• Positions are monitored daily as a second line of defense, while warning levels and stop-loss limits are utilized to guarantee prompt
action when necessary. Positions are constantly evaluated and adjusted to remain in line with the overall mandate and risk strategy
as well as accommodate any ongoing market changes.
• We use a range of tools including Value-at-Risk (VaR) to monitor and limit our market risk exposure.
2. Liquidity risk
Impact
Likelihood
Liquidity risk is the risk that MFT Energy is unable to
meet its payment obligations when due or that it is
unable to borrow funds at an acceptable price to fund
actual or future commitments.
• MFT Energy manages its liquidity risks to maintain a solid capital structure and a strong liquidity position through the following:
• A system calculates how much liquidity each mandate utilizes on a daily basis which ensures that the liquidity always is within limits.
• Strategic and operating thresholds as well as buffers for the level of liquidity are implemented and in case liquidity levels differ from
these targets, several specific procedures and initiatives will be activated.
3. Counterparty risk
Impact
Likelihood
Counterparty risk refers to the risk that the other
party to a trade or contract will not fulfill its obliga-
tions. This can occur for a variety of reasons, such
as financial distress, bankruptcy, or a change in the
regulatory environment.
• The counterparty risk is considered to be relatively low as MFT Energy’s counterparties consist mainly of Transmission System Opera-
tors (TSOs), exchanges and clearing banks, and large energy and utility companies.
• MFT Energy managed the increase in counterparty risk during 2022 through greater use of bank guarantees to reduce exposure to
counterparties in the case of default - this is in addition to having collateral at counterparties as client money.
• The mix of counterparties has not changed but increased volatility has changed their risk profile as a number of large energy and
utility companies applied for state protection from insolvency during the year.
• MFT Energy’s counterparty policy and KYC procedure clearly set out the exposure limits to be observed, and no losses have been
sustained to counterparty risk to date.
4. Currency risk
Impact
Likelihood
Currency risk is the risk of financial loss due to
fluctuations in exchange rates between two curren-
cies. Currency risk arises when a company or investor
holds assets or liabilities as well as future cash flows
in a currency other than the functional currency.
• With the global expansion as well as the increase in volumes the currency risk has increased over the last couple of years.
• MFT Energy has a currency risk policy which requires all currency exposure to be mitigated at the point in time when it arises.
Annual Report 2022MFT Energy A/S
42
Key risks - other
Key risk and risk level Risk Mitigation & actions
5. Organizational risk
Impact
Likelihood
Organizational risk relates to the risk of losing exper-
tise and key employees or not being able to attract
employees with the necessary expertise.
• MFT Energy’s partner model delivers significant benefits in attracting and retaining highly skilled and entrepreneurial and talented
employees by offering partnerships and attractive workspace as well as competence and leadership development.
• In addition, we have a corporate culture that supports a positive and respectful working environment with unity and team spirit,
which also mitigates organizational risk.
6. Operational
and IT risk
Impact
Likelihood
Operational risk relates to the risk of financial losses
because of system or human errors, including insuffi-
cient internal procedures.
• Throughout 2022, MFT Energy continued its efforts to develop and implement internal procedures and systems to mitigate poten-
tial risks. The process of automating procedures and tasks will continue in 2023 to further minimize the risk of human error.
• The operational risk task force established in 2021 continued to create awareness and mitigate potential operational risks in 2022.
7. Regulatory risk
Impact
Likelihood
Energy markets are highly regulated and are subject
to ongoing regulatory developments such as chang-
es to the rules governing the markets themselves,
or changes to laws and regulations that impact the
company’s ability to do business. Accordingly, regu-
latory risk is the risk of MFT Energy not being able to
comply with laws, standards, or regulations related to
our activities that could have a financial, reputational,
or organizational impact.
• MFT Energy closely monitors developments in regulatory requirements to maintain compliance within all relevant markets.
• Compliance reporting is presented to the Executive Leadership, Risk Team, and the Board of Directors on a regular basis. This
ensures that MFT Energy is up to date on compliance risks while also providing a solid platform for new initiatives and high ethical
and regulatory standards within MFT Energy.
• MFT Energy’s trading activities are primarily subject to European regulations such as REMIT, MAR and EMIR and subject to certain
provisions under MiFID II. These regulations set out rules on market abuse, transaction reporting and risk mitigation.
• MFT Energy's trading operations outside the EU are subject to regulations that cover comparable domains, and MFT Energy’s com-
pliance framework considers rules pertaining to economic crime, sanctions, and privacy (GDPR).
Annual Report 2022MFT Energy A/S
43
Board of Directors
EIVIND KOLDING
Danish born 1959
SIMON RATHJEN
Danish born 1986
LASSE PILGAARD
Danish born 1987
PER SCHNACK
Danish born 1961
HEIDI FREDERIKKE SIGDAL
Danish born 1978
Chairman since 2022
Independent
Deputy Chair since 2022
Not independent
Board Member since 2022
Independent
Board Member since 2022
Independent
Board Member since 2022
Independent
Committee memberships Committee memberships
Committee memberships
Risk and Audit Committee
Committee memberships
Risk and Audit Committee
Committee memberships
Competencies
• Executive management
• Strategic planning
• Merger and acquisitions
• Change management
• Private equity
Competencies
• Innovation
• Energy trading
• Business strategy
Competencies
• Finance
• Transformation
• Business development
• Business strategy
Competencies
• Capital markets
• Risk and audit management
• Legal and compliance
Competencies
• Communication and media advisor
• Positioning and branding
Directorship and other offices
• Danish Ship Finance, Chairman
• NTG, Chairman
• DAFA Group, Chairman
• KGH ApS, Chairman
• The LEO Foundation, Vice Chairman
• NNIT, Vice Chairman
• Altor Fund Manager AB, Board Member
• Axcelfuture, Advisory Board Member
Directorship and other offices
• MFT Energy, Founder
• MFT Energy, CVO
Directorship and other offices
• Group CFO, Modern Times Group MTG AB
Directorship and other offices
• Jyske Bank, Board Member
• Jyske Bank Audit Committee, Chairman
• Jyske Bank Risk Committee, Member
Directorship and other offices
• Team Rynkeby, Board Member
• By HeidiFrederikke, Founder
• Sigdal & Guldager, Co-founder
• TV 2 Danmark A/S, Anchor journalist
Annual Report 2022MFT Energy A/S
44
1. 2. 3.4. 5. 6.7.
1
Torben Nordal Clausen
Group Chief Executive Officer
3
Cagdas Ozan Ates
Chief Commercial Officer
4
Jacob Vald Guldberg
Chief Information Officer
7
Simon Rathjen
Chief Visionary Officer
6
Per Hjorth Poulsen
Chief Risk Officer
5
Christian Pape
Chief Financial Officer
Executive Leadership
2
Bo Palmgren
Co-Chief Executive Officer
Annual Report 2022MFT Energy A/S
45
Financial statements
Contents
Income statement and comprehensive income 47
Balance sheet 48
Statement of cash flows 49
Statement of changes in equity 50
Notes to the financial statements
Note 1 Basis of preparation 52
Note 2 Critical accounting estimates and judgments 53
Note 3 Impact of new accounting standards 53
Note 4 Revenue 54
Note 5 Fair value adjustments 55
Note 6 Financial risk management 55
Note 7 Staff costs 60
Note 8 Other operating expenses 63
Note 9 Financial income and expenses 64
Note 10 Income tax expenses 65
Note 11 Intangible assets 66
Note 12 Property, plant and equipment 67
Note 13 Leases 69
Note 14 Deferred tax 70
Note 15 Investments in subsidiaries 70
Note 16 Non-controlling interests 72
Note 17 Inventories 73
Note 18 Trade receivables 74
Note 19 Fair value measurement 75
Note 20 Financial assets and financial liabilities 79
Note 21 Offsetting financial assets and financial liabilities 81
Note 22 Other receivables 83
Note 23 Current asset investments 83
Note 24 Share capital 84
Note 25 Provisions 85
Note 26 Cash flow specifications 86
Note 27 Contingent liabilities, commitments
and contingencies 87
Note 28 Related party transactions 88
Note 29 Fee to auditors appointed at the annual
general meeting 89
Note 30 Subsequent events 89
Note 31 Definitions of financial ratios 90
Annual Report 2022MFT Energy A/S
46
GROUP PARENT
EUR ‘000 Notes 2022 2021 2022 2021
Revenue 4 7,875,685 1,338,762 7,875 ,685 1,338,762
Fair value adjustment of financial and physical
energy contracts 5 159,702 45,540 152,905 43,628
Cost of sales -7,393,523 -1,300,600 -7,393, 523 -1,300,600
Gross profit 641,864 83,702 635,067 81,790
Other external expenses -7,097 -4,642 -4,543 -4,417
Staff costs 7 -58,354 -13,589 -8,639 -2,870
Other operating income 0 44 6,921 5,121
Other operating expenses 8 0 0 -635,103 -83,092
Depreciation, amortization and impairment -219 -125 -211 -121
Operating profit before financial income and
expenses and tax (EBIT) 576,194 65,390 -6,508 -3,589
Income from investments in subsidiaries 15 0 0 269,126 38,613
Financial income 9 1,577 100 1,520 22
Financial expenses 9 -4,642 -1,673 -6,344 -1,576
Profit before tax (EBT) 573,129 63,817 257,794 33,470
Tax on profit for the year 10 -126,392 -13,910 2,420 1,117
Profit for the year 446,737 49,907 260,214 34,587
Profit for the period attributable to:
Shareholders of MFT Energy A/S 260,214 34,587
Non-controlling interests 186,523 15,320
GROUP PARENT
EUR ‘000 Notes 2022 2021 2022 2021
Profit for the year 446,737 49,907 260,214 34,587
Other comprehensive income
Items that may be reclassified to profit or loss
Value adjustment of cash flow hedges for the year -1,914 1,914 -1,914 1,914
Value adjustment of cash flow hedges
reclassified to profit or loss 686 -686 686 -686
Income tax relating to these items 270 -270 270 -270
Exchange differences on translation of foreign operations 11 0 11 0
Other comprehensive income for the period, net of tax -947 958 -947 958
Total comprehensive income for the period 445,790 50,865 259,267 35,545
Total comprehensive income for the period attributable to:
Shareholders of MFT Energy A/S 259,267 35,545
Non-controlling interests 186,523 15,320
Extraordinary dividend after year end 30 142,539 0 74,000 0
Total extraordinary dividend after year end per share in EUR 279 0 145 0
Income statement
for the year ended December 31, 2022
Statement of comprehensive income
for the year ended December 31, 2022
Annual Report 2022
47
MFT Energy A/S
GROUP PARENT
EUR ‘000 Notes 2022 2021 2022 2021
ASSETS
Non-current assets
Intangible assets 11 40 43 0 1
Property, plant and equipment 12 135 58 127 57
Right-of-use assets 13 45 155 45 155
Deferred tax assets 14 4,447 14 4,410 14
Equity investments in subsidiaries 15 0 0 293,386 45,983
Deposits 300 236 245 208
Other receivables 1,439 941 1,390 942
Total non-current assets 6,406 1,447 299,603 47,360
Current assets
Inventories 17 33,020 10,720 33,020 10,720
Trade receivables 18 33,346 21,037 29,083 20,833
Receivables from group enterprises 1,254 375 15,062 5,986
Income tax receivables 0 0 0 833
Derivatives 19, 20 155,018 333,365 154,783 333,365
Prepayments 593 367 461 281
Other receivables 22 197,394 79,506 194,300 78,902
Current asset investments 23 348,888 0 348,888 0
Cash and cash equivalents 134,344 34,511 127,67 7 32,306
Total current assets 903,857 479,881 903,274 483,226
Total assets 910,263 481,328 1,202,877 530,586
GROUP PARENT
EUR ‘000 Notes 2022 2021 2022 2021
EQUITY
Share capital 24 68 68 68 68
Reserves and retained earnings 288,710 44,932 288,710 44,932
Proposed dividend for the year 0 0 0 0
Equity attributable to MFT Energy A/S’s shareholders 288,778 45,000 288,778 45,000
Equity attributable to non-controlling interests 194,272 16,409 0 0
Total equity 483,050 61,409 288,778 45,000
LIABILITIES
Non-current liabilities
Borrowings 20 4,603 6,730 4,603 6,730
Lease liabilities 13 0 47 0 47
Payables to group enterprises 0 0 644,012 87,10 8
Provisions 25 8,405 0 8,405 0
Other liabilities 0 49 0 0
Total non-current liabilities 13,008 6,826 657,02 0 93,885
Current liabilities
Borrowings 20 1,008 712 1,008 712
Lease liabilities 13 47 111 47 111
Trade payables 55,010 50,640 55,010 50,638
Payables to group enterprises 0 0 3,379 0
Derivatives 20 179,028 337,712 179,009 337, 712
Corporate tax liabilities 129,978 14,193 1,707 0
Provisions 25 11,595 0 11,595 0
Other liabilities 37,539 9,725 5,324 2,528
Total current liabilities 414,205 413,093 257,079 391,701
Total liabilities 427,213 419,919 914,099 485,586
Total liabilities and equity 910,263 481,328 1,202,877 530,586
Balance sheet
at December 31, 2022
Annual Report 2022MFT Energy A/S
48
GROUP PARENT
EUR ‘000 Notes 2022 2021 2022 2021
Cash flows from operating activities
Net profit for the year 446,738 49,907 260,214 34,587
Adjustments 26 129,804 15,807 -267,027 -37, 779
Changes in net working capital 26 -81,534 -39,653 -99,639 -46,240
Cash flows from operating activities before
financial income and expenses 495,008 26,061 -106,452 -49,432
Interest received 1,577 1,624 1,520 1,497
Interest paid -4,642 -3,197 -6,344 -3,120
Income taxes paid -15,007 -1,994 833 326
Net cash flow from operating activities 476,936 22,494 -110,443 -50,729
Cash flows from investing activities
Payments for property, plant and equipment 12 -115 -61 -115 -61
Fixed asset investments 0 0 155 0
Current asset investments -348,888 0 -348,888 0
Payment of deposits -64 -100 -37 -192
Share purchase programs 0 -816 0 -816
Dividend received from subsidiaries 0 0 21,499 0
Net cash flow from investing activities -349,067 -977 -327,386 -1,069
GROUP PARENT
EUR ‘000 Notes 2022 2021 2022 2021
Cash flows from financing activities
Proceeds from borrowings 20 -1,832 -234 -1,832 -234
Principal elements of lease payments 13 -67 -147 -54 -147
Proceeds from group enterprises 0 0 0 40
Change in loans with group enterprises -879 -125 551,207 71,768
Dividends paid to shareholders -16,121 -50 -15,799 -50
Dividends paid to non-controlling interests -9,137 0 -322 0
Equity shareholder increase 0 932 0 932
Net cash flow from financing activities -28,036 376 533,200 72,309
Change in cash and cash equivalents 99,833 21,893 95,371 20,511
Cash and cash equivalents at January 1 34,511 12,618 32,306 11,795
Cash and cash equivalents at December 31 134,344 34,511 127,677 32,306
Statement of cash flows
for the year ended December 31, 2022
Annual Report 2022
49
MFT Energy A/S
GROUP
EUR ‘000
Share
capital
Reserve
for unpaid
share capital
Share
premium
account
Hedging
reserve
Foreign
currency
translation
differences
Retained
earnings
Proposed
dividend for
the year
Equity
attributable
to owners of
the parent
company
Non-
controlling
interests
Total
equity
At January 1, 2021 67 50 0 0 0 8,326 50 8,493 1,089 9,582
Profit for the period 0 0 0 0 0 34,587 0 34,587 15,320 49,907
Other comprehensive income 0 0 0 958 0 0 0 958 0 958
Total comprehensive income 0 0 0 958 0 34,587 0 35,545 15,320 50,865
Transactions with owners in their capacity as owners
Cash capital increase 1 0 931 0 0 0 0 932 0 932
Dividends paid 0 0 0 0 0 0 -50 -50 0 -50
Share-based payments 0 0 0 0 0 80 0 80 0 80
Remaining share capital paid 0 -50 0 0 0 50 0 0 0 0
Transfer from share premium account 0 0 -931 0 0 931 0 0 0 0
At December 31, 2021 68 0 0 958 0 43,974 0 45,000 16,409 61,409
At January 1, 2022 68 0 0 958 0 43,974 0 45,000 16,409 61,409
Profit for the period 0 0 0 0 0 260,214 0 260,214 186,524 446,738
Other comprehensive income 0 0 0 -958 11 0 0 -947 0 -947
Total comprehensive income 0 0 0 -958 11 260,214 0 259,267 186,524 445,791
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 0 0 -16,121 0 -16,121 -9,137 -25,258
Share-based payments 0 0 0 0 0 141 0 141 0 141
Other changes in equity 0 0 0 0 0 490 0 490 477 967
At December 31, 2022 68 0 0 0 11 288,698 0 288,777 194,273 483,050
Statement of changes in equity, Group
for the year ended December 31, 2022
Annual Report 2022MFT Energy A/S
50
PARENT
EUR ‘000
Share
capital
Reserve
for unpaid
share capital
Share
premium
account
Reserve for
loans to
shareholders
Hedging
reserve
Foreign
currency
translation
differences
Reserve
for net
revaluation
under the
equity method
Retained
earnings
Proposed
dividend for
the year
Total
equity
At January 1, 2021 67 50 0 0 0 0 5,489 2,837 50 8,493
Profit for the period 0 0 0 816 0 38,625 -4,854 0 34,587
Other comprehensive income 0 0 0 0 958 0 0 0 0 958
Total comprehensive income 0 0 0 816 958 0 38,625 -4,854 0 35,545
Transactions with owners in their capacity as owners
Cash capital increase 1 0 931 0 0 0 0 0 0 932
Dividends paid 0 0 0 0 0 0 0 0 -50 -50
Share-based payments 0 0 0 0 0 0 0 80 0 80
Remaining share capital paid 0 -50 0 0 0 0 0 50 0 0
Transfer from share premium account 0 0 -931 0 0 0 0 931 0 0
At December 31, 2021 68 0 0 816 958 0 44,114 -956 0 45,000
At January 1, 2022 68 0 0 816 958 0 44,114 -956 0 45,000
Profit for the period 0 0 0 -115 0 0 247, 39 9 12,930 0 260,214
Other comprehensive income 0 0 0 0 -958 11 0 0 0 -947
Total comprehensive income 0 0 0 -115 -958 11 247,39 9 12,930 0 259,267
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 0 0 0 0 -16,121 0 -16,121
Share-based payments 0 0 0 0 0 0 0 141 0 141
Other equity movements 0 0 0 0 0 0 0 491 0 491
At December 31, 2022 68 0 0 701 0 11 291,513 -3,515 0 288,778
Statement of changes in equity, Parent
for the year ended December 31, 2022
Annual Report 2022
51
MFT Energy A/S
Notes to the financial statements
1 Basis of preparation
The consolidated financial statements of MFT Energy A/S
(‘the Parent Company’) and its subsidiaries (‘the Group’
or ‘MFT Energy’) for the year ended December 31, 2022
were authorized for issue in accordance with a resolution
of the Board of Directors and Executive Management on
May 25, 2023.
The significant accounting policies adopted in the prepa-
ration of the consolidated financial statements and the
separate financial statements are stated in this note and
as part of the disclosures in the following notes. These
policies have been consistently applied to all the years pre-
sented, except for the adoption of new standards effective
as of January 1, 2022. Please refer to note 3 for a descrip-
tion of new accounting standards and interpretations.
The consolidated financial statements cover the Group
consisting of MFT Energy A/S and its subsidiaries while
the separate financial statements cover MFT Energy A/S.
Basis of preparation
The consolidated financial statements of the Group and
the separate financial statements have been prepared in
accordance with International Financial Reporting Stan-
dards (IFRS) as adopted by the EU as well as additional
Danish disclosure requirements applying to entities of
reporting class C for large enterprises.
The financial statements have been prepared on a histor-
ical cost basis, except for the following financial assets
and liabilities, which are measured at fair value:
• Contracts for sale and purchase of gas, power and ca-
pacities not entered into for the Group’s own use
• Derivative financial instruments
The consolidated financial statements and the separate
financial statements are presented in Euro (EUR) and all
values are rounded to the nearest thousands, except when
otherwise indicated.
Minor reclassifications have been made to prior year
amounts to enhance comparability with the current year
presentation. These reclassifications had no effect on
the reported results. EUR 1,524k for the Group and EUR
1,475k for the Parent have been reclassified from financial
income to financial expenses in note 9.
Principles of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has
control. The Group controls an entity where the Group
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power to direct the activities
of the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account
for business combinations by the Group.
Intercompany transactions, balances and unrealized gains
on transactions between group companies are eliminated.
Unrealized losses are also eliminated unless the transac-
tion provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests in the results and equity of sub-
sidiaries are shown separately in the consolidated income
statement of profit or loss, statement of comprehensive
income, statement of changes in equity and balance
sheet, respectively.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the
Group’s entities are measured using the currency of the
primary economic environment in which the entity oper-
ates (‘the functional currency’). The consolidated financial
statements and the separate financial statements are pre-
sented in Euro (EUR), which is MFT Energy A/S’s functional
and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions, and
from the translation of monetary assets and liabilities
denominated in foreign currencies at year-end exchange
rates, are recognized in profit or loss.
The results and financial position of foreign operations
that have a functional currency different from Euro are
translated into Euro as follows:
• assets and liabilities for each balance sheet presented
are translated at the closing rate at the date of the
balance sheet
• income and expenses for each statement of profit or
loss and statement of comprehensive income are trans-
lated at average exchange rates, and
• all resulting exchange differences are recognized in
other comprehensive income.
On consolidation, exchange differences arising from the
translation of any net investment in foreign entities are
recognized in other comprehensive income. When a foreign
operation is sold, the associated exchange differences are
reclassified to profit or loss, as part of the gain or loss on sale.
Cost of sales
Cost of sales includes the purchase price of gas and pow-
er and related use of capacities on contracts for which
physical delivery takes place.
Other external expenses
Other external expenses comprise expenses related to
premises, consultants, marketing as well as office expens-
es, etc.
Deposits
Deposits consist of lease deposits, etc. and are measured
at amortized cost.
Prepayments
Prepayments consist of prepaid expenses concerning ac-
quisitions, insurance premiums, subscriptions and interest.
Other accounting policies
Other accounting policies are described in the relevant
notes.
Annual Report 2022MFT Energy A/S
52
Notes to the financial statements
2 Critical accounting estimates and judgments
The preparation of MFT Energy A/S’s consolidated and
separate financial statements requires the use of account-
ing estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judg-
ment in applying the Group’s accounting policies.
This note provides an overview of the areas that involved
a higher degree of judgement or complexity, and of items
which are more likely to be materially adjusted due to
estimates and assumptions turning out to be wrong.
Detailed information about each of these estimates and
judgements are included in the description below.
Estimates
Valuation of derivatives and commodity contracts
not entered into for the Group’s own use
In some cases, the fair values of derivatives are estimated
using internal models due to the absence of quoted prices
or other observable, market-corroborated data. This pri-
marily applies to the Groups longer-term, structured deriv-
ative contracts or contracts in illiquid markets. The major-
ity of these contracts are valued using models with inputs
that include price curves for each of the different prod-
ucts. These price curves are built up from available active
market pricing data including volatility and correlation and
modelled using the maximum available market-derived in-
formation. Additionally, when limited data exist for certain
products or market areas, prices are determined using his-
torical and long-term pricing relationships. The use of al-
ternative estimates or valuation methodologies may result
in significantly different values for these derivatives.
Onerous contracts
The Group also trades capacities for which no active
market exists hence the price is estimated, as there is no
explicit and observable input. Only contracts that are
not entered into for the groups own use has been subject
for such estimate. The onerous contracts provided for are
related to the abovementioned capacities. The contracts
are estimated based on spreads observable in the market
at the balance sheet date with a supplement of mange-
ment estimate based on the subsequent development in
the market.
The estimates are based on the future spreads between
the given market areas, which may result in different
values for these derivatives. Please refer to note 19 for
more detailed description and a display of the fair value
hierarchy.
3 Impact of new accounting standards
New standards and interpretations not yet adopted
MFT Energy has adopted relevant new or amended stan-
dards (IFRS) and interpretations (IFRIC) as adopted by the
EU and which are effective for the financial year January 1
– December 31, 2022. The following have been adopted:
• Amendment to IAS 16: Proceeds before intended use.
• Amendment to IAS 37: Provisions, contingent liabilities
and contingent assets: Onerous contracts - Cost of
fulfilling a contract.
• Annual improvements 2018-2020 comprising minor
amendments to existing standards.
The Group has assessed that the new or amended stan-
dards and interpretations have not had any material
impact on the consolidated financial statements or the
separate financial statements in 2022.
Certain new accounting standards, amendments to ac-
counting standards and interpretations that have been
published are not mandatory for December 31, 2022
reporting periods and have not been early adopted by the
Group. These standards include:
• Amendments to IAS 8 Accounting policies: Changes
in Accounting Estimates and Errors - Definition of Ac-
counting Estimates (January 1, 2023).
• Amendments to IAS 12 Income Taxes: Deferred Tax
related to Assets and Liabilities arising from a Single
Transaction (January 1, 2023).
• Amendments to IAS 1 Presentation of Financial State-
ments and IFRS Practice Statement 2: Disclosure of
Accounting policies (January 1, 2023).
• Amendments to IAS 1 Presentation of Financial
Statements: Classification of Liabilities as Current or
Non-current and Classification of Liabilities as Current
or Non-current (January 21, 2024, not yet endorsed by
the EU).
The listed amendments are not expected to have a ma-
terial impact on the recognition and measurement of the
balance sheet at January 1, 2023 neither in terms of the
consolidated financial statements nor the separate finan-
cial statements.
Critical accounting estimates and judgments
Estimates/
judgment
Impact from
estimates and
judgments
Valuation of derivatives Estimate Moderate
Onerous contracts Estimate Low
Annual Report 2022
53
MFT Energy A/S
Notes to the financial statements
4 Revenue
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Revenue from contracts, IFRS
Power sales 1,552,719 648,367 1,552,719 648,367
Gas sales 6,322,966 690,395 6,322,966 690,395
Revenue 7,87 5, 685 1,338,762 7,87 5, 685 1,338,762
The Group derives revenue from the transfer of sold power and gas at a point in time. For 2022 as well as 2021, all rev-
enue was generated within Europe, as this was the only region with trades that use capacities. MFT Energy also enters
into trading outside of Europe, but such trades did not use capacities in 2022 nor in 2021 and therefore do not qualify
for recognition in revenue. Instead, it is recognized on a net basis within the line item fair value adjustment of financial
and physical energy contracts.
According to Danish GAAP, it is possible to recognize revenue from trade in revenue in profit and loss even if it does
not enter into physical delivery. Management recognizes revenue in the internal reporting in accordance with Danish
GAAP as well. It has been reported as:
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Revenue from contracts, Danish GAAP
Power sales 3,616,428 1,091,818 3,595,153 1,083,779
Gas sales 17, 455, 796 3,137,124 17,455 ,796 3,137,124
Revenue 21,072,224 4,228,942 21,050,949 4,220,903
The presented tables illustrate the revenue while the corresponding gross profit margins are presented in the following:
GROUP PARENT
2022 2021 2022 2021
Gross margin, IFRS 8.1% 6.3% 8.1% 6.1%
Gross margin, Danish GAAP 3.0% 2.0% 3.0% 1.9%
Accounting policies
Revenue comprises consideration from the physical delivery of gas and power under standardized fixed-price contracts
and the sale and purchase of gas at a number of gas trading hubs and related capacity contracts.
As part of its ordinary activities, the Group regularly enters into offsetting contracts to close out positions before de-
livery.
Therefore, such contracts are not considered entered into for the purpose of selling or taking delivery of gas and
power. Consequently, they are initially classified as derivative financial instruments and are measured at fair value with
changes in fair value recognized in the income statement.
Revenue from gas and power contracts, which results in physical delivery is recognized upon delivery at the contractu-
ally stated fixed price adjusted for the fair value of the contract immediately before delivery.
Annual Report 2022MFT Energy A/S
54
Notes to the financial statements
5 Fair value adjustments
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Fair value adjustments of financial and
physical energy contracts
Fair value adjustments related to Power contracts 10,642 -13,888 3,845 -15,800
Fair value adjustments related to Gas contracts 149,060 59,428 149,060 59,428
Total fair value adjustments 159,702 45,540 152,905 43,628
Accounting policies
As described under revenue recognition, MFT Energy enters into physical energy contracts that are not considered en-
tered into for the purpose of selling or taking delivery of the underlying goods. Further, MFT Energy enters into finan-
cial gas and power derivatives. Fair value changes for the accounting period are included in this line item.
MFT Energy routinely enters into sale and purchase transactions for physical delivery of energy commodities. A consid-
erable part of these transactions for physical delivery of a non-financial item are considered within the scope of IFRS
9 due to the fact that the Group has a practice of entering into offsetting contracts before the delivery date. Conse-
quently, they are measured at fair value on initial recognition and subsequently measured at fair value through profit
and loss.
For contracts whose fair value cannot be determined solely based on observable market data, any difference between
the transaction price and fair value determined by applying a valuation model is deferred and recognized over the term
of the contract.
A portion of the sale and purchase transactions for physical delivery of energy commodities takes the form of con-
tracts that were entered into and continue to be held for the purpose of receipt or delivery of the physical 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 con-
tract as well as facts and circumstances of how the contract is included in MFT Energy’s business activity on a group
basis.
6 Financial risk management
The Group’s risk management is predominantly controlled by the Risk Team under the supervision of the Risk Commit-
tee and policies approved by the Board of Directors and the Board’s Risk and Audit Committee.
The Board of Directors provides written principles for the overall risk management appetite covering areas such as
market risk, foreign exchange risk, credit risk, the use of derivative financial instruments, and non-derivative financial
instruments. The Risk and Audit Committee is organized by the Board of Directors, and the CFO and CRO of the Group
are invited to participate in the quarterly meeting in order to elaborate on written reporting. The Board’s Risk and
Audit Committee works in close cooperation with the Risk Committee headed by the CEO. The Risk Committee has the
responsibility of ensuring that the level of risk is within the approved limits and policies. New risk limits and policies
are first assessed by the Board’s Risk and Audit Committee before final approval by the Board of Directors.
The Risk Team headed by the CRO is the operational function and works as a second line of defense, while the Trading
Teams work as the first line of defense. The Risk Team is monitoring, identifying, stress testing, and evaluating risk
based on live data from the Trading Teams. The Risk Team is closely working together with the Finance and Treasury
Teams to monitor and assess the currency and liquidity risk.
When all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedg-
ing instrument and the hedged item. Hedging is used to decrease or eliminate the market risk and currency risk. The
use of hedging is closely determined in the risk mandate which the Trading Teams are granted by the Risk Committee.
The Group is exposed to market risk, currency risk, credit risk and liquidity risk.
Market risk
MFT Energy’s most significant market risks relate to price changes in gas and power, foreign currency risk and interest
rate risk.
Market risk is the risk of losses or gains caused by changes in the market value of the Group’s financial assets and
liabilities resulting from changes in market prices or rates. Market risk affects the Group’s financial statements through
the valuation of the Group’s financial instruments.
The Group’s risk management is intended to ensure proper oversight of all market risks, both trading-related market
risks and non-trading-related market risks, for instance cash deposits, etc. The market risk framework is designed to
systematically identify, assess and report market risk by continuously monitoring the trading activity of the Group. As
Annual Report 2022
55
MFT Energy A/S
Notes to the financial statements
part of the risk management position, limits are in place thus limiting the positions MFT Energy can take in a specific
market and tenor. Furthermore, in order to lock in current gains and prevent excessive losses, stop-loss limits are in
place to force MFT Energy to close positions in case a certain loss is reached over a period of time.
The Risk Team is measuring the Value-at-Risk (VaR) in order to assess the market risk on an ongoing basis. VaR is a
statistical measure that defines the probability of a possible loss during a certain period of time given normal market
conditions. The Risk Team is reporting the VaR level to the Risk Committees if the level exceeds the exposure limits.
Value-at-Risk
The table below shows the VaR (Value-at-Risk) for the positions in the Trading Teams in the Group at December 31,
2022 and December 31, 2021.
No material changes have been made to the VaR model in 2022 compared to 2021.
VaR is calculated under the assumption of 1-day holding periods, 95% confidence and 1-year historical data.
GROUP & PARENT
EUR ‘000 2022 2021
Power at December 31 592 136
Gas at December 31 2,557 842
Commodity price risk
Commodity price risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of chang-
es in underlying commodity prices. MFT Energy’s exposure to the risk of changes in commodity prices and volumes
relates to the trading performed by MFT Energy in power and gas.
The risk linked to commodity prices differs depending on whether it is a long or short-term position.
The table below is prepared under the assumption that only the respective market risk has changed. All other variables
are not subject to changes. The percentage change in commodity prices used to determine sensitivity is estimated by
Management as a probable scenario, especially on the back of a period with high volatility.
GROUP & PARENT
Sensitivity by commodity
Impact on profit or loss
before tax
EUR ‘000 2022 2021
Power, increase of 30%* 697 90
Power, increase of 60%* 1,394 180
Gas, increase of 30%* -124 -1,080
Gas, increase of 60%* -248 -2,160
*) Changes in the opposite direction would achieve the inverse result.
The sensitivity analysis states the impact on the profit or loss before tax. The effect on the profit or loss after tax will
be 78% of the profit or loss before tax. The effect on the equity will be the residual value of the profit or loss after tax.
The Group is actively using forward contracts to hedge positions and mitigate market risk related to long positions. All
hedge positions are in accordance with the written principles approved by the Risk Committee. The commodity price
risk related to gas in relation to inventory is hedged using forward contracts. MFT Energy applies hedge accounting to
fair value hedges on inventory. If a hedge is ineffective, it is recognized in the income statement and included in the
line item fair value adjustment of financial and physical energy contracts.
The Group does not consider the ineffective part of the hedge position to be material as the hedge policy and the
Group determinds that the nominal positions needs to be fully hedged off.
In 2021, MFT Energy A/S entered into several forward contracts that hedged highly probable future sales and purchas-
es of gas. These contracts are designated as cash flow hedges and are shown below:
6 Financial risk management, continued
Annual Report 2022MFT Energy A/S
56
Notes to the financial statements
6 Financial risk management, continued
GROUP & PARENT
Cash flow hedges, 2021
EUR ‘000
Contract
amount
according
to hedge
accounting
Total hedging
gain/loss
recognized in
other compre-
hensive income
Average
hedge prices
of existing
contracts
(EUR) Maturity
Purchase of gas 21,459 -4,773 48.7 Q1 2022
Sale of gas -22,334 6,001 50.7 Q1 2022
Total -875 1,228
There are no cash flow hedges as of December 31, 2022.
Foreign currency risk
Foreign currency risk is the risk that fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. MFT Energy’s exposure to foreign currency risk is derived from the Group’s trading activities
in which trade receivables, trade payables and derivatives are denominated in a currency other than the functional
currency.
MFT Energy manages its risk related to foreign currency through an active economic hedging strategy, in accordance
with the guidelines approved by the Risk Committees, and the risk is continuously monitored by the Risk Team in close
collaboration with the Treasury Team. The exposure is not considered material.
The daily commercial business is exposed to a wide range of different currencies. However, there is no single currency
exposure that is considered material. The functional currency for most of the entities within the Group is EUR since the
majority of the activities are performed in market areas where commodity products are traded in EUR.
The table below only contains the exposure for the Parent Company, hence, the risk and exposure for the rest of the
entities of the Group are considered immaterial. The table discloses the net monetary amount in currencies other than
the functional currency.
Parent Company’s monetary items and sensitivity
2022 2021
EUR ‘000
Cash and
receivables
Potential
volatility of
exchange
rate*
Impact
on profit
or loss
before tax
Cash and
receivables
Potential
volatility of
exchange
rate*
Impact
on profit
or loss
before tax
DKK/EUR 2,618 1% 26 618 1% 6
GBP/EUR 43,829 5% 2,087 18,755 5% 893
CZK/EUR 13,235 5% 630 213 5% 10
BGN/EUR 11,719 0% 0 1,040 0% 0
JPY/EUR 362 6% 20 0 0 0
RON/EUR 41 2% 1 1,143 2% 22
* Changes in the exchange rate in the opposite direction would achieve the inverse result.
Annual Report 2022
57
MFT Energy A/S
Notes to the financial statements
Interest rate risk
The exposure to the risk of changes in market interest rates relates primarily to interest-bearing assets and liabilities
in the Group with a floating rate. The exposure is not considered material. Please refer to note 20 regarding financial
assets and liabilities.
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit
exposures from counterparties, including outstanding receivables and current asset investments.
The credit risk is managed on a group basis and monitored by the Risk Committee and the Risk Team in accordance
with the written principles and policies of MFT Energy. The Risk Team monitors the credit risk daily and is actively op-
timizing the bank collaterals and bank guaranties made to counterparties in close collaboration with the Treasury and
Finance Teams.
MFT Energy makes numerous trades with commodity exchanges that are generally settled at fair value on a daily basis.
Management considers its credit risk exposure to commodity exchanges to be insignificant due to the daily settlement.
The trades entered into are in general performed under standard agreements that allow netting provisions. These
agreements are mitigating the credit risk of the Group.
MFT Energy purchases German government bonds in order to mitigate the risk and ensure interest income for the ex-
cess liquidity. Management considers its credit risk exposure to be insignificant due to the nature and short maturity
of the bonds.
The credit risk related to the financial assets primarily concerns derivatives and trade receivables. The credit risk of
the derivatives measured at fair value is considered limited based on the netting and offsetting possibilities. Trade
receivables primarily consist of receivables against clearing houses, commodity exchanges and Transmission System
Operators (TSOs) which are all considered to be subject to insignificant credit risk.
For more information about the trade receivables, please refer to note 18. Please refer to note 21 for more information
about offsetting of financial assets and liabilities.
Trade receivables
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris-
tics and the days past due. No loss allowances have been made for 2022 and 2021.
Trade receivables primarily consist of receivables from commodity exchanges, clearing houses and TSOs. Such receiv-
ables amount to EUR 29,681k (2021: EUR 16,333k) for the Group and EUR 25,599k (2021: EUR 16,333k) for the Parent
Company. Receivables from other parties amount to EUR 3,665k (2021: EUR 4,704k) for the Group and EUR 3,484k
(2021: EUR 4,500k) for the Parent Company. The Group has made a credit risk assessment of the open financial posi-
tions at the balance sheet date. No provisions were needed as the risk is deemed immaterial.
Trade receivables are written off if there is no reasonable expectation of recovery. Indicators of no reasonable expec-
tation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group or
failure to make contractual payments for a period longer than 90 days past due.
Liquidity risk
Liquidity risk is the risk that MFT Energy has insufficient funds to meet its financial obligations. The liquidity risk is
monitored on a daily basis, and daily cash flow forecasts are produced, ensuring the availability of required liquidity in
the Group by appropriate cash management and maintaining adequate liquidity reserves at any time through a combi-
nation of readily available cash and committed credit facilities. The available cash is monitored daily to ensure that the
reserves at all times are in accordance with the written principles and policies set by the Risk Committees.
The Group regularly enters into commodity derivative transactions which, according to their terms, require daily margin
calls. To comply with risk limits, the market risk of such derivatives is reduced through offsetting positions. The terms
of these offsetting positions may not require daily margin calls, or no margin calls at all. Movements in the market pric-
es for the underlying derivatives may, therefore, have an adverse impact on the Group’s liquidity position, irrespective
of the fact that market price movements do not result in a loss. The Group assesses that the current credit lines are
sufficient to fulfill the obligations under such margin call agreements for possible changes in the market prices. The
Risk Team has implemented a series of warnings and stop-loss limits that ensure positions are closed at the right time
if the market develops in a direction that exposes the Group to too much to risk.
Maturities of financial liabilities
The amounts disclosed in the following table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant.
6 Financial risk management, continued
Annual Report 2022MFT Energy A/S
58
Notes to the financial statements
6 Financial risk management, continued
Contractual maturities of
financial liabilities GROUP
EUR ‘000 < 1 year 1 - 2 years 2 - 5 years > 5 years
Total
contractual
cash flows
Carrying
amount
At December 31, 2022
Trade payables 55,010 0 0 0 55,010 55,010
Borrowings 1,385 1,369 3,730 147 6,631 5,610
Lease liabilities 47 0 0 0 47 47
Derivatives held for trading 190,637 0 0 0 190,637 190,637
Other payables 37,53 9 0 0 0 37, 539 37,53 9
284,618 1,369 3,730 147 289,864 288,843
At December 31, 2021
Trade payables 50,640 0 0 0 50,640 50,640
Borrowings 1,145 1,525 4,247 2,413 9,330 7,4 42
Lease liabilities 115 47 0 0 162 158
Derivatives held for trading 337,712 0 0 0 337, 712 337,712
Other payables 9,7 75 0 0 0 9,775 9,7 75
399,387 1,572 4,247 2,413 407,619 405,727
Contractual maturities of
financial liabilities PARENT
EUR ‘000 < 1 year 1 - 2 years 2 - 5 years > 5 years
Total
contractual
cash flows
Carrying
amount
At December 31, 2022
Trade payables 55,010 0 0 0 55,010 55,010
Borrowings 1,385 1,369 3,730 147 6,631 5,610
Lease liabilities 47 0 0 0 47 47
Derivatives held for trading 190,618 0 0 0 190,618 190,618
Payables to group enterprises 3,379 650,452 0 0 653,831 6 47, 391
Other liabilities 5,324 0 0 0 5,324 5,324
255,763 651,821 3,730 147 911,461 904,000
At December 31, 2021
Trade payables 50,638 0 0 0 50,638 50,638
Borrowings 1,145 1,525 4,247 2,413 9,330 7,4 42
Lease liabilities 115 47 0 0 162 158
Derivatives held for trading 337,712 0 0 0 337, 712 337,712
Payables to group enterprises 0 87,97 9 0 0 87,979 87,108
Other liabilities 2,528 0 0 0 2,528 2,528
392,138 89,551 4,247 2,413 488,349 485,586
Annual Report 2022
59
MFT Energy A/S
Notes to the financial statements
6 Financial risk management, continued
Accounting policies
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is rec-
ognized in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognized
immediately in profit and loss under other operating income/expenses.
Only forward contracts are used to hedge future transactions ,and the Group designates the full change in the fair
value (including forward points) of the forward contracts as the hedging instrument. Gains or losses relating to the
effective portion of the change in the fair value of the entire forward contract are recognized in Other Comprehensive
Income in the cash flow hedging reserved in equity.
The amount accumulated in equity is reclassified in the periods when the hedging instrument affects profit and loss
when the hedged item subsequently results in the recognition of a non-financial asset, both the deferred hedging
gains and losses and the deferred forward points, if any, are included in the initial cost of the asset. The deferred
amounts are ultimately recognized in profit and loss as the hedging instrument affects profit and loss.
When a hedging instrument expires, is sold or terminated, or when the hedge no longer meets the criteria for hedge
accounting, any cumulative deferred gains or losses and deferred cost of hedging in equity at that time remains in eq-
uity until the forecast transaction occurs, resulting in the recognition of a non-financial asset. When the forecast trans-
action is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in
equity are immediately reclassified to profit and loss.
7 Staff costs
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Wages and salaries 57,000 13,269 8,168 2,687
Share-based payments 141 80 141 80
Pension cost, defined contribution plans 281 102 89 51
Other social security costs 932 138 241 52
58,354 13,589 8,639 2,870
Average number of employees 94 70 44 31
Wages and salaries, pension contributions and other social security costs are considered to be short-term employee benefits.
Key management personnel compensation
Key management personnel consists of the Executive Leadership and the Board of Directors. The compensation paid or
payable to key management personnel for employee services is shown below:
Wages and salaries 4,936 785 4,818 702
Share-based payment 46 31 46 31
Pension contribution 24 18 12 111
Other social security costs 14 112 21 15
Total compensation key management personnel 5,020 946 4,897 859
Executive Board
Wages and salaries 270 222 270 222
Pension contribution 2 4 2 4
272 226 272 226
Board of Directors
Board fee 66 13 60 9
Total compensation Executive Board and Board of Directors 338 239 332 235
Annual Report 2022MFT Energy A/S
60
Notes to the financial statements
7 Staff costs, continued
Share-based payments
Warrant program
The Parent Company has established a warrant program in order to motivate and retain certain key employees. In
December 2022, 475 warrants were granted under the program (December 2021, 753). The warrants are exercisable
within 1 year as of January 2026 or upon an exit event, whichever is earlier. Settlement is in shares of MFT Energy A/S.
The warrants are granted in accordance with the authorizations given to the Board of Directors by the shareholders.
The Board of Directors has fixed the terms of and size of the grants, taking into account authorization from the share-
holders, the Group’s guidelines for incentive pay, an assessment of expectations of the recipient’s work efforts and
contribution to the Group’s growth, as well as the need to motivate and retain the recipient. The grant takes place on
the establishment of the program. The warrants granted are subject to the provisions of the Danish Companies Act
regarding termination of employees prior to their exercise of warrants in the case of recipients covered by the Act.
The fair value of the warrants has been determined based on a Black-Scholes option pricing model. The data input for
the pricing model is based on historical share prices of a peer group with the same vesting period.
In 2022, the fair value of warrants recognized in the income statement amounted to EUR 57k (2021: EUR 15k). No key
management personnel is included in the warrant program. The employees that have been given warrants have the
option of buying the predefined number of shares at a predefined value. The value that the employees are able to buy
the share for is equivalent to the market price.
The Board of Directors is covered by a comparable warrant program, however, this had no financial implications in
either 2022 or 2021. In order to participate in the program, individuals must have served as a member of the Board of
Directors for a continuous period of minimum 12 months.
GROUP
Number of shares 2022 2021
Outstanding at the beginning of the period 2,039 1,286
Granted during the period 475 753
Outstanding at the end of the period 2,514 2,039
Weighted average remaining contractual life 5 years 6 years
None of the warrants are exercisable at the end of the period.
Annual Report 2022
61
MFT Energy A/S
Notes to the financial statements
7 Staff costs, continued
Share purchase program
In 2021, MFT Energy A/S established share purchase programs aimed at attracting and retaining employees with a
useful set of skills. The share purchase programs give these employees the opportunity to become co-owners of MFT
Energy A/S. The programs are unchanged in 2022 and no additional programs have been incurred during 2022.
Under the share purchase programs, the employees obtain a legal non-recourse shareholder loan from MFT Energy A/S
which together with an injection of private funds from the employees are used to purchase a fixed number of shares.
The shares are locked until December 31, 2031 unless an exit event occurs before this point in time.
The share purchase programs are accounted for as an equity-settled share-based payment transaction, as the
economic nature of the program exhibits the characteristics of an option.
The fair value of the share purchase programs has been determined based on a Black-Scholes option pricing model.
The data input for the pricing model was based on historical share prices of a peer group with the same vesting period.
In 2022, the total fair value of employee share purchase programs recognized in the income statement amounted to
EUR 84k (2021: EUR 65k) of which EUR 46k (2021: EUR 31k) relates to key management personnel.
2022 GROUP
Number of shares
Key
management
Other
employees Total
Outstanding at the beginning of the period 5,103 5,103 10,206
Granted during the period 0 0 0
Outstanding at the end of the period 5,103 5,103 10,206
Weighted average remaining contractual life 9 years 9 years 9 years
2021 GROUP
Number of shares
Key
management
Other
employees Total
Outstanding at the beginning of the period 0 0 0
Granted during the period 5,103 5,103 10,206
Outstanding at the end of the period 5,103 5,103 10,206
Weighted average remaining contractual life 10 years 10 years 10 years
Annual Report 2022MFT Energy A/S
62
Notes to the financial statements
7 Staff costs, continued
Accounting policies
Staff costs
Staff costs comprise direct wages and salaries, pension contributions, social security contributions, sick leave, and
bonuses, which are recognized in the year in which the associated services are rendered by employees of the Group.
Employee benefits - Pensions
For defined contribution plans, the Group and the Parent Company pay contributions to publicly or privately admin-
istered pension insurance plans on a mandatory, contractual or voluntary basis. MFT Energy has no further payment
obligations once the contributions have been paid. The contributions are recognized as employee benefits expenses
when they are due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in
the future payments is available.
Share-based payments
A number of employees have been granted equity-settled warrants. Issued warrants become exercisable after a cer-
tain period of time or upon an earlier exit event subject to the employee still being employed at the exercise date. The
grant date fair value is recognized as a compensation expense over the vesting period with a corresponding entry in
equity.
At the end of each period, MFT Energy revises its estimates of the number of warrants that are expected to vest based
on service conditions. Adjustments, if any, are recognized in profit or loss, with a corresponding adjustment of equity.
Share purchase programs
A number of employees have been granted the option to purchase a fixed number of shares in MFT Energy A/S. The
purchase is financed through a non-recourse loan from MFT Energy A/S and a down payment by the employee. The
shares cannot be sold until an exit event. The nature of the arrangement is considered an option arrangement due to
the non-recourse financing from MFT Energy A/S. Consequently, the arrangement is accounted for as an employee
warrant program.
8 Other operating expenses
PARENT
EUR ‘000 2022 2021
Reimbursements to subsidiaries -635,103 -83,092
-635,103 -83,092
Accounting policies
MFT Energy A/S has entered into gross profit-split agreements with its subsidiaries. As part of its daily operations, the
primary portion of the gross profit is realized by MFT Energy A/S on behalf of its subsidiaries and transferred directly
to the respective subsidiary on a monthly basis. The realized gross profit is considered an operating expense in MFT
Energy A/S when the gross profit realized for the year traded on behalf of the subsidiaries is positive, and it comprises
solely of reimbursements to the subsidiaries.
Annual Report 2022
63
MFT Energy A/S
Notes to the financial statements
9 Financial income and expenses
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Financial income
Gains on foreign-exchange forward derivatives 303 0 303 0
Other financial income 1,274 100 1,217 22
Total financial income 1,577 100 1,520 22
Financial expenses
Interest on borrowings 429 511 429 511
Interest on lease liabilities 2 5 2 5
Total interest expense related to financial liabilities
not at fair value through profit or loss 431 516 431 516
Foreign exchange rate losses 1,772 310 1,798 297
Loss on exchange forward derivatives 0 173 0 173
Other financial expenses 2,439 674 4,115 590
Total financial expenses 4,642 1,673 6,344 1,576
Accounting policies
Financial income and expenses
Financial income and expenses comprise interest income and interest expenses, realized and unrealized exchange rate
adjustments, fair value adjustment of current asset investments as well as interest on extra payments and repayment
under the on-account taxation scheme and interest in respect of lease liabilities.
Other financial income primarily comprises realized gains on exchange forward derivatives as well as interest income.
Other financial expenses primarily comprise realized and unrealized exchange rate adjustments as well as interest
expenses.
Foreign currency translation
Foreign currency translation of receivables from and payables to subsidiaries is recognized in the income statement of
MFT Energy A/S, under financial income or financial expenses. This is only relevant for the Parent Company.
Annual Report 2022MFT Energy A/S
64
Notes to the financial statements
10 Income tax expenses
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Current tax
Current tax on profit for the year 130,825 13,923 1,976 -1,104
Deferred income tax -4,433 -13 -4,396 -13
Income tax expense 126,392 13,910 -2,420 -1,117
GROUP
TEUR 2022 2021
Reconciliation of effective tax rate
Tax at the Danish tax rate of 22% (2021: 22%) 126,088 14,040
Tax effects of amounts which are not deductible (taxable)
in calculating taxable income:
Non-deductible expenses 81 30
Other adjustments 223 -160
Income tax expense 126,392 13,910
Effective tax rate 22% 22%
PARENT
EUR ‘000 2022 2021
Reconciliation of effective tax rate
Tax at the Danish tax rate of 22% (2021: 22%) 56,715 7, 363
Tax effects of amounts which are not deductible (taxable)
in calculating taxable income:
Income from investments in subsidiaries -59,208 -8,510
Non-deductible expenses 73 30
Income tax expense -2,420 -1,117
Effective tax rate -1% -3%
Accounting policies
The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on the
applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the company and its subsidiaries generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is sub-
ject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treat-
ment. The Group measures its tax balances either based on the most likely amount or the expected value, depending
on which method provides a better prediction of the resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. A deferred income
tax asset or liability is also not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by
the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or
the deferred income tax liability is settled.
Annual Report 2022
65
MFT Energy A/S
Notes to the financial statements
11 Intangible assets
GROUP
EUR ‘000
Incorporeal
rights Software Total
Cost:
At January 1, 2022 71 6 77
At December 31, 2022 71 6 77
Accumulated amortization and impairment:
At January 1, 2022 29 5 34
Amortization charge 2 1 3
At December 31, 2022 31 6 37
Carrying amount at December 31, 2022 40 0 40
Cost:
At January 1, 2021 71 6 77
At December 31, 2021 71 6 77
Accumulated amortization and impairment:
At January 1, 2021 27 3 30
Amortization charge 2 2 4
At December 31, 2021 29 5 34
Carrying amount at December 31, 2021 42 1 43
PARENT
EUR ‘000 Software Total
Cost:
At January 1, 2022 6 6
At December 31, 2022 6 6
Accumulated amortization and impairment:
At January 1, 2022 5 5
Amortization charge 1 1
At December 31, 2022 6 6
Carrying amount at December 31, 2022 0 0
Cost:
At January 1, 2021 6 6
At December 31, 2021 6 6
Accumulated amortization and impairment:
At January 1, 2021 3 3
Amortization charge 2 2
At December 31, 2021 5 5
Carrying amount at December 31, 2021 1 1
Annual Report 2022MFT Energy A/S
66
Notes to the financial statements
11 Intangible assets, continued
Software
Software comprises the cost associated with acquiring software licenses.
Incorporeal rights
Incorporeal rights comprise the cost associated with acquiring the rights for trading on exchanges.
Accounting policies
Intangible assets
Intangible assets are measured at cost less accumulated amortization and less any accumulated impairment losses.
Cost comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the as-
set is ready for use.
Amortization methods and useful lives
The Group amortizes intangible assets with a limited useful life, using the straight-line method over the following peri-
ods:
Software 3 years
Incorporeal rights 10 years
12 Property, plant and equipment
GROUP
EUR ‘000
Other fixtures,
fittings and
equipment
Leasehold
improve-
ments Total
Cost:
At January 1, 2022 50 58 108
Additions 111 11 122
At December 31, 2022 161 69 230
Accumulated depreciation and impairment:
At January 1, 2022 29 21 50
Depreciation charge 35 10 45
At December 31, 2022 64 31 95
Carrying amount at December 31, 2022 97 38 135
Cost:
At January 1, 2021 141 20 161
Additions 33 28 61
Transfers -27 27 0
Disposals -97 -17 -114
At December 31, 2021 50 58 108
Accumulated depreciation and impairment:
At January 1, 2021 60 3 63
Depreciation charge 20 12 32
Transfer -16 16 0
Reversed impairment and depreciation -35 -10 -45
At December 31, 2021 29 21 50
Carrying amount at December 31, 2021 21 37 58
Annual Report 2022
67
MFT Energy A/S
Notes to the financial statements
Accounting policies
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting pe-
riod.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
profit or loss.
Depreciation methods and useful lives
Depreciation is calculated using the straight-line method to allocate the cost of the assets, net of their residual values,
over their estimated useful lives as follows:
Leasehold improvements 3-5 years
Other fixtures, fittings and equipment 3-5 years
Impairment of assets
Other non-current assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carry-
ing amount exceeds its recoverable 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 separately iden-
tifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-gen-
erating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
12 Property, plant and equipment, continued
PARENT
EUR’000
Other fixtures,
fittings and
equipment
Leasehold
improve-
ments Total
Cost:
At January 1, 2022 50 58 108
Additions 104 11 115
At December 31, 2022 154 69 223
Accumulated depreciation and impairment:
At January 1, 2022 29 22 51
Depreciation charge 35 10 45
At December 31, 2022 64 32 96
Carrying amount at December 2022 90 37 127
Cost:
At January 1, 2021 141 20 161
Additions 33 28 61
Transfers -27 27 0
Disposals -97 -17 -114
At December 31, 2021 50 58 108
Accumulated depreciation and impairment:
At January 1, 2021 60 4 64
Depreciation charge 20 12 32
Transfer -16 16 0
Reversed impairment and depreciation -35 -10 -45
At December 31, 2021 29 22 51
Carrying amount at December 31, 2021 21 36 57
Annual Report 2022MFT Energy A/S
68
Notes to the financial statements
Accounting policies
MFT Energy leases various properties. Property contracts are typically made for 1 to 5 years but may have extension
and termination options.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of fixed payments (including in-substance fixed payments); any variable lease payment that is based
on an index or a rate, initially measured using the index or rate at the commencement date and the exercise price of a
purchase option if the Group is reasonably certain to exercise that option. Lease payments to be made under reason-
ably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease or lessee’s incremental borrowing rate if
the implicit interest rate cannot be readily determined.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
Right-of-use assets are measured at cost which comprises the amount of the initial measurement of the lease liability;
any initial direct costs; the estimated restoration costs and any lease payments made at or before the commencement
date less any lease incentives received.
Right-of-use assets are depreciated over the lease term on a straight-line basis.
Payments associated with short-term leases of property and all leases of low-value assets are recognized on a
straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less
without a purchase option. Low-value assets comprise IT equipment and small items of office furniture.
13 Leases
GROUP & PARENT
EUR ‘000 2022 2021
Amounts recognized in the balance sheet
Right-of-use assets
Properties 45 155
45 155
Additions to the right-of-use assets 0 146
Lease liabilities
Current 47 111
Non-current 0 47
47 158
Amounts recognized in the income statement
The income statement shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Properties 110 88
110 88
Interest expense on lease liabilities 2 5
Expenses relating to short-term leases 123 105
Expenses relating to leases of low-value assets 48 35
Total cash outflow for leases 283 233
Please refer to note 6 for a disclosure of contractual maturities of the financial liabilities.
Annual Report 2022
69
MFT Energy A/S
Notes to the financial statements
14 Deferred tax
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Deferred tax
Deferred tax at the beginning of the period -14 -1 -14 -1
Deferred tax recognized in the income statement -4,433 -13 -4,396 -13
Deferred tax at year end -4,447 -14 -4,410 -14
Deferred tax relates to:
Property, plant and equipment -10 -15 -10 -15
Deferred tax on accrued expenses -37 0 0 0
Provisions -4,400 0 -4,400 0
Lease liabilities 0 1 0 1
Total -4,447 -14 -4,410 -14
Of which presented as deferred tax assets 4,447 14 4,410 14
Deferred tax assets and liabilities are offset as they relate to income tax with the same taxation authority and a legal
right exists to set them off.
Accounting policies
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those
temporary differences and losses.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and
liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabil-
ities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or
to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or
directly in equity, respectively.
15 Investments in subsidiaries
PARENT
EUR ‘000 2022 2021
Cost at January 1 1,869 1,869
Disposals for the year -5 0
Cost at December 31 1,864 1,869
Value adjustments at January 1 44,114 5,489
Profit for the year 269,126 38,613
Dividend to the Parent Company -21,499 -40
Other adjustments -219 52
Value adjustments at December 31 291,522 44,114
Carrying amount at December 31 293,386 45,983
Annual Report 2022MFT Energy A/S
70
Notes to the financial statements
15 Investments in subsidiaries, continued
Investments in subsidiaries are specified as follows:
Name
Place of
registered office Share capital
Votes and
ownership
MFT Energy 1 ApS Denmark DKK 55,626 90%
MFT Energy 2 ApS Denmark DKK 50,000 60%
MFT Energy 3 ApS Denmark DKK 50,000 60%
MFT Energy 4 ApS Denmark DKK 50,000 100%
MFT Energy 5 ApS Denmark DKK 50,000 61%
MFT Energy 6 ApS Denmark DKK 56,000 54%
MFT Energy Kosovo L.L.C Kosovo EUR 1,000 61%
MFT Energy US Inc. USA USD 1,000 100%
MFT Energy US POWER LLC USA USD 0 100%
MFT Energy US 1 LLC USA USD 0 75%
MFT Energy US 2 LLC USA USD 0 100%
MFT Energy APAC Holding Pte. Ltd. Singapore SGD 0 80%
MFT Energy PTE. LTD. Singapore SGD 1 100%
MFT Energy Singapore Pte. Ltd. Singapore SGD 2 80%
MFT Energy Australia Pty. Ltd Australia AUD 100 71%
MFT Energy See Enerji A.S. Türkiye TRY 2,000,000 61%
MFT Energy APAC 3 KK Japan JPY 5,000,000 80%
Accounting policies
The accounting policies below are only relevant for the preparation of the separate financial statements.
Investments in subsidiaries are recognized using the equity method of accounting. Consequently, investments are ini-
tially recognized at cost and subsequently adjusted to recognize MFT Energy A/S’s share of the post-acquisition profits
or losses of the investee in other comprehensive income. Dividends received are recognized as a reduction in the carry-
ing amount of the investment. Where the recoverable amount of the subsidiary is lower than cost, the carrying amount
of the subsidiaries is written down to this lower value.
Where MFT Energy A/S’s share of losses in a subsidiary equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, MFT Energy A/S does not recognize further losses, unless it has incurred obligations
or made payments on behalf of the subsidiary.
Unrealized gains on transactions between MFT Energy A/S and its subsidiaries are eliminated to the extent of MFT En-
ergy A/S’s interest in these subsidiaries. Unrealized losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed
where necessary to ensure consistency with the policies of MFT Energy A/S.
Annual Report 2022
71
MFT Energy A/S
Notes to the financial statements
16 Non-controlling interests
A significant part of the group’s activities is performed through a subsidiary with significant non-controlling interests.
Set out below is summarised financial information for each subsidiary that has non-controlling interests that are mate-
rial to the group. The amounts disclosed for each subsidiary are before intercompany eliminations.
Beside, summarized financial information for MFT Energy 6 ApS is presented:
GROUP
EUR ‘000 2022 2021
Non-controlling interests’ ownership 45.69% 45.48%
Summarised balance sheet
Current assets 48 17
Current liabilities 124,999 6,557
Current net assets -124,951 -6,540
Non-current assets 493,642 25,397
Non-current liabilities 0 0
Non-current net assets 493,642 25,397
Summarised statement of comprehensive income
Gross profit 497,175 26,328
Profit for the period 363,828 18,358
Other comprehensive income 0 0
Total comprehensive income 363,828 18,358
Profit allocated to non-controlling interests 166,250 8,349
Dividends paid to non-controlling interests 6,364 0
Summarised cash flows
Cash flows from operating activities 482,364 24,692
Cash flows from investing activities 0 0
Cash flows from financing activities -482,371 -24,820
Net increase/(decrease) in cash and cash equivalents -7 -128
Annual Report 2022MFT Energy A/S
72
Notes to the financial statements
17 Inventories
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Gas storage at weighted average cost 44,629 13,790 44,629 13,790
Basis adjustment from fair value hedging -11,609 -3,070 -11,609 -3,070
Total inventories 33,020 10,720 33,020 10,720
Amounts recognized in profit and loss
Inventories recognized as an expense during 2022 amounted to EUR 705,626k (2021: EUR 103,754k). These were includ-
ed in cost of sale.
There has been no write-down of inventories to net realizable value during 2022 and 2021.
GROUP PARENT
EUR ‘000 Assets Liabilities Total Assets Liabilities Total
Accumulated fair value adjustments
at January 1, 2022 -3,070 0 -3,070 -3,070 0 -3,070
Fair value adjustments
during the year -8,539 0 -8,539 -8,539 0 -8,539
Accumulated fair value
adjustments at December 31,
2022 -11,609 0 -11,609 -11,609 0 -11,609
As described in detail in note 6, the Group hedges the price risk of gas inventory. Such contracts are designated as fair
value hedges of the gas inventory.
The Group has designated the spot component of gas swap contracts as the hedging instrument. The cumulative fair
value adjustment included in inventories as of December 31, 2022 amounted to EUR 11,609k (2021: EUR 3,070k).
The cumulative fair value adjustment recognized in the carrying amount of inventories during 2022 amounted to a
negative EUR 8,539k (2021: a negative EUR 3,070k). The Group uses hedging in accordance with the written principles
set out by the Risk Committees, hence, all storages are hedged unless otherwise stated in the mandates given. As of
December 31, 2022, one supply has not been hedged according to the approved mandate, as the supply has to be real-
ized within Q3 2023 and was only injected during November 2022 with a certain price limit. The notional amount as of
December 31, 2022 was EUR 1,402k (MWh 24,079). As of December 31, 2022, the fair value adjustment was a negative
EUR 747k. The fair value adjustments, as well as any ineffectiveness, are included in the line item fair value adjustment
of financial and physical energy contracts, along with the adjustment of the other trades and hedge positions.
Accounting policies
Inventories comprise gas used for trading. Inventories are measured at the lower of cost under the weighted average
cost method adjusted for gains and losses from hedging instruments and net realizable value. The net realizable value
of inventories is calculated at the amount expected to be generated by sale of the inventories in the process of normal
operations less selling expenses.
MFT Energy A/S hedges the fair value of its inventory of gas and applies fair value hedge accounting. Consequently,
changes in the fair value of the hedged item attributable to the gas price risk is recorded as an adjustment to the car-
rying value of the inventory. The carrying amount of inventory is recognized in profit or loss when the gas is sold, along
with any fair value adjustments from fair value hedges.
Fair value hedges that qualify for hedge accounting
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or
loss. Changes in the fair value of the hedged item attributable to the hedged risk is recorded as part of the carrying
amount of the hedged item and is also recognized in profit or loss. The gain or loss relating to the ineffective portion is
recognized in profit or loss within fair value adjustment of financial and physical energy contracts.
If the hedge no longer meets the criteria for hedge accounting, the adjustment of the carrying amount of a hedged
item is recognized in profit or loss at the time when the hedged item is recognized in profit or loss.
Annual Report 2022
73
MFT Energy A/S
Notes to the financial statements
18 Trade receivables
GROUP
EUR ‘000 2022 2021
Trade receivables from contracts 33,346 21,037
Loss allowance 0 0
Net trade receivables 33,346 21,037
PARENT
EUR ‘000 2022 2021
Trade receivables from contracts 29,083 20,833
Loss allowance 0 0
Net trade receivables 29,083 20,833
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair
value.
Please refer to note 6 for a description of the expected credit losses and risks regarding trade receivables.
Accounting policies
Trade receivables are amounts due from power and gas sold as part of the ordinary course of business. Trade receiv-
ables are recognized initially at the amount of consideration that is unconditional. The Group holds the trade receiv-
able with the objective of collecting the contractual cash flows and therefore measures them subsequently at amor-
tized cost using the effective interest method, less allowance for lifetime expected credit losses. MFT Energy applies
the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss for all trade
receivables.
Impairment losses on trade receivables are presented as net impairment losses operating profit. Subsequent recoveries
of amounts previously written down are recognized as a reduction of costs in the same line item.
Annual Report 2022MFT Energy A/S
74
Notes to the financial statements
19 Fair value measurement
Derivative financial instruments in MFT Energy mainly consist of commodity derivatives that are traded as part of the
Group’s ordinary business activity.
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. Financial risks relating to the financial instruments are
managed on a portfolio basis.
The Group measures the following financial assets and liabilities at fair value:
• Gas derivatives
• Power derivatives
• Foreign currency derivatives
This section explains estimates made in determining the fair value of the financial instruments that are recognized and
measured at fair value through profit and loss in the financial statements. To provide an indication about the reliability
of the inputs used in determining fair value, the Group has classified its financial instruments into three levels pre-
scribed under the accounting standards.
Exchange-traded derivatives as well as foreign exchange contracts are measured using closing prices provided by
the exchanges at the balance sheet date. These derivatives are categorized as level 1 of the fair value hierarchy.
Exchange-traded derivatives are typically considered settled through the payment or receipt of variation margin.
Over-the-counter (OTC) financial swaps and physical commodity sale and purchase contracts, including commodity
forwards, are generally measured using readily available information in the public markets, and if necessary, quotations
provided, by brokers and price index developers. These quotes are corroborated with market data and are predomi-
nately categorized as level 2 of the fair value hierarchy.
Structured and capacity contracts of MFT Energy A/S are measured using internal models. Internal models refer to
standard valuation models that use market forward levels on standard instruments, as well as incorporating inputs for
the volatility of the underlying indices, markets or commodities.
The level 3 fair value measurements are limited to energy capacities that are deemed to be non-own use contracts.
Since there are no active markets for these long-term products spreads, the fair value of a given product is estimated
based on the future spreads between the given market areas. The measurement of the products is Management’s best
estimate, as no explicit and observable market price exists between the market areas. As a consequence of the unob-
servable market prices, the product is classified as level 3 in the fair value hierarchy.
Valuation processes
The valuation process of the derivatives includes input from relevant employees of MFT Energy, and the final measure-
ment is verified and approved by the Risk Team. In order to minimize the use of subjective estimates or modifications
of parameters and calculation models, it is MFT Energy’s policy to determine fair values based on the external infor-
mation that most accurately reflects the market values. The Group uses pricing services and benchmark services to
increase data quality. MFT Energy’s policy is to recognize transfers into and out of fair value hierarchy levels at the end
of each reporting period.
Annual Report 2022
75
MFT Energy A/S
Notes to the financial statements
19 Fair value measurement, continued
The below table sets out the fair value hierarchy for assets and liabilities measured at fair value in the balance sheet:
2022 GROUP
EUR ‘000
Quoted
prices in
active
markets
Level 1
Significant
observable
inputs
Level 2
Un-
observ able
input
Level 3 Total
Financial assets
Power trading derivatives 4,129 234 0 4,363
Gas trading derivatives 0 162,011 0 162,011
Foreign currency derivatives 253 0 0 253
Total financial assets at fair value 4,382 162,245 0 166,627
Non-financial assets
Gas trading inventories 0 -11,609 0 -11,609
Total financial and non-financial assets 4,382 150,636 0 155,018
Financial liabilities
Power trading derivatives 3,656 802 0 4,458
Gas trading derivatives 0 174,570 0 174,570
Total financial liabilities at fair value 3,656 175,372 0 179,028
2021 GROUP
EUR ‘000
Quoted
prices in
active
markets
Level 1
Significant
observable
inputs
Level 2
Un-
observ able
input
Level 3 Total
Financial assets
Power trading derivatives 513 122 1 636
Gas trading derivatives 0 330,083 2,603 332,686
Foreign currency derivatives 43 0 0 43
Total financial assets at fair value 556 330,205 2,604 333,365
Non-financial assets
Gas trading inventories 0 -3,070 0 -3,070
Total financial and non-financial assets 43 327,013 2,603 329,659
Financial liabilities
Power trading derivatives 392 0 279 671
Gas trading derivatives 0 336,832 203 3 37,035
Foreign currency derivatives 6 0 0 6
Total financial liabilities at fair value 398 336,832 482 337, 712
Annual Report 2022MFT Energy A/S
76
Notes to the financial statements
19 Fair value measurement, continued
The below table sets out the fair value hierarchy for assets and liabilities measured at fair value in the balance sheet:
2022 PARENT
EUR ‘000
Quoted
prices in
active
markets
Level 1
Significant
observable
inputs
Level 2
Un-
observ able
input
Level 3 Total
Financial assets
Power trading derivatives 4,129 0 0 4,129
Gas trading derivatives 0 162,010 0 162,010
Foreign currency derivatives 253 0 0 253
Total financial assets at fair value 4,382 162,010 0 166,392
Non-financial assets
Gas trading inventories 0 -11,609 0 -11,609
Total financial and non-financial assets 4,382 150,401 0 154,783
Financial liabilities
Power trading derivatives 3,656 782 0 4,438
Gas trading derivatives 0 174,571 0 174,571
Foreign currency derivatives 0 0 0 0
Total financial liabilities at fair value 3,656 175,353 0 179,009
2021 PARENT
EUR ‘000
Quoted
prices in
active
markets
Level 1
Significant
observable
inputs
Level 2
Un-
observ able
input
Level 3 Total
Financial assets
Power trading derivatives 513 122 1 636
Gas trading derivatives 0 330,083 2,603 332,686
Foreign currency derivatives 43 0 0 43
Total financial assets at fair value 556 330,205 2,604 333,365
Non-financial assets
Gas trading inventories 0 -3,070 0 -3,070
Total financial and non-financial assets 556 327,135 2,604 330,295
Financial liabilities
Power trading derivatives 392 0 279 671
Gas trading derivatives 0 336,832 203 3 37,035
Foreign currency derivatives 6 0 0 6
Total financial liabilities at fair value 398 336,832 482 337, 712
Annual Report 2022
77
MFT Energy A/S
Notes to the financial statements
Derivative financial instruments and commodity contracts not held for own use
Financial derivatives are initially recognized at fair value on the date the derivative contract is entered into and are
subsequently remeasured at fair value at the end of the reporting period. The subsequent accounting treatment
depends on whether the derivatives are designated as hedging instrument and, if so, the nature of the item being
hedged. If derivatives are not designated as hedging instruments, they are classified as “held for trading” for account-
ing purposes and initially recognized at fair value with subsequent remeasurement at fair value through profit and loss
and recognized in the balance sheet.
Derivatives may be designated as hedging instruments, and the Group may designate derivatives as either:
• hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedges), or
• hedges of a particular risk associated with the cash flow of recognized assets and liabilities and highly probable
forecast transactions (cash flow hedges).
At inception of the hedging relationship, the Group documents the economic relationship between hedging instru-
ments and hedged items, including whether changes in the cash flow of the hedging instruments are expected to
offset changes in the cash flow of hedged items. The Group documents its risk management objective and strategy for
undertaking its hedging transactions.
The full fair value of a hedging instrument is classified as a non-current asset or liability when the remaining maturity
of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of
the hedged item is less than 12 months.
19 Fair value measurement, continued
Accounting policies
Fair value measurement
The Group measures financial instruments, such as derivatives, 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 be-
tween market participants at the measurement 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 liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their best economic interest.
Commodity contracts which allow for physical settlement, but are considered not entered into for the purpose of the
Group’s own use, are measured similar to financial commodity contracts.
MFT Energy uses valuation techniques that are appropriate in the circumstances and for which sufficient data are avail-
able to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized ac-
cording to the fair value hierarchy, described as follows, 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 liabilities
• Level 2 - valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
• Level 3 - valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
Annual Report 2022MFT Energy A/S
78
Notes to the financial statements
20 Financial assets and financial liabilities
The Group and the Parent Company hold the following financial instruments:
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Financial assets
Financial assets measured at fair value through profit and loss
Derivatives and commodity contracts not entered into
for own use 166,627 333,365 166,392 333,365
Derivatives in hedge accounting, inventory -11,609 -3,070 -11,609 -3,070
155,018 330,295 154,783 330,295
Financial assets at amortized cost
Deposits 300 236 245 208
Trade receivables 33,346 21,037 29,083 20,833
Receivables from group enterprises 1,254 375 15,062 5,986
Other receivables 198,833 80,447 195,690 79,844
Current asset investments 348,888 0 348,888 0
Cash and cash equivalents 134,344 34,511 127,67 7 32,306
716,965 136,606 716,645 139,177
Financial assets 871,983 466,901 871,428 469,472
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Financial liabilities
Financial liabilities measured at fair value through profit and
loss
Derivatives and commodity contracts not entered into
for own use 179,028 3 37, 712 179,009 337, 712
179,028 337,712 179,009 337, 712
Financial liabilities at amortized cost
Trade payables 55,010 50,640 55,010 50,638
Borrowings 5,611 7,4 42 5,611 7,4 42
Payables to group enterprises 0 0 6 47, 391 87,10 8
Lease liabilities 47 158 47 158
Corporate tax liabilities 125,578 14,193 0 0
Other payables 37,539 9,774 5,324 2,528
223,785 82,207 713,383 147,874
Financial liabilities 402,813 419,919 892,392 485,586
Annual Report 2022
79
MFT Energy A/S
Notes to the financial statements
20 Financial assets and financial liabilities, continued
GROUP
2022 2021
EUR ‘000 Current Non-current Total Current Non-current Total
Borrowings
Credit institutions 1,008 4,603 5,611 712 5,385 6,097
Other loans 0 0 0 0 1,345 1,345
1,008 4,603 5,611 712 6,730 7, 442
PARENT
2022 2021
EUR ‘000 Current Non-current Total Current Non-current Total
Borrowings
Credit institutions 1,008 4,603 5,611 712 5,385 6,097
Payables to group enterprises 0 6 47, 391 6 47,39 1 0 87,10 8 87,10 8
Other loans 0 0 0 0 1,345 1,345
1,008 651,994 653,002 712 93,838 94,550
In terms of borrowings, the fair values are not materially different from their carrying amounts, since the interest pay-
able on those borrowings is either close to current market rates or the borrowings are of a short-term nature.
Payables to group enterprises carry a fixed rate, but the outstanding amount changes continuously. The remaining out-
standing borrowings carried a floating interest rate in both 2022 and 2021.
Accounting policies
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other pay-
ables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They
are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest
method.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently mea-
sured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognized in profit or loss over the terms of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down oc-
curs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is
capitalized as a prepayment for liquidity services and amortized over the term of the facility to which it relates.
Annual Report 2022MFT Energy A/S
80
Notes to the financial statements
21 Offsetting financial assets and financial liabilities
2022 GROUP
Related amounts not set
off in the balance sheet
EUR ‘000
Gross
amounts Offsetting
Net
amounts
presented
in the
balance
sheet
Cash
collateral
(received/
pledged)
Net
amount
Financial assets
Trade receivables 204,300 -170,954 33,346 31,986 65,332
Derivatives held for trading 1,218,999 -1,063,981 155,018 0 155,018
Total financial assets 1,423,299 -1,234,935 188,364 31,986 220,350
Financial liabilities
Trade payables 225,964 -170,954 55,010 -66,667 -11,657
Derivatives held for trading 1,243,009 -1,063,981 179,028 -9,191 169,837
Total financial liabilities 1,468,973 -1,234,935 234,038 -75,858 158,180
Offsetting of financial assets and liabilities in the financial statements requires the following criteria to be fulfilled:
• that MFT Energy A/S currently has a legally enforceable right to set off the recognized amounts, and
• that MFT Energy A/S intends either to settle on a net basis, or to realize the assets and settle the liabilities
simultaneously.
In the event that a counterparty or the Group defaults, further offsetting will take place.
This note discloses the offsetting in the financial statements, further netting according to enforceable master netting
agreements and similar agreements (i.e. in the event of default) and collateral provided or received under such agree-
ments.
2021 GROUP
Related amounts not set
off in the balance sheet
EUR ‘000
Gross
amounts Offsetting
Net
amounts
presented
in the
balance
sheet
Cash
collateral
(received/
pledged)
Net
amount
Financial assets
Trade receivables 114,503 -93,466 21,037 5,451 26,488
Derivatives held for trading 810,176 -476,811 333,365 0 333,365
Total financial assets 924,679 -570,277 354,402 5,451 359,853
Financial liabilities
Trade payables 144,106 -93,466 50,640 -27, 376 23,264
Derivatives held for trading 814,523 -476,811 337, 712 -2,264 335,448
Total financial liabilities 958,629 -570,277 388,352 -29,640 358,712
Annual Report 2022
81
MFT Energy A/S
Notes to the financial statements
21 Offsetting financial assets and financial liabilities, continued
2022 PARENT
Related amounts not set
off in the balance sheet
EUR ‘000
Gross
amounts Offsetting
Net
amounts
presented
in the
balance
sheet
Cash
collateral
(received/
pledged)
Net
amount
Financial assets
Trade receivables 197,520 -168,437 29,083 31,986 61,069
Derivatives held for trading 1,070,543 -915,760 154,783 0 154,783
Total financial assets 1,268,063 -1,084,197 183,866 31,986 215,852
Financial liabilities
Trade payables 223,447 -168,437 55,010 -66,667 -11,657
Derivatives held for trading 1,094,769 -915,760 179,009 -9,191 169,818
Total financial liabilities 1,318,216 -1,084,197 234,019 -75,858 158,161
2021 PARENT
Related amounts not set
off in the balance sheet
EUR ‘000
Gross
amounts Offsetting
Net
amounts
presented
in the
balance
sheet
Cash
collateral
(received/
pledged)
Net
amount
Financial assets
Trade receivables 114,299 -93,466 20,833 5,451 26,284
Derivatives held for trading 810,176 -476,811 333,365 0 333,365
Total financial assets 924,475 -570,277 354,198 5,451 359,649
Financial liabilities
Trade payables 144,104 -93,466 50,638 -27,390 23,248
Derivatives held for trading 814,523 -476,811 337, 712 -2,264 335,448
Total financial liabilities 958,627 -570,277 388,350 -29,654 358,696
Accounting policies
Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet where the
Group currently has a legally enforceable right to offset the recognized amounts and there is an intention to settle on
a net basis or realize the asset and settle the liability simultaneously.
MFT Energy 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 MFT Energy and its counterparties to
set off financial liabilities against financial assets in the ordinary course of business as well as in case of default. Contracts
which do not meet the offsetting criteria because the offsetting right is not unconditional are disclosed in the notes.
Annual Report 2022MFT Energy A/S
82
Notes to the financial statements
22 Other receivables
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Deposits related to trading 197,223 79,119 194,163 78,800
Other receivables 171 387 137 102
Other receivables, net 197,394 79,506 194,300 78,902
Deposits related to trading are cash amounts that need to be provided to specific counterparties in order to initiate a
trading position and cover margin calls.
Accounting policies
Other receivables consist of deposits related to trading, VAT receivable and miscellaneous receivables. Other receiv-
ables are measured at amortized cost. Deposits represent the amount of cash required for trading positions with cer-
tain counterparties.
23 Current asset investments
GROUP & PARENT
EUR ‘000 2022 2021
Government bonds 348,888 0
Total current asset investments 348,888 0
During 2022, the Group purchased solely German government bonds, all of which had a short maturity period. The
bonds have been purchased in order to mitigate the risk and ensure interest revenue on income for the excess liquidity.
Accounting policies
Current assets investments
Current assets investments include bonds that are measured at amortized cost, which are recognized initially at fair
value plus any transaction costs incurred. Subsequently, the bonds are measured at amortized cost using the effective
interest method, which takes into account the premium and the expected cash flows over the life of the bonds.
Interest income and any amortization of premium are recognized in the income statement using the effective interest
rate. The interest income is recognized over the life of the bond, and any premium is amortized accordingly.
Annual Report 2022
83
MFT Energy A/S
Notes to the financial statements
24 Share capital
GROUP & PARENT
2022 2021
Number
of shares
TEUR
Nominal
value
Number
of shares
TEUR
Nominal
value
The share capital comprises:
Ordinary shares (fully paid) 510,206 68 510,206 68
EUR ‘000 2022 2021
Changes in share capital
Opening balance 68 67
Capital increase 0 1
Total 68 68
The share capital of EUR 68k at December 31, 2022 (2021: EUR 68k) is divided into 510,206 (2021: 510,206) shares at a
nominal value of DKK 1 each. No shares carry any special rights.
GROUP
EUR per share 2022 2021
Total dividend paid out for the year 31.6 0.1
Total dividend proposed for the year 0 0
The dividend distribution has no tax implications for MFT Energy Group or the Parent Company. All covenants are also
complied with.
Capital management
The capital structure is managed by MFT Energy A/S and covers the capital used in day-to-day operations throughout
the Group as well as planned capital returns to shareholders.
The capital management objectives are to safeguard the ability to continue as a going concern and to provide suffi-
cient returns for shareholders and benefits for other stakeholders, at the same time as an optimal capital structure is
maintained to reduce the cost of capital and increase the return on invested capital.
The long-term objective relating to the capital structure is to maintain a solvency ratio that is compliant with covenants
and sufficient to operate in the current and future market conditions. This will primarily be achieved through the con-
solidation of future results. The solvency ratio at December 31, 2022 amounted to 52.7% (December 31, 2021: 12.8%).
The solvency rate in 2021 was sufficient to generate the results realized in 2022; hence, 2022 solvency level does not
need to be maintained. The Group expects the solvency rate to drop during 2023.
Annual Report 2022MFT Energy A/S
84
Notes to the financial statements
24 Share capital, continued
Accounting policies
Equity reserves
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
Reserve for unpaid share capital
Unpaid share capital is recognized on a gross basis, according to which the unpaid share capital is recognized and
treated as a receivable in the balance sheet called “Claim for payment of company capital”. An amount corresponding
to the unpaid share capital is reclassified from “Retained earnings” to “Reserve for unpaid share capital”.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net changes in the fair value of hedging instru-
ments used in cash flow hedges pending subsequent recognition in profit or loss.
Reserve for loans to shareholders
The reserve for loans issued to shareholders for the purchase of shares in connection with the share purchase pro-
grams is mandatory according to the section for legal shareholder loans in the Danish Companies Act. The reserve may
only be reduced or eliminated by repayment of the issued loans.
Foreign currency translation reserve
Exchange differences arising on translation of the Parent Company and of foreign controlled entities into EUR are rec-
ognized in other comprehensive income and accumulated in a separate reserve within equity. The cumulative amount is
reclassified to profit or loss when the net investment is disposed of.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discre-
tion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Payments of dividends are subject to debt covenants.
Non-controlling interests
Equity attributable to non-controlling interests is recognized as a separate item within consolidated equity. Transactions
with non-controlling interests, including purchases and sales, are treated as equity transactions. Any gain or loss on such
transactions is re-attributed between equity attributable to owners of the Parent Company and non-controlling interests.
25 Provisions
GROUP & PARENT
EUR ‘000
Onerous
contracts Total
Provisions at January 1, 2022 0 0
Additions for the year 20,000 20,000
Provisions at December 31, 2022 20,000 20,000
Current/non-current classification:
Non-current provisions 8,405 8,405
Current provisions 11,595 11,595
Provisions at December 31, 2022 20,000 20,000
Provisions consist of onerous contracts with delivery from 2023 to 2027 and comprise contracts for which the unavoid-
able costs related to purchase of commodities exceed the economic benefits of the same commodities. The estimates
performed for the above provisions are explained in note 2.
Accounting policies
Provisions
Provisions are recognized when, due to an event occurring on or before the reporting date, the Group has a legal or
constructive obligation and it is probable that the Group will have to give up future economic benefits to meet the
obligation.
Provisions are measured on the basis of Management’s best estimate of the expected expenditure for settlement of
the relevant obligation and are discounted if deemed material.
Annual Report 2022
85
MFT Energy A/S
Notes to the financial statements
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
GROUP PARENT
EUR ‘000 Borrowings Leases Total Borrowings Leases
Payables
to group
enterprises Total
Net debt:
At January 1, 2021 7,676 99 7,77 5 7, 676 99 11,521 19,296
Cash flows -234 -88 -322 -234 -88 0 -322
Additions without cash effect 0 147 147 0 147 75,587 75,734
At December 31, 2021 7,442 158 7,600 7, 442 158 87,10 8 94,708
Cash flows -1,831 -111 -1,942 -1,831 -111 0 -1,942
Additions without cash effect 0 0 0 0 0 556,904 556,904
At December 31, 2022 5,611 47 5,658 5,611 47 644,012 649,670
Accounting policies
Statement of cash flows
The statement of cash flows shows the Group’s cash flows for the year broken down by operating, investing and fi-
nancing activities, changes for the year in cash and cash equivalents as well as the Group’s cash and cash equivalents
at the beginning and end of the year. Cash flows from operating activities are calculated as the net profit/loss for the
year adjusted for changes in working capital and non-cash operating items such as share-based payment expenses,
depreciation, amortization, and impairment losses. Working capital comprises current assets less short-term debt, ex-
cluding items included in cash and cash equivalents.
Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property, plant
and equipment as well as fixed asset investments. Cash flows from financing activities comprise cash flows from the raising
and repayment of long-term debt and principal element on lease payments as well as payments to and from shareholders.
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances.
26 Cash flow specifications
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Adjustments
Financial income -1,577 -1,624 -1,520 -1,497
Financial expenses 4,642 3,197 6,344 3,051
Depreciation, amortization and impairment charges 219 125 211 121
Income from investments in subsidiaries 0 0 -269,126 -38,613
Share-based remuneration 141 80 141 80
Income tax 126,392 13,910 -2,420 -1,117
Other adjustments -13 119 -657 196
129,804 15,807 -267,027 - 37, 779
Changes in net working capital
Change in inventories -22,300 -10,190 -22,300 -10,190
Change in trade receivables -12,309 -11,955 -8,250 -13,124
Change in derivatives as an asset 178,347 -324,226 178,582 -324,226
Change in other operating assets -118,612 -70,329 -116,026 -71,273
Change in trade payables 4,370 40,985 4,372 42,285
Change in derivatives as a liability -158,684 328,659 -158,703 328,659
Fair value adjustments of hedging instruments 0 1,228 0 1,228
Change in other operating liabilities 47,654 6,175 22,685 401
-81,534 -39,653 -99,640 -46,240
Annual Report 2022MFT Energy A/S
86
Notes to the financial statements
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Rental and lease obligations
MFT Energy has the following lease obligations related to low-
value and short-term leases. Total future lease payments are:
Within 1 year 86 165 5 11
Between 1 and 5 years 3 3 0 0
89 168 5 11
Other contingent liabilities
The group enterprises are jointly and severally liable for tax on the jointly taxed incomes, etc. of the Group. The total
amount of corporation tax payable is disclosed in the Annual Report of MFT Energy Holding ApS, which is the adminis-
tration company for joint taxation purposes. Moreover, the group enterprises are jointly and severally liable for Danish
withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent ad-
justments of corporation taxes and withholding taxes may increase the Company’s liability.
The Danish entities of the Group are jointly and severally liable for VAT on the joint registration of VAT. MFT Energy A/S
is the administration company for joint VAT purposes.
27 Contingent liabilities, commitments and contingencies
Contingent liabilities
GROUP
EUR ‘000 2022 2021
Charges and security
The following assets have been provided as security to the main bank facility:
Security comprising simple claims 4,303 4,303
Assets charged 153,111 16,004
Total charges and security 157,414 20,307
Charges and security
The Group has provided all its trade receivables in MFT Energy A/S as security for all outstanding amounts relating to
its main bank facility. The assets charged consist of two elements, as MFT Energy has provided some cash accounts
and government bond portfolios as security for guarantee facilities with its main bank. The present value of the securi-
ties is EUR 152,226k.
The Group has provided its shares in the Danish subsidiaries as security for all the outstanding amounts to its main
bank facility.
The Parent has entered into an equity guarantee agreement with certain minority owners. The agreements ensure the
equity of the minority owners in case of a default. The agreement terminates in September 2025. On December 31,
2022 the equity amounted to EUR 3,558k.
Annual Report 2022
87
MFT Energy A/S
Notes to the financial statements
Transactions with other related parties
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
The following transactions occurred with related parties:
MFT Energy Holding ApS
Proceeds from group enterprises -1,535 2,540 -1,535 2,540
Dividend payments to MFT Energy Holding ApS 15,806 50 15,806 50
Paid in share capital 0 50 0 50
Other related parties*
Purchase of services 36 12 36 12
Financial expenses 101 138 101 138
Proceeds from loans with other related parties -1,438 723 -1,438 723
* Other related parties comprise Rathjen Invest ApS, VORUP INVEST ApS, NOAK Holding ApS, BRAA INVEST A/S and NORDAL CLAUSEN
HOLDING ApS
28 Related party transactions
The Group is controlled by the following entity:
Ownership interests
Name of entity Type Place of business 2022 2021
MFT Energy Holding ApS Ultimate parent company Denmark 100% 98%
Related parties are defined as parties with control or significant influence, including group enterprises.
Other related parties comprise the Board of Directors and the Executive Board together with their immediate families.
Furthermore, other related parties include companies in which the aforementioned individuals have significant influ-
ence, joint control or control.
Transactions with members of the Board of Directors and the Executive Board are disclosed in the table for key man-
agement personnel.
Information about remuneration to key management personnel has been disclosed in note 7.
Investments in subsidiaries are set out in note 15.
Annual Report 2022MFT Energy A/S
88
Notes to the financial statements
28 Related party transactions, continued
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
Key management personnel
Purchase of services 129 3 129 3
Proceeds from loans in connection with share purchase
programs -54 438 -54 438
Group enterprisess
Income statement
Sale of services 6,921 5,121
Purchase of services 635,103 83,092
Balance sheet
Trade receivables 9,076 3,769
Loans obtained from group enterprises 556,904 87,108
Trade payables 3,379 11,521
Dividend paid 16,121 50
Dividend received 21,499 50
29 Fee to auditors appointed at the annual general meeting
GROUP PARENT
EUR ‘000 2022 2021 2022 2021
PricewaterhouseCoopers
Audit fee 64 31 43 23
Other assurance services 5 3 5 3
Tax advisory services 40 25 40 25
Other services 179 122 164 116
288 181 252 167
30 Subsequent events
In Marts 2023, an extraordinary dividend of EUR 150,000k was approved in MFT Energy 6 ApS of which EUR 68,539k
was disbursed from the Group. Furthermore, an extraordinary dividend of EUR 74,000k was approved in MFT Energy
A/S of which EUR 74,000 was disbursed from the Group. The dividend is not considered to materially impact the
Group's or Parent Company's financial posisition.
No further events have occurred since the balance sheet date which could materially impact the Group’s or the Parent
Company’s financial position.
Annual Report 2022
89
MFT Energy A/S
Notes to the financial statements
31 Definitions of financial ratios
The financial ratios have been calculated in accordance with the recommendations of CFA Society Denmark.
Gross margin = Gross profit x 100
Revenue
EBIT margin = Earnings before interest and tax (EBIT) x 100
Revenue
Scalability = Earnings before interest and tax (EBIT) x 100
Gross profit
Equity ratio = Equity at year end x 100
Total assets
Return on equity = Profit for the year x 100
Average equity
Average number of employees = Calculated as average number of full-time employees.
Annual Report 2022MFT Energy A/S
90
Executive Board
Board of Directors
Annual Report 2022MFT Energy A/S
92
Independent auditor’s report
Annual Report 2022MFT Energy A/S
93
CVR No 33 7 7 12 31
mne28705
mne35811
Annual Report 2022MFT Energy A/S
94
