Margrethepladsen 4, 3rd floor • DK-8000 Aarhus • CVR No 38 17 51 30
Energy A/S
ANNUAL REPORT 2023
Trading with
a purpose
The Annual Report was presented and adopted at the
Annual General Meeting of the Company on March 20, 2024
Chair of the General Meeting
MFT Energy A/S - Annual report 2023
IN FOCUS
IN FOCUS
IN FOCUS
MANAGEMENT’S REVIEW ................................. 4
Made for trading .....................................................5
Performance highlights 2023 .............................6
Five-year financial highlights & key ratios ...... 7
Letter from the CEO and Chair .........................8
Strategic highlights 2023 ...................................11
Business and strategy ......................................13
Global energy trading .........................................14
Platform excellence ...............................................15
Cutting-edge technology ....................................16
MFT Energy power ................................................19
MFT Energy gas .................................................... 20
MFT Energy environmentals ..............................21
ESG ...........................................................................23
New sustainability strategy ............................. 24
Environmental ........................................................ 29
Social .........................................................................31
Governance ........................................................... 33
UN Sustainable Development Goals ............ 35
Performance .........................................................36
Financial review .................................................... 37
Corporate matters ............................................40
Risk management .................................................. 41
Board of Directors ................................................ 46
FINANCIAL STATEMENTS ..............................48
Income statement and
comprehensive income ......................................50
Balance sheet .........................................................51
Statement of cash flows ...................................52
Statement of changes in equity .....................53
Notes to the financial statements ................55
STATEMENTS ........................................................96
Management’s statement ................................. 97
Independent auditor’s report ..........................98
Follow us on:
www.mft-energy.com
Contents Letter from the CEO
and Chair
Page 8
New sustainability
strategy
Page 24
Risk management in
ever-changing markets
Page 41
3
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
Power generation
is expected to triple
by 2050*, with renewables
accounting for a higher share
Driving increased
unpredictability in
national energy markets
Leading to a higher need
for grid balancing and
price optimization across
power markets
Due to the Paris Agreement, renewables are expected to become
dominant, accounting for approx. 50% of the power mix by 2030 and
approx. 85% by 2050
Renewables as an intermittent energy source cannot provide baseload and
will therefore not always be able to match demand, causing unpredictability
and volatility in power markets
As power markets become more intermittent with less baseload capacity, countries
will increasingly need to balance grids through import or export of power
MEGATRENDS
We provide energy
where needed
– to support the
green transition
*McKinsey report Global Energy Perspective
4
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
+40%
analysts and technology
profiles in front office
+100
machine learning
prediction models
38
markets with
trading access
>50%
algorithmic trading of
short-term power and gas
+25
data providers with millions
of daily datapoints
155
employees'
extensive experience
Energy exchanges
Energy production
Energy consumption
Distribution
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MFT Energy
Made For Trading
MFT Energy’s talented and dedicated
employees turns knowledge and data
into trading strategies and business
opportunities using in-depth market
knowledge, comprehensive data sets,
automation and analytical capabilities
from data to execution.
5
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
Scope 1, 2 and 3
(direct and indirect emissions)
Average CO
2
e emissions
per FTE
2022
5,511
6,201
2023
Tonnes CO
2
e (market-based)
2022
59
46
2023
Tonnes CO
2
e (market-based)
*A score above 30 is considered excellent according to www.greatplacetowork.com.
90% in 2022
53%
Equity ratio
71%
Scalability
53% by
end of 2022
72 mEUR
EBIT
576 mEUR
in 2022
55 eNPS 16 mEUR
employee satisfaction
in December 2023*
in tax contribution for 2023
(126 mEUR for 2022)
Performance highlights 2023
6
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
Five-year highlights & key ratios
GROUP
EUR ‘000 *
Income statement
Net trading income (Gross profit) 101,525 641,864 83,702 13,408 3,877
Operating profit before financial income and
expenses and tax (EBIT) 71,742 576,194 65,390 7,815 2,221
Net financials (3,295) (3,065) (1,573) (740) (256)
Profit before tax (EBT) 68,447 573,129 63,817 7,075 1,965
Profit for the year 51,952 446,737 49,907 5,524 1,525
Profit for the year attributable to
- Shareholders of MFT Energy A/S 36,471 260,214 34,587 4,703 1,442
- Non-controlling interests 15,481 186,523 15,320 821 83
Balance sheet
Balance sheet total 391,743 910,263 481,328 41,716 11,043
Equity 206,653 483,050 61,409 9,582 3,925
Equity attributable to
- Shareholders of MFT Energy A/S 133,624 288,778 45,000 8,493 3,789
- Non-controlling interests 73,029 194,272 16,409 1,089 136
Current asset investments 64,416 348,888 0 0 0
Cash and cash equivalents 106,164 134,344 34,511 12,618 3,382
Cash flows
Cash flows from operating activities 26,071 476,936 22,494 5,176 (2,705)
Cash flows from investing activities 283,297 (349,067) (977) (280) (140)
- of this investments in intangible assets 0 0 0 0 76
- of this investments in property, plant and
equipment
257 115 60 82 62
Cash flows from financing activities (337,548) (28,036) 376 5,707 1,794
Change in cash and cash equivalents
for the year (28,180) 99,833 21,893 10,603 (1,051)
GROUP
EUR ‘000 *
Key ratios
Scalability 70.7% 89.8% 78.1% 58.3% 57.3%
Equity ratio 52.8% 53.1% 12.8% 23.0% 35.5%
Return on equity 15.1% 164.1% 140.6% 81.8% 48.7%
GROUP
*
Environmental, social and governance data
Employees (FTE) - average for the year 136 94 70 34 22
Employees (headcount) - end of year 155 130 87 55 28
Employee turnover, % 14.8% 9.8% 3.8% 3.6% 0.0%
Gender diversity, female leaders at other
management level, %** 7% 8% - - -
Total CO
2
e emissions (tonnes) ** 6,201 5,511 - - -
Average CO
2
e emissions (tonnes) per FTE** 46 59 - - -
For definitions of financial ratios, please refer to note 30.
*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 2019 have not been restated and are in accordance with Danish GAAP.
**MFT Energy started measuring the parameters in 2022.
7
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
BO PALMGREN
Group CEO
In 2023, we continued our strategic growth journey,
further solidifying our position as a leading global
energy trader. As expected, energy prices and trad-
ing volumes normalized, however, with a nervous
undertone due to the geopolitical situation. We
are satisfied with the achieved operating results
(EBIT) of EUR 72m compared to EUR 576m in 2022
and EUR 65m in 2021. 2023 was a testament to our
ability to navigate shifting market conditions with
determination and expertise.
EIVIND KOLDING
Chair of the Board of Directors
Navigating
shifting markets
LETTER FROM THE CEO AND CHAIR
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MFT Energy A/S - Annual report 2023
Looking back at 2023, it was an intense year for
MFT Energy. Our adaptability was tested, and we
passed!
In the second half of 2023, the global power and
gas markets shifted to a calmer but still nervous
supply and demand situation because of the
geopolitical situation in several places around the
world. MFT Energy is built for all kinds of market
sentiments – our trading engine is well prepared
on a daily level for handling all market situations
- but what we experienced in 2022 was extraor-
dinary and, therefore, we have continuously in-
vested in our risk management setup.
We have recruited a new CRO, Per Hjorth
Poulsen, to handle all risks, including liquidity and
financial risks, and we have upgraded our surveil-
lance systems with state-of-the-art technology.
At the same time, we can proudly say we have
reached important landmarks such as expand-
ing our business outside Europe, establishing a
new business line, environmentals, implementing
further automation of our trading activities and
finalizing our sustainability strategy.
As of June 1, 2023, Bo Palmgren took over the
Group CEO role at MFT Energy, and the Execu-
tive Leadership was expanded to now also repre-
sent the regional trading activities; one of many
examples of our dedication to strengthening our
global footprint.
Broadening our global footprint
In 2023, 10.5% of our trading activities originated
from outside Europe - up from 3.5% in 2022 and
in 2024, we expect to see continued growth in
volumes traded outside Europe.
The opening of our US office in Austin, Texas, was
an important milestone in 2023, not only broad-
ening our global footprint but also strengthening
our presence in one of the world's most dynamic
energy markets. We have been trading on the
North American markets for a couple of years,
but out of Denmark. Now we have established a
fully operational entity with technical and ana-
lytical skills, which will enable us to multiply our
trading activities in this market.
Additionally, we made a significant investment in
our Asia-Pacific (APAC) capabilities by relocating
to new offices in Singapore. Our team in Sin-
gapore grew from 7 to 12 in 2023, and volumes
traded in the APAC region more than doubled.
Ready to unfold growth potential in
environmentals
Environmentals was a strategic focus area in
2023. In line with our strategy, we have estab-
lished a trading entity to support our ambition
of becoming a market leader also in this line of
business. Volumes already increased significantly
in 2023, and we see great synergies with our ex-
isting trading business, which we strongly believe
will be unfolded in the years to come.
Cutting-edge technologies
Also in 2023, we were committed to further
embracing cutting-edge technologies and data
analytics to enhance our trading strategies and
optimize our operations. We have gained valuable
insights, improved decision-making processes,
and driven operational efficiency. This technolog-
ical progress will enable us to stay ahead of the
curve in the rapidly changing energy landscape
and maintain our competitive edge.
In 2023, more than 50% of our short-term trades,
combined across power and gas markets, in-
volved the use of machine learning or algorithms,
up from around 20% in 2022. Thus, we have al-
ready exceeded our 2024 goal of more than 40%.
In 2024, we expect that automation and the utili-
zation of artificial intelligence will continue.
Sustainable future for all
We have a purpose that goes beyond capitalizing
on our platform Made For Trading. We want to
trade energy to make markets efficient and to
facilitate the green transition. In line with this
business commitment, in 2023, we formulated a
sustainability strategy with specific targets sup-
porting the green transition, including initiatives
to minimize direct and indirect GHG emissions.
We have always conducted business in an ethical
and responsible manner and now, we want to
share that by publishing ESG key figures and pre-
paring for the CSRD requirements.
Our new sustainability strategy was an important
achievement in 2023.
Running an ethical and responsible business
Compliance has our highest priority, and all our
employees must be fully trained in ethical and
responsible business behavior. As a consequence,
this is essential in our onboarding process of new
employees and in the mandatory follow-up train-
ing of all employees involved in trading activities.
Our organization grew from 130 to 155 in 2023
and today, we have 11 teams of experts navigat-
ing the complex energy landscape, anticipating
We have an important role to play in
the world of energy, and this is only
possible with a continuous focus
on competence building and good
corporate governance. I am proud of
our readiness in the ever-changing
energy markets, which explains our
satisfactory results for 2023.
Bo Palmgren
Group CEO
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Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
9
MFT Energy A/S - Annual report 2023
2022
2021
2023
Volatility in gas price
Gas price (TTF front month)
Normalized market situation
Gas price and volatility in the period, 2021-2023
market trends, and leveraging trading opportuni-
ties.
Learning and development of our staff are an
ongoing process. In 2023, we launched learning
programs as part of our talent management,
and as a starting point, all leaders are attending
monthly training sessions to upgrade leadership
skills and tools.
At the end of 2023, we performed an employee
satisfaction analysis showing that we are on the
right track of becoming The Best Place for The
Best People with an eNPS of 55. The possibility
of becoming a partner is highly valued among
MFT Energy's employees, and, therefore, it was
a pleasure to announce, in early 2024, that an
additional 24 new partners would be joining the
partner group that now totals 82 partners.
A year of normalization
Looking at our financial performance, 2023 was
a year of normalization. In 2023, energy prices
dropped to the levels before the energy crisis in
2022, and volatility – the fluctuations in energy
prices – was also significantly lower.
This was reflected in our results delivering a
gross profit of EUR 102m compared to EUR 642m
in 2022 and EUR 84m in 2021. Operating results
(EBIT) in 2023 were EUR 72m compared to EUR
576m in 2022 and EUR 65m in 2021.
We are satisfied with our financial performance
taking the faster than expected normalization of
the market situation into account.
Reaching new milestones in 2024
In the past year, our teams demonstrated great
dedication and passion. Each member of the MFT
family has played a crucial role, embodying our
values of grit, hunger and unity.
Together, we have achieved significant mile-
stones, and fuelled our positive outlook for 2024.
We are confident that MFT Energy will reach new
heights of success in the years ahead.
Despite significant changes in the
global energy markets, MFT Energy
delivered in all strategic focus areas
from further internationalization out-
side Europe, expansion of the business
base with a new business area, envi-
ronmentals, to an increased use of al-
gorithmic trading. MFT Energy stands
strong and ready for an exciting 2024.
Eivind Kolding
Chair of the Board of Directors
Eivind Kolding
Chair of the Board of Directors
Bo Palmgren
Group CEO
10
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
New trading team established
focusing on environmentals
In 2023, trading environmentals have been a
new strategic focus area for MFT Energy, hence
a new trading team and separate legal entity
have been established. The relevant licenses
have been obtained and a platform developed
to support the specific needs of this business
ensuring a smooth process. The market for en-
vironmental products is developing rapidly due
to the growing focus on the environment, and
MFT Energy is strongly positioned to participate
in building efficient markets also in this area.
Read about environmental trading on page 21.
New CEO and leadership expansion
In June 2023, Bo Palmgren took over the Group
CEO responsibility. Following the launch of our
new global business strategy early 2023, the Ex-
ecutive Leadership team was expanded. All key re-
sponsibilities are now represented in the Executive
Leadership, including the APAC management, the
US management, the European power manage-
ment and the gas management.
Strategic highlights
2023
Risk and compliance organization
strengthened
In 2023, MFT Energy reinforced its unwavering focus
on good corporate governance and compliance. By
the employment of Per Hjorth Poulsen as new CRO,
we added extensive expertise within risk management
and Treasury. In addition, two highly experienced staff
members with deep knowledge from the energy trading
were also recruited. In total, 17 FTE work solely within
risk management, treasury and compliance in MFT En-
ergy. Read more about risk management on page 41.
11
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
ESG
ESG
ESG
Strategic highlights
2023
APAC headquarters relocate
to new offices
In May 2023, MFT Energy’s APAC team
based in Singapore moved to a larger and
fully renovated office to strengthen our po-
sition in the strategically important APAC
region. In addition to being the headquar-
ters of MFT Energy’s Japan, Australian and
Singapore trading teams, the night trading
for intraday and gas is now fully operation-
al. Furthermore, risk management and soft-
ware & technology have staffed up in the
new office as part of the strategic ambition
to have a 24/7 platform on all relevant ar-
eas. By the end of 2023, the office counts
12 employees, up from seven by the end of
2022.
New sustainability strategy
In 2023, we launched MFT Energy’s sustainability strat-
egy supporting sustainable operations and the creation
of long-term value. We have always had a strong focus
on our employees, surrounding and governance, and
now it is thoroughly described with several ambitious
targets. In parallel, the double materiality assessment
from 2022 was revised to ensure full compliance to the
ESRS standards and requirements to be implemented
as from 2025.
Read more about ESG and sustainability on page 23.
US office fully operational
A strong position in the North American markets is key
to becoming a global leader within energy trading. In
October 2023, we opened our new office in Austin,
Texas with two employees and, during the year, MFT
Energy also achieved license to operate in all major
US areas (ISOs). Our fully operational office in the US
has allowed us to utilize MFT Energy’s platform, tools,
and data setup to the fullest extent possible, and the
North American trading volume, including the Canadi-
an market, has grown by more than 150% in 2023.
12
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
14 Global energy trading
15 Platform excellence
16 Cutting-edge technology
19 MFT Energy power
20 MFT Energy gas
21 MFT Energy environmentals
BUSINESS AND STRATEGY
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MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
BUSINESS AND STRATEGY
Global energy trading
MFT Energy is a global energy trader with a strategic focus on sustainable growth.
Our 2023-2024 growth strategy aims at capturing opportunities in existing markets,
expanding into new geographies, and entering a new and related trading segment,
environmentals.
MFT Energy has built a highly scalable platform,
Made For Trading, tailored for energy profes-
sionals, offering intuitive tools, real-time data
analytics and risk management making it possible
to trade energy in a responsible manner. Our pur-
pose is to trade energy to make markets efficient
and thereby facilitate the green transition.
Becoming a global energy house
MFT Energy’s business model is based on gener-
ating income from buying and selling power, gas
and environmentals utilizing the volatility as best
as possible.
Our 2023-2024 growth strategy aims at captur-
ing opportunities in existing markets, expanding
into new geographies, and entering a new and
related trading segment, environmentals.
Our strategic aspirations to become a
global energy house are:
• Strengthening our global trading hub in new
and existing markets by improving our posi-
tion in North America and APAC to our level
in Europe
• Expanding the platform by adding environ-
mentals to the portfolio
• Increasing algorithmic trading by investing
in skilled people and technology
• Best-in-class workplace by ensuring the best
place for the best people
In 2023, we increased market presence, teams,
number of employees, and partners, and our vision
of building the most scalable global trading hub is
supported by our robust financial performance.
MFT vision
Together we build
the most scalable global
trading hub
MFT mission
To empower
entrepreneurs to become
the best
155 employees
(130 in 2022)
11 teams
(10 in 2022)
58 partners
(46 in 2022)
38 markets
(36 in 2022)
14
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
Intraday trading
CWE trading
UK trading
Nordic trading
East Europe trading
US financial trading
US physical trading
Japan and Singapore trading
Australia trading
Environmentals trading
Gas trading
Risk management
Compliance
Software & technology
Treasury
Market access
Legal
People operations
Finance
Despite the shifting market situation, our stra-
tegic focus remained on the expansion of our
business by adding a new trading team – envi-
ronmentals – and by increasing the overall power
volumes originating mainly from markets outside
Europe.
At MFT Energy, we have built a successful
business platform based on a highly scalable,
tech-driven, and asset-light business model, and
we consider ourselves experts in the trading of
power and gas. Environmentals was added as a
trading area from 2023 and, also in this area, we
aim for a market-leading position.
We have continuously invested in platform ex-
cellence – the core of our business – and we will
continue to optimize the platform and our pro-
cesses. The platform includes risk management,
compliance, software & technology, treasury,
market access, legal, people operation, and fi-
nance – in other words: all the support our trad-
ing teams need.
By using in-depth market knowledge, comprehen-
sive data sets, automation, analytical capabilities,
and capital, MFT Energy’s trading teams turn
knowledge and data into trading strategies and
business opportunities.
We know that our systematic approach and con-
stant focus on documentation and compliance
have ensured a high level of governance. Our
overall expertise in managing the implicit risk of
trading in the power and gas markets across bor-
ders has provided us with a proven track record
and a unique ability to create value.
BUSINESS AND STRATEGY
Platform excellence
MFT Energy’s 11 trading teams showed great adaptability in 2023 in connection with
the expected normalization of the energy markets in 2023.
Support and trading teams
15
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MFT Energy A/S - Annual report 2023
BUSINESS AND STRATEGY
Cutting-edge technology
In 2023, MFT Energy continued to integrate and enhance algorithmic trading, maintain-
ing a position at the forefront of technological innovation. In the short term, combined
across power and gas markets, more than 50% of our trades were executed with algo-
rithmic trading. A significant percentage that reflects our commitment to optimizing and
improving trading efficiency.
MFT Energy has a cutting-edge technology
platform and by leveraging the knowledge of
advanced automation, algorithmic trading, and
machine learning competencies, we have been
able to further increase our execution speed and
strengthen our decision-making, which is pivotal
to our performance globally.
MFT Energy executes thousands of trades every
day across markets, interacting with parties
trading on energy exchanges.
Enhanced trading strategies
Algorithmic trading has allowed more complex
trading strategies to thrive in the markets. Our
quantitative analysts have in collaboration with
software developers improved our machine learn-
ing setup, thus allowing advanced data analytics
to play a key role in refining our trade execution
process.
In MFT Energy, trades are executed either auto-
matically via algorithms or manually. The combi-
nation of core trading know-how, extensive data
and technical competencies ensures efficient and
profitable trading.
In 2023, more than 50% of our short-term trades
across power and gas markets combined were
executed using algorithmic trading.
Data-driven trading
Every day, MFT Energy handles millions of data-
points through +25 external providers related to
consumption, production, weather, and markets.
The datapoints are gathered and structured to
ensure high data quality and easy access.
Data is being analyzed by the trading teams on
which more than 40% of employees are analysts
or technology profiles, who are responsible for
the development of analytical models and tools.
Data provided by MFT Energy’s data models is
used to feed machine learning models, and algo-
rithms, and other models. In addition, our risk and
treasury teams analyze the data on a daily basis
to ensure risk and capital are within approved
mandates and policies.
The prediction models provide key signals to our
trading teams, which support the manual or auto-
mated execution of the trades.
Going forward
MFT Energy remains dedicated to developing and
integrating algorithmic trading within our mar-
kets. By more accurately predicting and respond-
ing to market changes, we continue to contribute
to balancing supply and demand, thereby aiding
the transition towards a more sustainable energy
future. We will continue to invest in attracting
and retaining top-tier talent and anticipate ongo-
ing improvements in our strategies.
In 2023, more than 50%
of our short-term trades
were executed with
algorithmic trading.
16
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
Strategic aspirations
MFT Energy values
Strategic enablers
Grit - Hunger - Unity
Grit is about strength of character, spirit,
perseverance, and unyielding courage.
Hunger, and staying hungry, is a critical
component of our ability to build and im-
prove MFT Energy.
Unity ensures that MFT Energy operates
with unbroken integrity in a condition of
harmony and accord.
Talent - Attracting and developing talent
Platform excellence - Scalability through partnership model
Technology - Advanced automation and algorithmic trading
Global Energy House
2024
Strengthening our global trading
hub in new and existing mar-
kets - by improving our position in
North America and Asia-Pacific to
our level in Europe
Expanding the platform - by add-
ing enviromentals to the portfolio
Increasing algorithmic trading -
by investing in skilled people and
technology
Best-in-class workplace - by en-
suring the best place for the best
people
17
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
Trading
power
38
trading markets
(+2 in 2023)
22 exchanges
(+1 in 2023)
Trading
gas
Trading both
power and gas
Istanbul
Aarhus
Noosa
Singapore
Austin
With workstations and offices worldwide,
including Europe, Türkiye, the US, Singa-
pore, and Australia, MFT Energy is poised
to solidify its position as a leading global
energy trading hub.
GLOBAL PRESENCE
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MFT Energy A/S - Annual report 2023
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MFT Energy A/S - Annual report 2023
POWER
MFT Energy power
Global power markets followed the gas
markets and returned to the dynamics we
have seen historically. MFT Energy power
increased traded volumes by 41% to 54
TWh, mainly due to significant growth in
APAC and US confirming our non-European
market focus.
The development in the gas markets was decisive
for the European power markets in 2023, and,
hence, for the normalization of the European
power markets after a volatile 2022. Additionally,
the mild winter at the beginning of 2023 and
very windy end of the year have contributed to
well-supplied power and gas markets.
Mature European trading activities
The power market development led to less trad-
ing opportunities in Europe. MFT Energy’s power
trading teams have been focused on improving
our models and moving towards a higher degree
of algorithmic trading. However, traded volumes
in Europe remained on the same level as in 2022,
and we consider our power trading activities in
Europe mature, stable, and highly profitable even
in markets with low volatility as in 2023.
Growing volumes outside Europe
On non-European markets, we gained more
knowledge and experience, and we expanded
trading into new regions and products. Our vol-
umes more than doubled outside Europe with
strong growth both in the US and the APAC
region. We are satisfied with the development,
which is in line with our strategic focus of be-
coming a global leader in power trading.
Ready for 2024
Our strategic objective for 2024 is to continue
our growth outside Europe, while at the same
time utilizing our strong market position in Eu-
rope. We expect to realize this by continuing to
make technical improvements and implement
automation, but also by applying additional focus
on learning and development to ensure that we
get the most out of our talented staff on the
power trading teams.
54 TWh traded in 2023
up 41% compared to 2022
and up 115% compared to 2021
59 employees in 2023
+4 compared to 2022
37 active power trading markets in 2023
+2 compared to 2022
22 exchanges in 2023
+1 compared to 2022
Power trading established in 2017
Facts about MFT Energy power
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MFT Energy A/S - Annual report 2023
GAS
MFT Energy gas
Gas markets normalized in 2023 after the
exceptional volatility in 2022. MFT Energy
gas managed to keep trading volumes
as high as 240 TWh, which is a decrease
of only 22% compared to 2022 and an
increase of 33% compared to the trading
volumes in 2021.
During 2023, the European gas market adapted
to the new market situation with an increasing
need of global gas supply, primarily due to Rus-
sian pipeline gas being excluded from the Euro-
pean supply. LNG (liquefied natural gas) became
an important asset in terms of securing the Euro-
pean supply, and, as a consequence, the EU ex-
panded its LNG terminals to meet future needs.
European gas storage full
Unlike in 2022, the European market in 2023 was
well supplied, and as the EU storage levels were
well above the average of recent years, the need
for moving gas was limited compared to 2022
resulting in a decrease of our traded volumes in
2023. The European gas storages were 86% full
by the end of 2023, also supported by weather
conditions, which did not require a high demand
for gas.
Adapting to new situation in gas markets
TTF (European reference price on gas) decreased
throughout 2023. The market showed some
fluctuations during the year, but overall, the TTF
curve became flatter than in previous years. The
less volatile markets in 2023 compared to 2022
made MFT Energy’s gas trading team change fo-
cus to automation of procedures and algorithmic
trading, and they adapted trading strategies to
the new normalized market conditions. Further-
more, with the EU’s new supply situation being
more reliant on LNG, we identified new opportu-
nities, and we made efforts to capture these.
Ready for 2024
We expect the overall market trend from 2023 to
continue in 2024, hence, our focus will remain on
optimizing our analytical tools, sophisticating our
strategies, and providing additional training for
our skilled staff. All of these initiatives will ensure
readiness for all possible future market scenarios.
240 TWh traded in 2023
down 22% compared to 2022
and up 33% compared to 2021
27 employees in 2023
+6 compared to 2022
14 active gas trading markets in 2023
14 in 2022
6 exchanges in 2023
6 in 2022
Gas trading established in 2019
Facts about MFT Energy gas
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MFT Energy A/S - Annual report 2023
ENVIROMENTALS
MFT Energy environmentals
In 2023, MFT Energy environmentals was established with a dedicated trading team and
a formal structure to support our strategic growth ambitions in this trading area. The
required licenses to trade green gas certificates were obtained and specialists within en-
vironmental trading were employed.
Building a platform for environmental trading
Throughout 2023, we have built a solid platform
to support compliant and efficient environmen-
tal trading. We now have the expertise to trade
environmental certificates in both power and
gas, and a specialized trading team focusing on
trading renewable energy certificates (RECs) has
been established.
It has been a high priority to obtain the neces-
sary licenses, and we have secured access to all
relevant biomethane certificate registries and
exchanges.
Our aim is to optimize the value of the certifi-
cates to ensure a fair pricing for producers and
consumers alike. We believe that the focus on
green energy and related certificates will con-
tinue to increase, but also that the markets will
become more complex due to regulatory require-
ments in the future. Through our trading activi-
ties, we facilitate the green transition by creating
liquidity and transparency in a new and growing
market.
Fast growing markets
Environmental trading is designed to help meet
environmental objectives, such as reducing
greenhouse gas emissions to combat climate
change or reducing air and water pollution. In
recent years, the demand for environmentals has
increased sharply in line with the increasing rec-
ognition of the climate crisis and profound wish
for conducting a sustainable business.
Today, gas from the biogas plants is mixed with
conventional gas in the grid, and green certif-
icates are issued to the producers of biogas.
These certificates are traded as environmentals,
to proof the green origin of the gas, and the buy-
ers of these certificates can claim to have used
the green gas and thereby meet their sustainabil-
ity targets.
Biomethane production in the EU grew by al-
most 19% in the period from 2017 to 2022*, and
the International Energy Agency anticipates a
growth rate of 32% in the period from 2023 to
2028. Moreover the largest biomethane trading
platform (the ERGaR CoO scheme) has seen
a tenfold increase in the biomethane volumes
transferred in just over a year**.
The International
Energy Agency (IEA)
anticipates the growth
rate for biomethane to
accelerate from
19% in 2017-2022
to
32% in 2023-2028
*World Biogas Association (WBA) | IEA Forecasts 32% growth in Coming Years for Biogas Sector
**EBA Statistical Report 2023, Tracking biogas and biomethane deployment across Europe
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MFT Energy A/S - Annual report 2023
Markets for
gas trading
Markets for
certificate trading
Gas
Utilities
Major consumers
Biogas production
Certificates
Biogas is produced at
specific biogas plants.
Biogas is mixed with
conventional gas in the grid.
Consumers requesting green gas need
certificates to proof green origin.
Green certificates are issued to the producers of biogas, and
named biomethane certificates. One certificate is issued for
every 1 MWh biogas produced. These certificates can then
be sold, to proof the green origin of the gas.
Anchored in MFT Energy’s purpose – energy
trading ensuring efficient and well-supplied
markets – we facilitate the green transition by
also trading green gas certificates.
Biogas and biomethane certificates
*Press release Dansk Biogas, January 3, 2024
Denmark is among the leading countries within
biogas production with a production of approx.
45%* of the Danish gas consumption, whereas
other countries are in the very early stages of es-
tablishing biogas production facilities.
Ready for 2024
MFT Energy aims to take a leading position with-
in environmental trading, and the strong Danish
position within biogas enables MFT Energy to
attract experienced talents to support this am-
bition.
We focus on onboarding the right skills and
ensuring full support across the other teams at
MFT Energy. Our environmental trading has led
to higher credit risk than MFT Energy has histori-
cally accepted. Therefore, a know-your-customer
(KYC) procedure has been implemented to miti-
gate the risk and ensure a smooth process.
In the coming years, we expect significant growth
in MFT Energy’s environmental trading activities,
both in terms of trade volumes and number of
dedicated employees. Additionally, we will have
continued focus on improvements of our environ-
mental trading platform and structure.
22
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
E
Environmental: Climate
Facilitating the green transition
S
Social: People and culture
Creating an inclusive workspace and being
the employer of choice
G
Governance: Business conduct
Ensuring the utmost ethical and responsible business practices
New
sustainability
strategy
ESG
Our focus on sustainability and ESG con-
tinued in 2023 by the formulation of our
sustainability ambitions with defined tar-
gets and commitments. We have a purpose
of supporting the green transition through
efficient energy markets, and rooted in this
purpose, we are committed to upholding
the highest standards of ethical and re-
sponsible business practices. Our talented
workforce is MFT Energy’s most important
asset, and their well-being, commitment
and development are a major priority in our
new sustainability strategy.
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MFT Energy A/S - Annual report 2023
Overall responsible for
sustainability, including sustain-
ability strategy and setting targets
Managing the day-to-day sustainability
topics, including performance and reporting
Approves
sustainability
policies and reports
Governance structure
Trading and support teams
Executive Leadership
Board of Directors
At MFT Energy, we are continuously improving
our sustainability focus. Employing a risk-based
approach, we actively strive to mitigate actual
and potential negative impacts on our business
and surroundings, while concurrently transform-
ing sustainable development challenges into
business opportunities.
Our sustainability priorities consist of three ambi-
tions and are based on a materiality assessment
of important topics for our stakeholders.
Our commitment to sustainability practices goes
beyond compliance; it is a dynamic pledge to
continuous improvement. As we navigate the
complexities of the energy markets, we recog-
nize our role in facilitating the green transition
towards renewable energy sources through
efficient energy trading. By participating in the
energy markets, we support effective pricing for
the benefit of both producers and consumers
and, in this way, we contribute to energy security,
affordability, and adaptability in the face of in-
creased volatility driven by climate change.
To uphold these commitments, we have estab-
lished measurable sustainability targets and
enhanced disclosures, thereby providing a robust
framework for monitoring and assessing our
progress. In alignment with our dedication to
transparency and accountability, we have also
initiated our preparation for the upcoming Cor-
porate Sustainability Reporting Directive (CSRD)
reporting requirements.
The responsibility for sustainability is anchored
at MFT Energy’s Board of Directors and Executive
Leadership. The Executive Leadership is responsi-
ble for implementing relevant policies and ensur-
ing that corporate practices and ways of working
are aligned with the policies and recommenda-
tions for good corporate governance.
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MFT Energy A/S - Annual report 2023
Our progress with sustainability
In 2023, our commitment to sustainability deep-
ened as we further integrated principles across
our business, from strategic initiatives to gover-
nance structures and product development. We
defined our sustainability strategy and targets,
outlining our commitments to responsible busi-
ness conduct and demonstrating an understand-
ing of key ESG risks.
In 2022, we initiated the preparation for CSRD
by performing a double materiality assessment.
In 2023, we increased our focus by conducting
a thorough gap assessment related to the Euro-
pean Sustainability Reporting Standards (ESRS).
These initiatives are part of the ongoing prepa-
ration to adhere to the new reporting standards,
effective from the financial year 2025 for MFT
Energy.
EU Taxonomy
Again in 2023, MFT Energy assessed the EU Tax-
onomy. While power and gas trading activities
have not been explicitly included as separate
economic activities in the EU Taxonomy, MFT En-
ergy acknowledges and supports the objectives
laid out by this regulatory framework. We will
continue to monitor the development and assess
whether our activities will be in scope going for-
ward.
2022
2024
2025
2023
• Double materiality assessment
• Mapping and commitment to the UN
Sustainable Goals
• Initial EU Taxonomy assessment
• Scopes 1, 2 and 3 emission accounting in
line with the Greenhouse Gas Protocol
• Formulating sustainability strategy with
measurable targets and commitments
• CSRD readiness and gap analysis
• EU Taxonomy assessment
• CSRD implementation
• Decarbonization strategy
• Reporting according to the European
Sustainability Reporting Standards
(ESRS)
MFT Energy’s sustainability timeline and progress
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MFT Energy A/S - Annual report 2023
Planet &
Society
Climate change
adaptation
Business conduct
Responsible tax
Cybersecurity
Climate change
mitigation
Working
conditions
Talent
development
Equal treatment
for all
Secure and affordable
energy supply for
customer and
end user
E
n
v
i
r
o
n
m
e
n
t
a
l
S
o
c
i
a
l
G
o
v
e
r
n
a
n
c
e
Impact
Financial
Material sustainability topics
Double materiality assessment
To identify the elements of sustainability that are
most relevant to our business and stakeholders
and to identify MFT Energy’s impact on its sur-
roundings, we conducted a double materiality as-
sessment in 2022 that was updated in 2023. The
double materiality assessment comprises:
Impact materiality – MFT Energy’s impact on
people or the environment.
Financial materiality – sustainability matters
that trigger effects on MFT Energy’s cash flows,
performance, cost of capital or access to finance.
Through this process, we enhance our ability to
prioritize sustainability issues, strategically di-
recting our focus to areas where we can make a
positive change and effectively mitigate the most
pertinent ESG risks.
The double materiality assessment has been val-
idated by the Executive Leadership, the Board of
Directors, and third-party advisors.
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MFT Energy A/S - Annual report 2023
*As per Section 139c (1)(ii) and (iii) of the Danish Companies Act.
Our ambitions and targets
Our sustainability strategy is centered around
our ESG ambitions and the material topics pre-
sented in our double materiality assessment.
Our ESG ambitions Priorities Targets Next step UN SDG
E
S
• Remaining an inclusive
workplace and being the
employer of choice
• To create a workplace that embraces diversity
andinclusion at all levels
• Dedicated focus on attracting, developing
andretaining top talent
• eNPS > 30 every year
Gender diversity target 2027:
• Female share of other management*: 25%
(7% in 2023)
• Female share of total employees: 20%
(16% in 2023)
• Define and prioritize focus areas based on sur-
vey insights to enhance employee satisfaction,
well-being, and productivity
• Execute initiatives aimed at enhancing gender
diversity within the organization
G
• Ensuring the utmost
ethical and responsible
business practices
• Pay taxes in a transparent and ethical
manner
• Eliminate IT security breaches and their
impacts onbusiness and stakeholders
• Carry out continuous identification, assess-
ment, mitigation and reporting of current and
emerging risks
• All employees (in scope) receiving training re-
lated to anti-market abuse annually
• Annual review of tax planning ensuring align-
ment with Group tax policy
• All employees receiving cybersecurity aware-
ness training annually
• Minimum 40% female representation on the
Board of Directors by 2026 (20% in 2023)
• Prepare for the implementation of the Network
and Information Systems Directive (NIS2)
• Establish a dedicated Cybersecurity
Committee
Material topics have been identified through
analysis of risks, opportunities, and the specific
requirements or preferences of our key stake-
holders. They are all equally important and serve
as a strategic direction for MFT Energy’s overall
sustainability commitments.
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MFT Energy A/S - Annual report 2023
E
*Savings of EUR 34bn according to ACER (ACER’s Final Assessment of the EU Wholesale Electricity Market Design, April 2022) and
198m households according to Eurostat.
Scope 2
18 tonnes
of CO
2
e in 2023
(market-based)
Scope 3
6,183 tonnes
of CO
2
e in 2023
29
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MFT Energy A/S - Annual report 2023
* Accounting for MFT Energy’s emissions scope 1, 2 and 3 follows the prescriptions of the GHG Protocol, and calculations are based on data from
DEFRA and WIOD.
** No emissions associated with Scope 1 have been identified. Only areas where the company has the authority to introduce and implement operating
policies are captured under Scope 1.
*** MFT Energy reports Scope 2 emissions by using both the market-based and location-based. This entails emissions from electricity and district heating.
**** Scope 3 emissions entails from the categories business travel and purchased goods/services.
***** CO
2
e total divided by average employees (FTE) for the year.
30
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S
Social
Remaining an inclusive
workplace and being
the employer of choice
Our talented employees are MFT Energy’s
most important asset, and their knowl-
edge and insights stand out as one of our
greatest strengths. Their well-being, com-
mitment, and development are major prior-
ities and key to retaining and attracting a
talented workforce.
We are proud of having onboarded 45 new em-
ployees in 2023 as we expanded our organization
to 155 employees by the end of 2023. In the
coming years, we will have a constant focus on
developing our workplace to attract and retain
talents as we expect to grow the number of em-
ployees to more than 175 by the end of 2024.
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Harnessing the strength of diverse teams and
varied perspectives is particularly crucial in craft-
ing innovative, impactful solutions that support
the green transition.
In the energy trading industry, achieving diversity
has historically posed a challenge, given the indus-
try’s traditional male-dominated nature. Neverthe-
less, we are actively working to redress the gender
imbalance and eliminate all forms of discrimination.
The above initiatives support our focus on the
United Nations’ Sustainable Development Goal
5, gender equality and ensure commitment to
preventing all forms of gender discrimination as
well as full and effective participation and equal
opportunities at all levels.
Our understanding of diversity extends beyond
gender. We acknowledge the significance of cul-
tivating a global workforce. By the end of 2023,
our workforce comprised 155 individuals of 27 na-
tionalities, working from 12 countries. Our global
footprint not only allows us to tap into a diverse
talent pool worldwide but also facilitates flexible
working conditions and provides enhanced op-
portunities for personal development.
MFT Workspace Model
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 possibility
of working remotely and benefits that include paid
maternity/paternity leave, health insurance, and
pension schemes. The Workspace Model provides
flexibility for our employees and allows remote
working, providing us a global reach of talents.
MFT Partnership Model
MFT Energy’s 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 solid-
ly rooted in an entrepreneurial mindset backed by
a visionary idea that all employees should be able
to own a part of MFT Energy. We call this the MFT
Partnership Model. In 2023, we welcomed 18 new
partners at MFT Energy, and by the end of 2023,
our number of partners reached 58 out of 155 em-
ployees. In early 2024, an additional 24 partners
were announced.
Learning and development
MFT Energy has a dedicated focus on develop-
ing our talented people. We continuously offer
next-level training for our specialists and leaders.
MFT Energy is built by specialists; 75% of our
people have a master’s or Ph.D. degree, and it
is a strategic focal point to further develop our
specialists and leaders and actively contribute to
their learning journey.
We took additional initiatives in 2023 by in-
troducing the MFT Leaders Program and MFT
Learning Hub. Our Graduate Program, a two-year
learning journey, has been a great success in rela-
tion to visibility at important educational institu-
tions offering in-depth knowledge of the energy
markets on an international scale.
MFT Energy is an international organization,
and we see clear benefits in moving our talents
around the world. To support this, we have de-
veloped a concept called MFT Globetrotters.
This will help us acquire global understanding,
streamline operations, and attract talents with an
international mindset and ambitions.
Employee survey
In 2023, we conducted our first Employee Engage-
ment Survey. Maintaining an ongoing dialogue with
our workforce and proactively responding to their
feedback are crucial to establishing a workplace
that aligns with the evolving needs and expecta-
tions of our employees. We quantify employee sat-
isfaction using the employee Net Promotor Score
(eNPS), which is assessed on a scale from -100 to
+100. It helps us develop the commitment of our
existing colleagues and make MFT Energy more
appealing to candidates. In the 2023 survey, we
achieved a very satisfactory eNPS of 55, which is
within our target of minimum 30***. The response
rate was 65%, and we have a clear priority going
forward to ensure a higher response rate.
Our Employee Engagement Survey will be per-
formed annually and will guide our focus areas
to continue the journey towards becoming the
employer of choice.
*As per Section 139c (1)(ii) and (iii) of the Danish Companies Act.
**Details in table on page 34.
***According to www.greatplacetowork.com, a good score is anywhere between 10 and 30, and a score of 30 or greater is considered excellent.
**** Number of employees who left in % of average number of employees (FTE).
***** Detractor % in employee survey is subtracted from the promoters %.
2023 2022
Social
Employees (headcount) - end of year 155 130
Employees (FTE) - average for the
year 136 94
Employee turnover, % **** 14.8% 9.8%
Employee Net Promoter Score ***** 55 -
Female employees of total, % 16% 14%
Number of leaders at other
management level * 14 12
Gender diversity, female leaders at
other management level * 7 % 8 %
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Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
G
Governance
Ethical and responsible
business
It is essential for MFT Energy to recognize
the critical importance of maintaining the
integrity and transparency of the energy
trading markets. Committing to the regu-
latory requirements of the energy trading
sector is not just a legal obligation to MFT
Energy; it is also an integral part of our
core values and business philosophy.
Establishing a strong compliance culture is an
ongoing journey for MFT Energy where we con-
stantly focus on strengthening our policies, pro-
cesses, training, and communication in relation to
business ethics. Non-compliance with the market
regulation undermines the economic develop-
ment of the energy market and has an adverse
impact on the green transition.
MFT Energy is committed to conducting all busi-
ness in an honest and ethical manner, wherever
we operate. We are also heavily focused on
mitigating potential governance risks that could
impact MFT Energy’s long-term sustainability and
success.
100%
employees trained in
cybersecurity awareness
in 2023
20%
gender diversity, Board of
Directors (female)
in 2023
16.5mEUR
total tax contribution in 2023
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MFT Energy A/S - Annual report 2023
Responsible tax
MFT Energy and its subsidiaries are committed
to upholding the highest standards of integrity,
transparency, and compliance with tax laws and
regulations.
Our tax policy outlines and describes the govern-
ing principles for tax management at MFT Energy
and includes
• An overall commitment and approach to re-
sponsible tax practices
• A governance structure where our tax policy
is subject to annual review and approval by
the Board of Directors
• An explicit policy on tax planning, transparen-
cy, and risk management
• For 2023, MFT Energy Group will pay EUR
16.5m in tax on profit for the year, corre-
sponding to an effective tax rate of 24%.
Cybersecurity
IT security is a top priority for MFT Energy, and
we have taken extensive measures to safeguard
data and our critical infrastructure. Reactive 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 road map.
In addition, we mitigate cybersecurity risks and
enhance the awareness of the organization by:
• Conducting mandatory security awareness
training for all employees annually.
• Conducting regular risk assessments to iden-
tify, evaluate, and mitigate potential cyberse-
curity threats.
• Addressing cybersecurity and cyber threats,
including in our IT and security policy.
Additional initiatives are planned for 2024:
• Creation of a specialized cybersecurity com-
mittee consisting of individuals with varied
expertise and responsibilities, providing reg-
ular updates on MFT Energy’s cybersecurity
status.
• MFT Energy is in scope of and planning for
the new version of EU’s Network and Infor-
mation Systems Directive (NIS2) aimed at es-
tablishing a higher level of cybersecurity and
resilience within organizations.
Anti-bribery and corruption
The Anti-Bribery and Corruption Policy of MFT
Energy adopts a zero-tolerance approach to
breaches in any form. Given the nature of our
business in terms of energy trading on exchang-
es, we assess the risk of bribery and corruption
to be very limited, but we are monitoring compli-
ance with our policies and legislation closely.
We will continue to monitor this area and consid-
er the necessity of an explicit policy.
Regulatory frameworks
The Market Abuse Policy regulates MFT Energy’s
compliance with the ban on market manipulation
and insider dealing in accordance with the Regu-
lation on Wholesale Energy Market Integrity and
Transparency (REMIT) and the Market Abuse Reg-
ulation (MAR). All employees who have a direct or
indirect impact on our primary business activities
are obliged to attend annual compliance courses.
Whistleblower system
A whistleblower system has been in place at
MFT Energy since 2021. It is open to anonymous
reporting of misconduct in all areas, including
human rights, corruption, and market abuse. No
reports were submitted through MFT Energy’s
whistleblower system in 2023.
Human rights
The risk of MFT Energy violating human rights is
considered minimal, hence we have no explicit
policy for this area. Additionally, we believe hu-
man rights are covered by the regulators of our
industry and local legislation.
We will keep monitoring this area and consider
the necessity of an explicit policy.
2023 2022
Governance
Total tax contribution in EUR ‘000 16,495 126,392
Relevant employees trained in anti-
market abuse, % 100% 98%
Employees trained in cybersecurity
awareness, % 100% 100%
Number of member on the Board of
Directors 5 5
Gender diversity, Board of Directors
(female), % 20 % 20 %
Attendance at BoD meetings, % 100% 100%
Data security breaches 0 0
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MFT Energy A/S - Annual report 2023
UN target
5.1 End all forms of discrimination against all women and
girls everywhere.
5.5 Ensure women’s full and effective participation and equal oppor-
tunities for leadership at all levels of decision-making in political, eco-
nomic and public life.
UN target
7.1 By 2030, ensure universal access to affordable, reliable and
modern energy services.
7.2 By 2030, increase substantially the share of renewable energy in
the global energy mix.
7.2.1 Renewable energy share in the total final energy consumption.
UN target
13.2 Integrate climate change measures into national policies,
strategies, and planning.
Our commitment
We are committed to advancing inclusion and diversity through our
efforts to fulfill the targets and initiatives in our policy for equal gen-
der composition.
Our commitment
As an energy trader participating in global energy markets,
MFT Energy is committed to supporting the growth of renewable
energy and to ensuring access to affordable energy.
Trading energy across borders facilitates the movement of power
from regions with low demand to those with high demand, thereby
lowering prices for consumers.
By making markets more efficient, we help to promote the cheapest
energy sources, such as wind and solar. The prioritization of wind and
solar in turn leads to increased investment in renewable energy.
Our commitment
We disclose our carbon footprint and are committed to continuing
the reduction of our total emissions per FTE.
We will explore initiatives to reduce our
CO
2
e footprint, which will
include a supplier assessment framework to reduce emissions from
purchased goods and services.
Commitment to UN Sustainable Development Goals
Gender equality Affordable and clean energy Climate action
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MFT Energy A/S - Annual report 2023
Financial review 2023
PERFORMANCE
3%
11%
97%
89%
2022
2023
Europe
Non-Europe
The 2023 results reflect the normalization of the energy markets. The transition to lower
volatility happened faster than expected and required adaptation and, as always, close
monitoring of risk. Throughout the year, we successfully invested in our trading activities
outside Europe opening new offices in the US and Singapore and also in our new busi-
ness area, environmentals.
Volumes traded per area, 2022-2023
In 2022, the energy sector was deeply affected
by the geopolitical tension spawned from the
war in Ukraine. Supply chains were disrupted, and
we saw severe changes in the demand patterns
due to global events. However, in 2023, the mar-
kets normalized with reduced volatility providing
a more normalized but, at the same time, less
profitable trading environment to execute trading
strategies and manage risks effectively.
Considering the lower volatility than expected in
2023, we are satisfied with the operating profit
(EBIT) of EUR 71.7m achieved in 2023, despite ex-
pectations of EUR 150m to EUR 300m.
The outlook was prepared based on assumptions
of more volatility, but the conditions in the en-
ergy markets during the year resulted in a fairly
low volatility level throughout 2023 as there was
less need for moving energy across Europe than
anticipated. This implied more limited trading op-
portunities, which were significantly fewer than in
the preceding year, 2022.
Normalized trading volumes
In 2023, we traded 293 TWh, down from 350
TWh in 2022, corresponding to a 16% volume
decrease. The volume development from 2021 to
2023 shows an increase of 52%, corresponding
to an average increase from 2021 to 2023 of 26%.
The underlying split between power and gas illus-
trates a 41% growth rate in power from 37 TWh
in 2022 to 54 TWh in 2023, whereas gas volumes
dropped 22% from 313 TWh in 2022 to 240 TWh
in 2023. The gas volume decrease reflects the
extraordinary market situation in 2022 and is also
the main reason behind the decrease in net trad-
ing income (gross profit) to EUR 101.5m compared
to EUR 641.9m in 2022.
Net trading income (gross profit)
We delivered a net trading income of EUR 101.5m
in 2023 down from EUR 641.9m in 2022 – an ex-
traordinary year in the European gas markets.
Due to the extraordinary performance in 2022, a
comparison with 2021 is more illustrative of the
underlying growth. Net trading income in 2021
was EUR 83.7m, which leads to an average annu-
al increase of 10.6% from 2021 to 2023.
In 2023, 11% of our volumes were traded outside
Europe compared to 3% in 2022. The increase
is anchored in our strategic focus on increas-
ing volumes outside Europe, and especially our
power trading volumes in APAC have increased
significantly. We will continue our strategic fo-
cus on markets outside Europe and expect the
non-European trading percentage to increase in
the years to come.
INCOME STATEMENT (EUR ‘000)
Net trading income (gross profit) 101,525 641,864 83,702
Operating profit before financial income and expenses and tax (EBIT) 71,742 576,194 65,390
Scalability (EBIT as a percentage of net trading income/gross profit) 70.7% 89.8% 78.1%
Profit before tax (EBT) 68,447 573,129 63,817
Profit for the year 51,952 446,737 49,907
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MFT Energy A/S - Annual report 2023
Operating profit
In 2023, we delivered an operating profit (EBIT)
of EUR 71.7m down from EUR 576.2m in 2022.
Compared to 2021, the results show an underly-
ing growth rate of 10%. A scalability of 71% was
realized in 2023 (90% in 2022 and 78% in 2021).
The continued investment in technological
advancements enables enhanced operational
efficiencies and improves trading capabilities. Au-
tomation, data analytics, and artificial intelligence
played pivotal roles in optimizing trading strate-
gies, risk management, and overall performance.
Staff costs decreased significantly from EUR
58.4m in 2022 to EUR 20.2m in 2023. Compared
to 2021 and 2022, the average salary cost per
FTE is decreasing mainly due to lower bonus
payments. Conversely, the headcount increased
by 19% to 155 employees at the end of 2023. The
organization was in 2023 mainly strengthened
within the areas of trading, compliance, analytical
skills, software, and technology.
Other external expenses grew to EUR 9.1m in
2023 from EUR 7.1m in 2022. The increase is
linked to more employees, the expansion of the
trading activities in environmentals, new offices in
the US and Singapore, as well as continued focus
on automation of MFT Energy’s platform.
Net financial items constituted an expense of
EUR 3.3m in 2023 compared to a net financial
expense of EUR 3.1m in 2022. Financial income
mainly arises from investments of excess cash in
bonds, whereas financial expenses are linked to
costs of credit facilities used for trading purposes
and to the tax authorities.
Profit before tax
MFT Energy achieved pre-tax profit (EBT) of EUR
68.4m in 2023 compared to EUR 573.1m in 2022.
Tax for the year amounted to EUR 16.5m corre-
sponding to an effective tax rate of 24%. Again in
2023, more than 85% of the current income tax is
payable in Denmark as most of our trading activ-
ities currently take place at our headquarters in
Denmark. The total company tax contribution in
Denmark for 2023 amounted to EUR 14.1m (2022:
EUR 124.5m).
Profit for the year
Net profit for the year totaled EUR 52.0m com-
pared to EUR 446.7m in 2022 and EUR 49.9m in
2021. This year’s profit proves that our sustain-
able and scalable business model is still very
attractive, also in less volatile years with invest-
ments in the platform.
Cash flow
Cash flow from operating activities was positive
by EUR 26.1m in 2023 compared to EUR 476.9m
in 2022. Operating profit was converted into
cash and, additionally, the development in new
working capital contributed positively to the cash
flow in 2023. Net working capital decreased due
to lower collateral requirements for our trad-
ing activities as a direct consequence of lower
volatility and price levels at most of our trading
venues. Tax payment for 2022 totals EUR 130.4m
and this negatively impacts the cash flow from
operating activities.
Cash flow from investing activities was an inflow
of EUR 283.3m in 2023 compared to an outflow
of EUR 349.1m in 2022. The investing activities
are mainly linked to investments in German gov-
ernment bonds made to mitigate the risk related
to the cash placed in banks.
Cash flow from financing activities was an out-
flow of EUR 337.5m in 2023 compared to an
outflow of EUR 28.0m in 2022. In 2023, dividend
payments of EUR 327.5m were the main reasons
for the outflow of cash.
The total change in cash equivalents was an out-
flow of EUR 28.2m in 2023, compared with a cash
inflow of EUR 99.8m in 2022.
Capital structure
At the end of 2023, total assets amounted to
EUR 391.7m compared to EUR 910.3m in 2022.
The EUR 518.6m decrease in total assets was
20202019 2021 2022 2023 Outlook 2024
(mid range)
0%
20%
40%
60%
90%
0
150
300
450
600
EURm
Scalability (%)Trendline EBITEBIT
EBIT and scalability, 2019-2024
38
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MFT Energy A/S - Annual report 2023
activities. In 2022, higher price levels and uncer-
tainty in the energy markets led to significantly
increased collateral requirements. The levels
normalized towards the end of 2023, resulting
in lower capital requirements for market partici-
pants such as MFT Energy.
As per December 31, 2023, MFT Energy had eq-
uity of EUR 206.7m, down from EUR 483.1m on
December 31, 2022. The decrease in equity is
linked to payment of dividend in 2023. Return on
equity decreased to 15% in 2023 compared to
164% in 2022 primarily explained by a high equity
level throughout 2023 to ensure a strong liquidity
and capital position in case volatility would spike
again in 2023.
The equity ratio was 53% by the end of 2023,
equal to the level by the end of 2022. The eq-
uity ratio excluding non-controlling interests in-
creased from 32% by the end of 2022 to 34% as
per December 31, 2023.
The Board of Directors continuously assess the
capital structure to secure adequate funding for
MFT Energy to meet the strategic growth ambi-
tions. This particularly applies in connection with
the recommendation of dividends.
Outlook for 2024
Looking ahead, uncertainties will persist in 2024.
Geopolitical tension, evolving regulatory land-
scapes, and the ongoing transition towards sus-
tainable energy sources continue to pose both
challenges and opportunities for MFT Energy.
However, we remain committed to leveraging
our strengths, adapting swiftly to changing dy-
namics, and capitalizing on emerging trends to
drive sustainable growth and deliver value to our
stakeholders.
MFT Energy’s strategic priority remains to im-
prove our market position especially outside Eu-
rope, and focus is on growing our traded volumes
in all markets and products.
Finance team mission
Optimize financial performance through
strategic financial management. Utilizing
cutting-edge technology, streamlined
processes, and proactive financial plan
-
ning, we ensure fiscal responsibility, and
support informed decision-making.
We safeguard assets, maximize returns,
and empower stakeholders to achieve their
financial objectives, thereby contributing
to the overall success of the organization.
mainly linked to dividend payment, tax payment
linked to 2022 and optimization of collateral for
trading activities.
Cash and cash equivalents, including current as-
set investments (bonds), totaled EUR 170.6m at
the end of 2023, down from EUR 483.2m in 2022.
The decrease is primarily a result of dividend pay-
ment, tax payment, and change in working capital.
Other receivables decreased to EUR 19.6m in
2023 from EUR 198.8m in 2022 mainly due to
a decrease in collateral required for trading
20202019 2021 2022 2023
0%
20%
40%
60%
80%
100%
120%
140%
0
100
200
300
400
500
600
EURm
160%
180%
Return on equity (%)Equity ratio (%)Equity
The general market conditions and volatility in
2024 are expected to remain on par with 2023,
and we expect an EBIT level between EUR 50m
and EUR 100m for 2024.
Our expectations for 2024 may be affected by
changes in volatility, the general situation in the
energy markets and inherent risks and uncertain-
ties 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.
Equity, return on equity and equity ratio, 2019-2023
39
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MFT Energy A/S - Annual report 2023
Risk management in
ever-changing markets
Risk management is essential to our success
of delivering profitable growth year after year.
When energy markets normalized in 2023, trad-
ing strategies and mandates were carefully mon-
itored to ensure alignment with defined lines and
risk appetite. The risk team proactively optimized
all open positions, mandates, and liquidity to
the current market situation, keeping return on
invested capital in the trading teams as high as
possible.
Risk team mission
Safeguard MFT Energy through advanced
risk management. By employing real-time
monitoring, scalable automation, and pro
-
active measures, we identify, assess, and
mitigate risks. We protect stakeholders
interests, seize opportunities, and contrib
-
ute to executing
the strategy.
Decisions to approve or change trading mandates
are always supported by extensive analyses,
including stress tests and scenario analysis, to
ensure the risks are fully understood by the Risk
Committee approving all trading mandates.
Under the umbrella of the approved policies,
the risk team continuously supports the trading
teams through adjustment of trading mandates,
something which, during the normalization of the
markets, has been supportive in achieving the
results for 2023.
The risk team closely monitors trading mandates
and positions to ensure that all risks remain
within the risk appetite level, as defined and ap-
proved by both the Board of Directors and Exec-
utive Leadership.
Risk organization strengthened
To support our strategic growth plans and to al-
ways ensure the strongest possible risk manage-
ment, Per H. Poulsen was recruited and started
as new Chief Risk Officer (CRO) in February 2023
with the overall responsibility of the Risk and
Treasury department. Primary focus has been on
accelerating the embedment of the risk policies
and risk governance framework throughout the
organization concentrating on all risk categories.
All risk policies have been reviewed and approved
and, in combination, our credit risk policy, risk
governance policy, and treasury policy mark a
significant milestone in establishing a compre-
hensive framework for governing all risk – includ-
ing financial risks. These policies provide a solid
foundation for our risk management strategy,
ensuring stability and integrity of our financial
operations.
Our risk management approach is further en-
hanced by the global expansion of our risk team,
with a strategic physical presence now estab-
lished in Singapore. This expansion supports our
overarching strategy to expand globally.
Anticipating an expected increase in the number
of counterparties, particularly with our entry into
environmentals such as biogas and green certif-
icates, our risk management practices are also
well prepared to navigate the associated risks
in this area covering everything from regulatory
compliance to market dynamics.
RISK MANAGEMENT
In 2023, we experienced significant market changes, which required proactive risk
management at all levels. Therefore, the risk organization was further strengthened by
recruitment of a new Chief Risk Officer with the overall responsibility of the Risk and
Treasury departments. Additionally, our risk team was extended in Singapore reinforcing
proactive risk management for global expansion, and a new sustainability strategy has
been included as part of the overall risk management framework of MFT Energy. This
makes us ready to support our planned growth in markets and products and number of
counterparties in 2024.
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MFT Energy A/S - Annual report 2023
Risk governance
The overall risk governance model has not
changed in 2023, and the Board of Directors
has the overall responsibility for approving the
overall risk appetite. The Board of Directors has
appointed a Risk and Audit Committee to pro-
vide 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 communicat-
ed to the CEO.
The Risk Committee, headed by the CRO, has the
sole mandate to approve the implementation of
measures associated with increased risk and is
responsible for implementing proper risk gover-
nance 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 ensuring risk
identification, assessment, mitigation, and mon-
Mandates and governance
Reports and monitoring
Responsibility Tasks
Board of Directors
• Decides on the overall risk appetite
• Has overall responsibility for MFT Energy’s affairs
• Appoints independent Risk and Audit Committee
• The Risk and Audit Committee reviews and advises on the effectiveness of risk
management, procedures, and capital allocation
• Determines the risk capacity and allocation of risk capital to the company
• Delegates a clear risk mandate to the CEO governing all risk policies
Risk Committee
• Implements proper risk governance and fulfills the risk mandate given by the
Board of Directors
• Makes decisions based on the information provided by the risk team
• Compliant with MFT Energy’s Risk Committee mandate as given by the CEO
• Decides on mitigating actions and priorities covering all risks across MFT Energy
• Allocates capital based on expected return and risk
• Evaluates trading mandate requests
Risk team
• Ensures compliance with the mandates given by the Risk Committee by
monitoring the approved mandates and implementing mitigating actions
when necessary
• Facilitates dialogue with trading teams and Risk Committee covering trading
mandates and operational risks.
• Performs mandate surveillance
• Prepares risk reporting
• Carries out mitigation instructions according to policies and as given by the
Risk Committee
Risk governance framework
itoring. MFT Energy applies a risk management
framework consisting 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.
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MFT Energy A/S - Annual report 2023
Risk identification
Analytical tools are used
to identify risks that could
potentially prevent MFT
Energy from achieving its
strategic targets.
Risk monitoring
Monitoring of
accepted positions.
Risk assessment
Risks are assessed according
to MFT Energy’s risk
assessment guidelines.
Risk mitigation
Risks are either accepted,
avoided, or mitigated.
Risk communication
Risk reporting
Risk documentation
Risk management and compliance
HighLow
Regulatory risk
Organizational risk
Market risk
Liquidity risk
Currency risk
Credit risk
Operational and IT risk
Medium
Impact
Key risks
Financial risk Other risk
Likelihood
HighLow Medium
Continued strategic focus on risk
management in 2024
Looking ahead to 2024, we emphasize the need
to maintain a steadfast focus on continuous
improvement within our risk management frame-
work. By adhering to the fundamental principles
that have guided us thus far — identification,
assessment, mitigation, monitoring, and commu-
nication — we aim to fortify our ability to antici-
pate and respond to emerging risks.
The coming year presents new opportunities for
growth and innovation, and it is crucial that we
integrate risk considerations seamlessly into our
decision-making processes. Through a commit-
ment to ongoing refinement and alignment with
our organizational objectives, we are positioned
to not only withstand challenges but also to
thrive in an ever-evolving business landscape.
Key risk categories
MFT Energy is exposed to a range of risk factors,
which are assessed on the probability of occur-
rence and potential damage, followed by appro-
priate risk mitigation measures based on the risk
tolerance. These risks cannot be fully mitigated
but can be planned for and managed.
1. Market risk
2. Liquidity risk
3. Credit risk
4. Currency risk
5. Organizational risk
6. Operational and IT risk
7. Regulatory risk
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MFT Energy A/S - Annual report 2023
Key risk and risk level Risk Mitigation and 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 val-
ue 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 ex-
change rates and other economic or political factors.
• Holding and managing market risk are sources of competitive advantage for MFT Energy and an integral part of our business model.
• Based on the risk appetite and risk policy of the company, risk/trading limits are set to fence (risk in) each trading mandate.
• To ensure that trading mandates are kept within agreed risk limits, all positions are monitored daily as part of the second line of de-
fense, where a range of tools, risk metrics, and warning mechanisms are in place to enable swift/prompt response to any potential
excess risk (unmandated risk taking).
• Trading mandates and positions are evaluated and adjusted as part of an ongoing process to optimize the portfolio of trading man-
dates against both risk strategy and market conditions.
2. Liquidity risk
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 commit-
ments.
• MFT Energy manages its liquidity risks to maintain a solid capital structure and a strong liquidity position through the following:
• Liquidity utilization and forecasts are calculated daily for each trading mandate and for MFT Energy, ensuring liquidity is always avail-
able and within agreed 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. Credit risk
Credit risk refers to the risk that the counterparty to a trade or
contract will not fulfill its obligations. This can occur for a variety
of reasons, such as financial distress, bankruptcy, or a change in
the regulatory environment.
• The credit risk is considered to be relatively low as MFT Energy’s counterparties consist mainly of Transmission System Operators
(TSOs), exchanges and clearing banks, and large energy and utility companies.
• The credit risk policy outlines the principles, guidelines, and procedures by which credit risk is managed, including credit risk appetite,
specific credit lines, and mandatory KYC process (‘Know Your Customer’) and sanctions check.
• Credit risk is mainly mitigated by collateral agreements supported by the use of bank guarantees to reduce the exposure to counter-
parties defaulting.
• As part of the business strategy of expanding both globally and in environmental markets, MFT Energy anticipates an increase in the
number of bilateral counterparties to support this growth and hence a continued focus on the procedures related to credit risk.
4. Currency risk
Currency risk is the risk of financial loss due to fluctuations in ex-
change rates between two currencies. 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 past 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.
Key risks - financial
Impact
Likelihood
Impact
Likelihood
Impact
Likelihood
44
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MFT Energy A/S - Annual report 2023
Key risk and risk level Risk Mitigation and actions
5. Organizational risk
Organizational risk relates to the risk of losing expertise and key
employees or not being able to attract employees with the nec-
essary expertise.
• MFT Energy’s partnership model delivers significant benefits in terms of 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
Operational risk relates to the risk of financial losses because of
system or human errors, including insufficient internal procedures.
• MFT Energy continued its efforts to develop and implement internal procedures and systems to mitigate potential risk as outlined in the
operational risk policy.
• Risk assessments are conducted regularly to both create risk awareness and to help minimize the risk of human errors by implementing
automation of procedures and tasks, setup warnings and alerts.
7. Regulatory risk
Energy markets are highly regulated and subject to ongoing reg-
ulatory developments such as changes to the rules governing the
actual markets, or changes to laws and regulations that impact
the company’s ability to do business. Accordingly, regulatory 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.
• Regulatory risk is a focus area for MFT Energy, and developments in the regulatory requirements are monitored closely to ensure and
maintain compliance in all relevant markets.
• MFT Energy’s trading activities are primarily subject to European regulations such as REMIT, MAR, and EMIR and subject to certain pro-
visions 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 compli-
ance framework considers rules pertaining to economic crime, sanctions, and privacy (GDPR).
• The compliance policy holds the compliance framework covering market and trading regulations, economic crime and ethics, and IT
security and privacy. Additionally, compliance manuals are established for all trading teams and markets, and anti-market abuse training
has been executed throughout the organization.
• To ensure that our business activities are aligned with MFT Energy’s values, principles, and commitments, a Code of Conduct has been
implemented.
• Compliance reporting is presented to the Executive Leadership, risk team, and the Board of Directors on a regular basis.
Key risks - other
Impact
Likelihood
Impact
Likelihood
Impact
Likelihood
45
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Board of Directors
EIVIND KOLDING
Danish born 1959
Chair since 2022
Independent
Committee memberships
-
Competencies
• Executive management
• Strategic planning
• Mergers and acquisitions
• Change management
• Private equity
Directorship and other offices
• NTG, Chair
• NNIT, Vice Chair
• The LEO Foundation, Vice Chair
• Danish Ship Finance, Chair
• DAFA Group, Chair
• Altor Fund Manager AB, Board Member
• Axcelfuture, Advisory Board Member
SIMON RATHJEN
Danish born 1986
Deputy Chair since 2022
Not independent
Committee memberships
-
Competencies
• Innovation
• Energy trading
• Business strategy
Directorship and other offices
• MFT Energy, Founder
• MFT Energy, COO
• MFT Energy US Inc, Director
PER SCHNACK
Danish born 1961
Board Member since 2022
Independent
Committee memberships
Risk and Audit Committee
Competencies
• Capital markets
• Risk and audit management
• Legal and compliance
Directorship and other offices
• Jyske Bank, Board Member
• Jyske Bank Audit Committee, Chair
• Jyske Bank Risk Committee, Member
46
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
Board of Directors
LASSE PILGAARD
Danish born 1987
Board Member since 2022
Independent
Committee memberships
Risk and Audit Committee
Competencies
• Finance
• Transformation
• Business development
• Business strategy
Directorship and other offices
• GlobalConnect, Group CFO
• GlobalConnect, Chair
BO PALMGREN
Danish born 1982
Group CEO since 2023
Competencies
• Executive management
• Business strategy
• Energy trading
• Risk management
Executive Board
HEIDI FREDERIKKE SIGDAL
Danish born 1978
Board Member since 2022
Independent
Committee memberships
-
Competencies
• Communication and media advisor
• Positioning and branding
Directorship and other offices
• Cocuura, Board Member
• Team Rynkeby, Board Member
• GymDanmark, Board member
• FC København, Advisory Board
• By HeidiFrederikke, Founder
• Sigdal & Guldager, Co-founder
47
MFT Energy A/S - Annual report 2023
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
48
MFT Energy A/S - Annual report 2023
50 Income statement and comprehensive income
51 Balance sheet
52 Statement of cash flows
53 Statement of changes in equity
55 Notes to the financial statements
FINANCIAL STATEMENTS
Management’s review Business and strategy
ESG
Corporate mattersPerformance StatementsFinancial statements
48
MFT Energy A/S - Annual report 2023
Income statement and comprehensive income ............................................................................................................................... 50
Balance sheet ..................................................................................................................................................................................................... 51
Statement of cash flows ............................................................................................................................................................................. 52
Statement of changes in equity ..............................................................................................................................................................53
Notes to the financial statements
Note 1 Basis of preparation.................................................................................................................................................................55
Note 2 Critical accounting estimates and judgments .............................................................................................................. 57
Note 3 Impact of new accounting standards ............................................................................................................................... 58
Note 4 Net trading income ................................................................................................................................................................58
Note 5 Financial risk management ...................................................................................................................................................59
Note 6 Staff costs ................................................................................................................................................................................... 63
Note 7 Other operating expenses ....................................................................................................................................................66
Note 8 Financial income and expenses .......................................................................................................................................... 67
Note 9 Income tax expenses .............................................................................................................................................................. 68
Note 10 Intangible assets ...................................................................................................................................................................... 69
Note 11 Property, plant and equipment .............................................................................................................................................71
Note 12 Leases ........................................................................................................................................................................................... 72
Contents
Note 13 Deferred tax ............................................................................................................................................................................... 73
Note 14 Investments in subsidiaries .................................................................................................................................................. 74
Note 15 Non-controlling interests....................................................................................................................................................... 76
Note 16 Inventories .................................................................................................................................................................................. 78
Note 17 Trade receivables ...................................................................................................................................................................... 79
Note 18 Fair value measurement ......................................................................................................................................................... 80
Note 19 Financial assets and financial liabilities ........................................................................................................................... 84
Note 20 Offsetting financial assets and financial liabilities ......................................................................................................86
Note 21 Other receivables .....................................................................................................................................................................88
Note 22 Current asset investments ...................................................................................................................................................88
Note 23 Share capital ..............................................................................................................................................................................89
Note 24 Provisions .....................................................................................................................................................................................90
Note 25 Cash flow specifications ........................................................................................................................................................90
Note 26 Contingent liabilities, commitments and contingencies ...............................................................................................92
Note 27 Related party transactions ................................................................................................................................................... 93
Note 28 Fee to auditors appointed at the annual general meeting ..................................................................................................94
Note 29 Subsequent events .................................................................................................................................................................. 94
Note 30 Definitions of financial ratios ...............................................................................................................................................95
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
49
GROUP PARENT
EUR ’000 Notes 2023 2022 2023 2022
Net trading income 4 101,525 641,864 73,735 635,067
Other external expenses (9,050 ) (7,097 ) (4,957) (4,543)
Staff costs 6 (20,164 ) (58,354 ) (8,174) (8,639)
Other operating income 0 0 14,642 6,921
Other operating expenses 7 0 0 (72,483) (635,103)
Depreciation, amortization and impairment losses (569 ) (219 ) (283) (211)
Operating profit before financial income
and expenses and tax (EBIT) 71,742 576,194 2,480 (6,508)
Income from investments in subsidiaries 14 0 0 36,367 269,126
Financial income 8 9,923 1,577 9,529 1,520
Financial expenses 8 (13,218 ) (4,642 ) (12,187) (6,344)
Profit before tax (EBT) 68,447 573,129 36,189 257,794
Tax on profit for the year 9 (16,495 ) (126,392 ) (283) 2,420
Profit for the year 51,952 446,737 35,906 260,214
Profit for the period attributable to:
Shareholders of MFT Energy A/S 36,471 260,214
Non-controlling interests 15,481 186,523
GROUP PARENT
EUR ’000 Notes 2023 2022 2023 2022
Profit for the year 51,952 446,737 35,906 260,214
Other comprehensive income
Items that may be reclassified to profit
or loss
Value adjustment of cash flow hedges
for the year 0 (1,914 ) 0 (1,914)
Value adjustment of cash flow hedges
reclassified to profit or loss 0 686 0 686
Income tax relating to these items 0 270 0 270
Exchange differences on translation of
foreign operations (4 ) 11 (4) 11
Other comprehensive income for the
period, net of tax (4 ) (947 ) (4) (947)
Total comprehensive income for the period 51,948 445,790 35,902 259,267
Total comprehensive income for the period
attributable to:
Shareholders of MFT Energy A/S 36,467 259,266
Non-controlling interests 15,481 186,524
Extraordinary dividend after year end 0 142,539 0 74,000
Total extraordinary dividend after year end
per share in EUR 0 279 0 145
Income statement
for the year ended December 31, 2023
Statement of comprehensive income
for the year ended December 31, 2023
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MFT Energy A/S - Annual report 2023
50
GROUP PARENT
EUR ’000 Notes 2023 2022 2023 2022
ASSETS
Non-current assets
Intangible assets 10 36 40 0 0
Property, plant and equipment 11 285 135 116 127
Right-of-use assets 12 1,447 45 636 45
Deferred tax assets 13 1,897 4,447 1,860 4,410
Equity investments in subsidiaries 14 0 0 126,353 293,386
Deposits 422 300 277 245
Other receivables 2,056 1,439 1,650 1,390
Total non-current assets 6,143 6,406 130,892 299,603
Current assets
Inventories 16 30,942 33,020 30,942 33,020
Trade receivables 17 17,144 33,346 15,114 29,083
Receivables from group enterprises 5,286 1,254 24,809 15,062
Income tax receivables 0 0 2,276 0
Derivatives 18, 19 142,733 155,018 142,631 154,783
Prepayments 1,343 593 1,194 461
Other receivables 21 17,572 197,394 9,210 194,300
Current asset investments 22 64,416 348,888 64,416 348,888
Cash and cash equivalents 106,164 134,344 99,573 127,677
Total current assets 385,600 903,857 390,165 903,274
Total assets 391,743 910,263 521,057 1,202,877
GROUP PARENT
EUR ’000 Notes 2023 2022 2023 2022
EQUITY
Share capital 23 68 68 68 68
Reserves and retained earnings 133,556 288,710 133,556 288,710
Equity attributable to MFT Energy
A/S's shareholders 133,624 288,778 133,624 288,778
Equity attributable to non-controlling
interests 73,029 194,272 0 0
Total equity 206,653 483,050 133,624 288,778
LIABILITIES
Non-current liabilities
Borrowings 19 0 4,603 0 4,603
Lease liabilities 12 840 0 366 0
Payables to group enterprises 0 0 215,697 644,012
Provisions 24 5,725 8,405 5,725 8,405
Total non-current liabilities 6,565 13,008 221,788 657,020
Current liabilities
Borrowings 19 0 1,008 0 1,008
Lease liabilities 12 629 47 277 47
Trade payables 35,490 55,010 34,668 55,010
Payables to group enterprises 0 0 5,791 3,379
Derivatives 18, 19 120,108 179,028 119,923 179,009
Corporate tax liabilities 13,521 129,978 0 1,707
Provisions 24 2,680 11,595 2,680 11,595
Other liabilities 6,097 37,539 2,306 5,324
Total current liabilities 178,525 414,205 165,645 257,079
Total liabilities 185,090 427,213 387,433 914,099
Total liabilities and equity 391,743 910,263 521,057 1,202,877
Balance sheet
at December 31, 2023
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MFT Energy A/S - Annual report 2023
51
GROUP PARENT
EUR ’000 Notes 2023 2022 2023 2022
Cash flows from operating activities
Net profit for the year 51,952 446,737 35,906 260,214
Adjustments 25 20,273 129,805 (33,328) (267,027)
Changes in net working capital 25 87,543 (81,534 ) 118,255 (99,639)
Cash flows from operating activities
before financial income and expenses 159,768 495,008 120,833 (106,452)
Interest received 9,923 1,577 9,529 1,520
Interest paid (13,218 ) (4,642 ) (12,187) (6,344)
Income taxes paid (130,402 ) (15,007 ) (1,707) 833
Net cash flow from operating activities 26,071 476,936 116,468 (110,443)
Cash flows from investing activities
Payments for property, plant and equipment 12 (257 ) (115 ) (48) (115)
Fixed asset investments 0 0 0 155
Current asset investments, purchases (377,798 ) (348,888 ) (377,798) (348,888)
Current asset investments, sales 662,270 0 662,270 0
Payment of deposits (122 ) (64 ) (32) (37)
Purchase of shares in subsidiaries (2,289 ) 0 (2,289) 0
Sale of shares in subsidiaries 1,493 0 1,132 0
Dividend received from subsidiaries 0 0 204,675 21,499
Net cash flow from investing activities 283,297 (349,067 ) 487,910 (327,386)
GROUP PARENT
EUR ’000 Notes 2023 2022 2023 2022
Cash flows from financing activities
Proceeds from borrowings 20 (5,611 ) (1,832 ) (5,611) (1,832)
Principal elements of lease payments 13 (444 ) (67 ) (221) (54)
Change in loans with group enterprises (4,032 ) (879 ) (435,650) 551,207
Dividends paid to shareholders (191,000 ) (16,121 ) (191,000) (16,121)
Dividends paid to non-controlling interests (136,461 ) (9,137 ) 0 0
Net cash flow from financing activities (337,548 ) (28,036 ) (632,482) 533,200
Change in cash and cash equivalents (28,180 ) 99,833 (28,104) 95,371
Cash and cash equivalents at January 1 134,344 34,511 127,677 32,306
Cash and cash equivalents at December 31 106,164 134,344 99,573 127,677
Statement of cash flows
for the year ended December 31, 2023
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MFT Energy A/S - Annual report 2023
52
GROUP
EUR ’000
Share
capital
Hedging
reserve
Foreign currency
translation
differences
Retained
earnings
Equity attribut-
able to owners
of the parent
company
Non-controlling
interests
Total
equity
At January 1, 2022 68 958 0 43,974 45,000 16,409 61,409
Profit for the period 0 0 0 260,214 260,214 186,524 446,738
Other comprehensive income 0 (958 ) 11 0 (947 ) 0 (947 )
Total comprehensive income 0 (958 ) 11 260,214 259,267 186,524 445,791
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 (16,121 ) (16,121 ) (9,137 ) (25,258 )
Share-based payments 0 0 0 141 141 0 141
Other equity movements 0 0 0 490 490 477 967
At December 31, 2022 68 0 11 288,698 288,777 194,273 483,050
At January 1, 2023 68 0 11 288,698 288,777 194,273 483,050
Profit for the period 0 0 0 36,471 36,471 15,481 51,952
Other comprehensive income 0 0 (4 ) 0 (4 ) 0 (4 )
Total comprehensive income 0 0 (4 ) 36,471 36,467 15,481 51,948
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 (191,000 ) (191,000 ) (136,461 ) (327,461 )
Share-based payments 0 0 0 (92 ) (92 ) 0 (92 )
Other equity movements 0 0 0 (528 ) (528 ) (264 ) (792 )
At December 31, 2023 68 0 7 133,549 133,624 73,029 206,653
Statement of changes in equity, Group
for the year ended December 31, 2023
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MFT Energy A/S - Annual report 2023
53
PARENT
EUR ’000
Share
capital
Reserve
for loans to
shareholders
Hedging
reserve
Foreign currency
translation
differences
Reserve for net
revaluation under
the equity method
Retained
earnings
Total
equity
At January 1, 2022 68 816 958 0 44,114 (956) 45,000
Profit for the period 0 (115) 0 0 247,399 12,930 260,214
Other comprehensive income 0 0 (958) 11 0 0 (947)
Total comprehensive income 0 (115) (958) 11 247,399 12,930 259,267
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 0 0 (16,121) (16,121)
Share-based payments 0 0 0 0 0 141 141
Other equity movements 0 0 0 0 0 491 491
At December 31, 2022 68 701 0 11 291,513 (3,515) 288,778
At January 1, 2023 68 701 0 11 291,513 (3,515) 288,778
Profit for the period 0 (701) 0 0 (168,308) 204,915 35,906
Other comprehensive income 0 0 0 (4) 0 0 (4)
Total comprehensive income 0 (701) 0 (4) (168,308) 204,915 35,902
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 0 0 (191,000) (191,000)
Share-based payments 0 0 0 0 0 (92) (92)
Other equity movements 0 0 0 0 (1,012) 1,048 36
At December 31, 2023 68 0 0 7 122,193 11,356 133,624
Statement of changes in equity, Parent
for the year ended December 31, 2023
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MFT Energy A/S - Annual report 2023
54
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, 2023 were
authorized for issue in accordance with a resolution of the
Board of Directors and Executive Board on March 18, 2024.
The significant accounting policies adopted in the preparation
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 presented, except for the
adoption of new standards effective as of January 1, 2023.
Please refer to note 3 for a description of new accounting
standards and interpretations.
The consolidated financial statements cover the Group con-
sisting of MFT Energy A/S and its subsidiaries while the sepa-
rate 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 accor-
dance with International Financial Reporting Standards (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 historical
cost basis, except for the following financial assets and liabili-
ties, which are measured at fair value:
• Contracts for sale and purchase of gas, power and capaci-
ties not entered into for the Group’s own use
• Derivative financial instruments
The consolidated financial statements and the separate finan-
cial statements are presented in Euro (EUR) and all values are
rounded to the nearest thousands, except when otherwise
indicated.
Changes in accounting policies in 2023
Classification of revenue and cost of sales
In 2022, the Group derived revenue from the transfer of sold
power and gas at a point in time. Revenue comprised consider-
ation from the physical delivery of gas and power under stan-
dardized fixed-price contracts and the sale and purchase of
gas at a number of gas trading hubs and related capacity con-
tracts. Revenue from gas and power contracts, which resulted
in physical delivery, was recognized upon delivery at the con-
tractually stated fixed price adjusted for the fair value of the
contract immediately before delivery.
In 2023, the principles for recognition of gains and losses aris-
ing from trading with energy commodity derivatives, including
futures, options, swaps and certain forward sales and pur-
chases, have changed to the effect that such gains and losses
are excluded from revenue and cost of sales and treated
within the scope of IFRS 9 Financial instruments. Likewise,
energy commodity contracts with physical delivery and a net
settlement option or past practice of settlement of contracts
in net cash or other financial instruments are also to be
excluded from revenue and cost of sales and treated within
the scope of IFRS 9 Financial instruments.
Given the nature of MFT Energy’s business model and the stan-
dard contracts with counterparts, all gains and losses arising
from trading with energy commodity derivatives are accounted
for using IFRS 9 Financial instruments and the own-use exemp-
tion. Therefore, management deems it more appropriate to
present net trading income instead of gross revenue and cost
of goods sold, when all contracts are settled on a net basis.
The change in accounting treatment has no effect on the
reported results, income tax, statement of comprehensive
income or equity in 2022 nor 2023. Changes in presentation
have been accounted for retrospectively, and comparative
information has been restated.
The changes in presentation affect comparative information
for the Group and the Parent Company. The comparative
amounts for the Group in terms of revenue of EUR 7,875,685k,
fair value adjustment of financial and physical energy con-
tracts of EUR 159,702k and cost of sales of a negative EUR
7,393,523k are now classified as net trading income totaling
EUR 641,864k. In terms of the Parent Company’s comparative
amounts related to revenue of EUR 7,875,685k, fair value
adjustment of financial and physical energy contracts of EUR
152,905k and cost of sales of a negative EUR 7,393,523k are
now classified as net trading income totaling EUR 635,067k.
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 trans-
ferred 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.
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
55
Notes to the financial statements
Intercompany transactions, balances and unrealized gains on
transactions between group companies are eliminated. Unreal-
ized losses are also eliminated unless the transaction provides
evidence of an impairment of the transferred asset. Account-
ing policies of subsidiaries have been changed where neces-
sary to ensure consistency with the policies adopted by the
Group.
Non-controlling interests in the results and equity of subsidiar-
ies are shown separately in the consolidated 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 pri-
mary economic environment in which the entity operates (‘the
functional currency’). The consolidated financial statements
and the separate financial statements are presented 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 transac-
tions. Foreign exchange gains and losses resulting from the set-
tlement of such transactions, and from the translation of mone-
tary 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 (EUR) are trans-
lated into Euro (EUR) 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 translated at
average exchange rates, and
• all resulting exchange differences are recognized in other
comprehensive income.
On consolidation, exchange differences arising from the trans-
lation 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.
Other external expenses
Other external expenses comprise expenses related to prem-
ises, consultants, marketing as well as office expenses, etc.
Deposits
Deposits consist of lease deposits, etc. and are measured at
amortized cost.
Prepayments
Prepayments consist of prepaid expenses concerning acquisi-
tions, insurance premiums, subscriptions, and interest.
1 Basis of preparation (continued)
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
56
Notes to the financial statements
The preparation of MFT Energy A/S’s consolidated and sepa-
rate financial statements requires the use of accounting esti-
mates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgment in applying the
Group’s accounting policies.
This note provides an overview of the areas that involved a
high degree of judgment 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 judgments is included in
the description below. Climate changes are not expected to
have an impact on critical accounting estimates or judgments.
Estimates and judgment
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 primarily
applies to the Group’s long-term, structured derivative con-
tracts or contracts in illiquid markets. The majority of these
contracts are valued using models with inputs that include
price curves for each of the different products. These price
curves are built up from available active market pricing data,
including volatility and correlation, and modelled using the
maximum available market-derived information. Additionally,
when limited data exists for certain products or market areas,
prices are determined based on historical and long-term pric-
ing relationships. The use of alternative estimates or valuation
methodologies may result in significantly different values for
such derivatives.
Critical accounting estimates and judgments
Estimates/
judgment
Impact from
estimates and
judgments
Valuation of derivatives Estimate Moderate
Onerous contracts Estimate Low
2 Critical accounting estimates and judgments
Onerous contracts
The Group also trades capacities for which no active market
exists. As there is, thus, no explicit or observable input, the
prices are estimated. Only contracts that are entered into for
the Group’s own use have been subject to such estimates. The
onerous contracts provided for are related to the abovemen-
tioned capacities. The contracts are estimated based on
spreads observable in the market at the balance sheet date
supplemented by a management estimate based on the sub-
sequent 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 18 a for more detailed
description and a display of the fair value hierarchy.
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MFT Energy A/S - Annual report 2023
57
Notes to the financial statements
New standards and interpretations not yet adopted
MFT Energy has adopted relevant new or amended standards
(IFRS) and interpretations (IFRIC), which have been adopted
by the EU and which are effective for the financial year Janu-
ary 1 – December 31, 2023. The following has been adopted:
• Amendments to IAS 8 Accounting policies: Changes in
Accounting Estimates and Errors - Definition of Accounting
Estimates.
• Amendments to IAS 12 Income Taxes: Deferred Tax related
to Assets and Liabilities arising from a Single Transaction.
• Amendments to IAS 1 Presentation of Financial Statements
and IFRS Practice Statement 2: Disclosure of Accounting
policies.
• Amendments to IAS 12 Income Taxes: International Tax
Reform - Pillar Two Model Rules.
• New standard; IFRS 17 Insurance Contracts.
In assessment of the Group, the new or amended standards
and interpretations have neither had a material impact on the
consolidated financial statements nor on the separate financial
statements in 2023.
§
Accounting policies
Net trading income
MFT Energy routinely enters into sale and purchase trans-
actions for physical delivery of energy commodities. All
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 con-
tracts before the delivery date. Consequently, they are
measured at fair value on initial recognition and subse-
quently 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 transaction date fair value deter-
mined by applying a valuation model is deferred and recog-
nized over the term of the contract.
A portion of the sale and purchase transactions for physi-
cal 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 commod-
ity in accordance with the Groups’s expected sale, pur-
chase 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
contract as well as facts and circumstances of how the
contract is included in MFT Energy’s business activity on a
group basis.
Gains and losses arising from trading with energy commod-
ity derivatives, including futures, options, swaps, and cer-
tain forward sales and purchases, are excluded from reve-
nue and presented separately. Likewise, energy commodity
contracts with physical delivery and a net settlement
option or past practice of settlement of contracts in net
cash or other financial instruments are also to be excluded
from revenue and treated within the scope of IFRS 9 Finan-
cial instruments.
Given the nature of MFT Energy’s business model and the
standard contracts with counterparts, all gains and losses
arising from trading with energy commodity derivatives are
accounted for using IFRS 9 Financial instruments.
4 Net trading income
Certain new accounting standards, amendments to accounting
standards and interpretations that have been published are
not mandatory for December 31, 2023 reporting periods and
have not been early adopted by the Group. These standards
include:
• Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Non-current liabilities with covenants (January 1, 2024, not
yet endorsed by the EU).
• Amendments to IAS 7 and IFRS 7: Supplier Finance
Arrangements (January 1, 2024, not yet endorsed by the
EU).
• Amendments to IAS 21, Lack of Exchangeability (January 1,
2025, not yet endorsed by the EU).
The listed amendments are not expected to have a material
impact on the recognition and measurement of the balance
sheet at January 1, 2024, neither in terms of the consolidated
financial statements nor in terms of the separate financial
statements.
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Net trading income from energy commodities 101,525 641,864 73,735 635,067
101,525 641,864 73,735 635,067
3 Impact of new accounting standards
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
58
Notes to the financial statements
5 Financial risk management
The Group’s risk management is predominantly controlled by
the risk team under the supervision of the Risk Committee 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 over-
all risk management appetite covering areas such as market
risk, foreign exchange risk, credit risk, and the use of derivative
financial instruments. The Risk and Audit Committee is orga-
nized by the Board of Directors, and the CFO and CRO of the
Group are participating in the quarterly meetings, in order to
elaborate on reporting and status. The Risk and Audit Commit-
tee works in close cooperation with the Risk Committee
headed by the CRO. The CEO of the Group is part of the Risk
Committee as well. The Risk Committee has the responsibility
for ensuring that the level of risk is within the approved limits
and policies while the Risk and Audit Committee ensures that
the risk taken is within the overall risk capacity. New risk limits
and policies are first assessed by the Risk and Audit Commit-
tee before being granted final approval by the Board of Direc-
tors.
The risk team headed by the CRO is the operational function
constituting a second line of defense, while the operating
units constitute the first line of defense. The risk team is moni-
tors, identifies, performs stress tests, and evaluates risk based
on live data from the operating units. The risk team works
closely together with the finance and treasury teams on the
monitoring and assessment of currency and liquidity risk.
When all relevant criteria are met, hedge accounting is applied
to remove the accounting mismatch between the hedging
instrument and the hedged item. Hedging is used to decrease
or eliminate market and currency risk. The use of hedging is
closely determined under the risk mandate issued to the trad-
ing teams 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 risk relates to changing
commodity prices and foreign currency 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 depos-
its, etc. The market risk framework is designed to systemati-
cally identify, assess, and report market risk by continuously
monitoring the trading activities of the Group. As 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 certain loss limits are
reached over a period of time. Different limits have been
defined within the Group in order to reflect the different expo-
sures and risks.
MFT Energy is focused on short-term trading. The maturity of
its financial instruments supports this short-term focus, as the
instruments primarily mature within 12 months. Please refer to
the ‘Liquidity risk’ section for an overview of the maturity of
financial instruments.
Commodity price risk
Commodity price risk is the risk that the fair value or future
cash flows of an exposure will fluctuate because of changes 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 the markets.
The risk linked to commodity prices is different depending on
whether it is a long or short-term position.
The table below is prepared on an ‘all else equal’ assumption.
Only the commodity price is subject to changes. The percent-
age change in commodity prices used to determine sensitivity
is estimated by the leadership as a probable scenario, taking
into consideration the historical volatility and the markets that
have been calm recently.
Sensitivity by commodity
GROUP
Impact on profit or
loss before tax
EUR ’000 2023 2022
Power, increase of 10% (1,714) 232
Power, decrease of 10% 1,714 (232)
Gas, increase of 10% 286 (41)
Gas, decrease of 10% (286) 41
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
59
Notes to the financial statements
5 Financial risk management (continued)
The sensitivity analysis shows the impact on profit or loss
before tax. The effect on profit or loss after tax will be 78% of
the profit or loss before tax. The effect on equity will be equiv-
alent to the value of profit or loss after tax.
The Group is actively using forward contracts to hedge posi-
tions 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 inventory is hedged using forward contracts.
MFT Energy applies hedge accounting to fair value hedges on
inventory. Any ineffectiveness of a hedge position is recog-
nized in the income statement once occurred.
The Group does not consider the ineffective part of the hedge
position to be material as the hedge policy and the Group
determine that the nominal positions need to be fully hedged.
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 for-
eign exchange rates. MFT Energy’s exposure to foreign cur-
rency 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 Committee, and the
risk is continuously monitored by the risk team in close collab-
oration with the treasury team. The exposure is not considered
material at Group level.
The day-to-day commercial business is exposed to a wide
range of different currencies. However, there is no single cur-
rency exposure that is considered material. The functional cur-
rency of most of the entities in the Group is EUR since the
majority of the activities are performed in market areas where
commodity products are traded in EUR.
The following table only contains the exposure of the Group.
The table discloses the net monetary amount in currencies
other than the functional currency.
Monetary items and sensitivity of the Group
EUR ’000 2023 2022
Cash and
receiv-
ables
Potential
volatility
of ex-
change
rate*
Impact
on profit
or loss
before
tax
Cash and
receiv-
ables
Potential
volatility
of ex-
change
rate*
Impact
on profit
or loss
before
tax
DKK/EUR 1,350 1% 13 2,618 1% 26
USD/EUR 11,637 5% 554 9,464 7% 619
GBP/EUR 9,735 5% 464 43,829 5% 2,087
CZK/EUR 959 5% 46 13,235 5% 630
AUD/EUR 5,988 1% 59 6,142 1% 60
BGN/EUR 1,597 1% 16 11,719 0% 0
HUF/EUR 1,212 5% 58 17 7% 1
JPY/EUR 2,106 7% 138 362 6% 20
* Changes in the exchange rate in the opposite direction yield an inverse result.
Interest rate risk
The exposure to the risk of changes in interest rates relates
primarily to interest-bearing assets and liabilities in the Group
with a floating rate. The exposure is not considered material
as the Group is primarily financed by its own equity. Please
refer to ‘Liquidity risk’ for an overview of the maturity of the
financial liabilities. The majority of the liabilities are maturing
within 12 months, while the risk of material changes in the
interest rates is considered low.
Credit risk
Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions, as well as credit expo-
sures from counterparties, including outstanding receivables.
The credit risk is managed on a consolidated basis and moni-
tored by the risk team in accordance with the written princi-
ples and policies of MFT Energy. The risk team monitors the
credit risk daily and is actively optimizing on the bank collater-
als and bank guaranties made to counterparties in close col-
laboration 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. The leadership considers its credit risk exposure to com-
modity exchanges to be insignificant due to the daily settle-
ment. The trades entered into are in general performed under
standard agreements that allow netting statements. These
agreements are mitigating the credit risk of the Group.
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
60
Notes to the financial statements
5 Financial risk management (continued)
Please refer to note 20 for detailed information about offset-
ting of financial assets and liabilities.
Trade receivables
To measure the expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics and
the days past due. No loss allowances were made in 2023 and
2022. The Group has never realized any losses from counter-
parties. Trade receivables primarily consist of receivables from
commodity exchanges, clearing houses and TSOs. 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 expectation of recovery include, for example,
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.
A considerable part of MFT Energy’s counterparts are covered
by standard agreements. Such agreements contain regulations
on credit, payment, and offsetting. This means that MFT
Energy is less exposed to credit risk than if trading with fewer
or no standardized terms. The minimal risk and low risk cover
TSOs, exchanges, and other A-rated counterparts. MFT Energy
assesses that these counterparts carry no or only limited
credit risk as they are part of public security of supply or have
high credit ratings. The category ‘Not rated’ covers counter-
parts with minor claims that have not been formally classified
in the year-end process or counterparts with no formal rating.
MFT Energy carries out an evaluation of the credit risk of all-
counterpart before trading is commenced.
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 the liquidity required by the Group. This is
ensured by appropriate cash management and maintaining ade-
quate liquidity reserves at any time through a combination of
readily available cash and committed credit facilities. The avail-
able cash is monitored daily to ensure that the reserves at all
times are in accordance with the written principles and policies
set by the Board of Directors.
MFT Energy purchases German government bonds in order to
mitigate the risk and ensure interest income for the excess
liquidity. Management considers its credit risk exposure to be
insignificant due to the nature and short maturity of the bonds.
The Group regularly enters into commodity derivative transac-
tions 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 offset-
ting positions may not require daily margin calls, or no margin
calls at all. Movements in the market prices of 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 the
current credit lines to be sufficient to fulfill the obligations under
such margin call agreements for possible changes in 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 too
much.
Maturities of financial liabilities
The amounts disclosed in the following tables are the contrac-
tual undiscounted cash flows. Balances due within 12 months
equal their carrying balances as the impact of discounting is not
significant.
Credit quality of the Group’s counterparties
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Minimal risk (A rated) 234,494 711,765 228,853 708,993
Low risk (B rated) 2,200 2,200 2,200 2,200
High risk (C rated) 28 37 28 37
Not rated 7,199 22,083 1,940 17,215
Total 243,921 736,085 233,021 728,445
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MFT Energy A/S - Annual report 2023
61
Notes to the financial statements
5 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, 2023
Trade payables 35,490 0 0 0 35,490 35,490
Lease liabilities 629 599 241 0 1,469 1,469
Derivatives held for trading 120,108 0 0 0 120,108 120,108
Provisions 2,680 5,725 0 0 8,405 8,405
Other liabilities 6,097 0 0 0 6,097 6,097
165,004 6,324 241 0 171,569 171,569
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
Provisions 11,595 5,653 2,752 0 20,000 20,000
Other liabilities 37,539 0 0 0 37,539 37,539
296,213 7,022 6,482 147 309,864 308,843
Contractual maturities of financial liabilities
PARENT
EUR ’000 < 1 year 1 - 2 year 2 - 5 years > 5 years
Total
contractual
cash flows
Carrying
amount
At December 31, 2023
Trade payables 34,668 0 0 0 34,668 34,668
Lease liabilities 277 269 97 0 643 643
Derivatives held for trading 119,923 0 0 0 119,923 119,923
Payables to group enterprises 5,791 220,033 0 0 225,824 221,488
Provisions 2,680 5,725 0 0 8,405 8,405
Other liabilities 2,306 0 0 0 2,306 2,306
165,645 226,027 97 0 391,769 387,433
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 0 653,831 647,391
Provisions 11,595 5,653 2,752 0 20,000 20,000
Other liabilities 5,324 0 0 0 5,324 5,324
267,358 657,474 6,482 147 931,461 924,000
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MFT Energy A/S - Annual report 2023
62
Notes to the financial statements
6 Staff costs
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Wages and salaries 19,854 57,000 8,043 8,168
Share-based payments (92) 141 (92) 141
Pension cost, defined contribution plans 288 281 165 89
Other social security costs 114 932 58 241
20,164 58,354 8,174 8,639
Average number of employees 136 94 71 44
Wages and salaries, pension contributions and other social
security costs are considered to be short-term employee
benefits.
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Wages and salaries 3,578 4,936 3,136 4,818
Share-based payment (68) 46 (68) 46
Pension contribution 38 24 36 12
Other social security costs 65 14 64 21
Total compensation key management personnel 3,613 5,020 3,168 4,897
Executive Board
Wages and salaries 356 270 356 270
Pension contribution 7 2 7 2
363 272 363 272
Board of Directors
Directors’ remuneration 208 66 208 60
Total compensation Executive Board and Board of
Directors 571 338 571 332
Key management personnel compensation
Key management personnel consists of the Executive Leader-
ship and the Board of Directors. The compensation paid or
payable to key management personnel for employee services
is shown below:
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MFT Energy A/S - Annual report 2023
63
Notes to the financial statements
6 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 Decem-
ber 2023, 1,797 warrants were granted under the program
(December 2022: 475). The warrants granted in 2023 are exer-
cisable within one year as of January 2027 or upon an exit
event, whichever is earlier. The program sets out a vesting
period of three years. Settlement is made in shares of MFT
Energy A/S.
The warrants are granted in accordance with the authoriza-
tions given to the Board of Directors by the shareholders. The
Board of Directors has fixed the terms and size of the grants,
taking into account the authorization from the shareholders,
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 is made on the establishment of the
program. The warrants granted are subject to the provisions of
the Danish Public 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 2023, the fair value of warrants recognized in the income
statement amounted to EUR 51k (2022: EUR 57k). No key man-
agement 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 at which the employees are able to buy the share is
equivalent to the market price.
The Board of Directors is covered by a comparable warrant
program. Once a member of the Board has been a board mem-
ber for 12 months, the warrants will be granted. The key terms
of the program are the same as for the employees. In Decem-
ber 2023, 357 warrants were granted under the program
(December 2022: 0).
Number of shares
GROUP & PARENT
2023
Board of
Directors Employees
Outstanding at the beginning of the period 0 2,514
Granted during the period 357 1,797
Forfeited during the period 0 (275)
Outstanding at the end of the period 357 4,036
Weighted-average remaining contractual life 3 years 4 years
GROUP & PARENT
2022
Board of
Directors Employees
Outstanding at the beginning of the period 0 2,039
Granted during the period 0 475
Forfeited during the period 0 0
Outstanding at the end of the period 0 2,514
Weighted-average remaining contractual life 4 years 5 years
None of the warrants are exercisable at the end of the period.
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MFT Energy A/S - Annual report 2023
64
Notes to the financial statements
6 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.
Under the share purchase programs, the employees obtain a
legal non-recourse shareholder loan from MFT Energy A/S
which in combination with an injection of private funds from
the employees is used to purchase a fixed number of shares.
During 2023, all employees covered by the program, repaid the
debt and are no longer subject to the program.
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 deter-
mined 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 2023, the total fair value of employee share purchase pro-
grams recognized in the income statement amounted to a
negative EUR 143k (2022: EUR 84k) of which a negative EUR
68k relates to key management personnel (2022: EUR 46k).
Number of shares
GROUP & PARENT
2023
Key
management
Other
employees Total
Outstanding at the beginning of the period 5,103 5,103 10,206
Forfeited during the period (5,103) (5,103) (10,206)
Outstanding at the end of the period 0 0 0
Weighted-average remaining contractual life 0 0 0
GROUP & PARENT
2022
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
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MFT Energy A/S - Annual report 2023
65
Notes to the financial statements
6 Staff costs (continued) 7 Other operating expenses
PARENT
EUR ’000 2023 2022
Reimbursements to subsidiaries (72,483) (635,103)
(72,483) (635,103)
§
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, contrac-
tual or voluntary basis. MFT Energy has no further payment
obligations once the contributions have been paid. The
contributions are recognized as employee benefit 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
certain 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 esti-
mates of the number of warrants that are expected to vest
based on service conditions. Adjustments, if any, are recog-
nized 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
nature of the arrangement is considered an option arrange-
ment due to the non-recourse financing from MFT Energy
A/S. Consequently, the arrangement is accounted for as an
employee warrant program.
§
Accounting policies
Other operating expenses
MFT Energy A/S has entered into gross profit-split agree-
ments 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 con-
sists solely of reimbursements to the subsidiaries.
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MFT Energy A/S - Annual report 2023
66
Notes to the financial statements
8 Financial income and expenses
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Financial income
Interest income, banks 1,598 65 710 36
Financial income, bonds 6,886 951 6,886 951
Financial income, other 1,439 258 1,933 230
Gains on exchange forward derivatives 0 303 0 303
Total financial income 9,923 1,577 9,529 1,520
Financial expenses
Interest on borrowings 109 429 110 429
Interest on lease liabilities 39 2 20 2
Total interest expense related to financial
liabilities not at fair value through profit
or loss 148 431 130 431
Interest expense, group enterprises 0 0 6,643 2,827
Interest expense, income tax 6,265 0 682 0
Financial expenses, guarantees 1,983 1,117 0 0
Financial expenses, bonds 1,561 471 1,561 471
Financial expenses, other 1,870 851 1,776 817
Foreign exchange rate losses 1,233 1,772 1,237 1,798
Loss on exchange forward derivatives 158 0 158 0
Total financial expenses 13,218 4,642 12,187 6,344
§
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 real-
ized and unrealized exchange rate adjustments as well as
interest expenses and realized losses on exchange forward
derivatives.
Foreign currency translation
Foreign currency translation of receivables from and pay-
ables to subsidiaries is recognized in the income statement
of MFT Energy A/S under financial income or financial
expenses. This is only relevant to the Parent Company.
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MFT Energy A/S - Annual report 2023
67
Notes to the financial statements
9 Income tax expenses
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Current tax
Current tax on profit for the year 13,944 130,825 (2,268) 1,976
Deferred income tax 2,551 (4,433) 2,551 (4,396)
Income tax expense 16,495 126,392 283 (2,420)
GROUP
EUR ’000 2023 2022
Reconciliation of effective tax rate
Tax at the Danish tax rate of 22% (2022: 22%) 15,058 126,088
Tax effects of amounts which are not deductible (taxable) in calculating
taxable income:
Non-deductible expenses 1,606 81
Other adjustments (169) 223
Income tax expense 16,495 126,392
Effective tax rate 24% 22%
PARENT
EUR ’000 2023 2022
Reconciliation of effective tax rate
Tax at the Danish tax rate of 22% (2022: 22%) 7,962 56,715
Tax effects of amounts which are not deductible (taxable) in calculating
taxable income:
Income from investments in subsidiaries (8,001) (59,208)
Non-deductible expenses 322 73
Income tax expense 283 (2,420)
Effective tax rate 1% (1%)
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. The leader-
ship periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regula-
tion is subject to interpretation and considers whether it is
probable that a taxation authority will accept an uncertain
tax treatment. 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
the 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.
§
Accounting policies
Income tax expenses
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.
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
68
Notes to the financial statements
10 Intangible assets
PARENT
EUR ’000 Software Total
Cost:
At January 1, 2023 6 6
At December 31, 2023 6 6
Accumulated amortization and impairment losses:
At January 1, 2023 6 6
Amortization charge 0 0
At December 31, 2023 6 6
Carrying amount at December 31, 2023 0 0
Cost:
At January 1, 2022 6 6
At December 31, 2022 6 6
Accumulated amortization and impairment losses:
At January 1, 2022 5 5
Amortization charge 1 1
At December 31, 2022 6 6
Carrying amount at December 31, 2022 0 0
GROUP
EUR ’000
Incorporeal
rights Software Total
Cost:
At January 1, 2023 71 6 77
At December 31, 2023 71 6 77
Accumulated amortization and impairment losses:
At January 1, 2023 31 6 37
Amortization charge 4 0 4
At December 31, 2023 35 6 41
Carrying amount at December 31, 2023 36 0 36
Cost:
At January 1, 2022 71 6 77
At December 31, 2022 71 6 77
Accumulated amortization and impairment losses:
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
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MFT Energy A/S - Annual report 2023
69
Notes to the financial statements
10 Intangible assets (continued)
Software
Software comprises the cost associated with acquiring soft-
ware 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 asset 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
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MFT Energy A/S - Annual report 2023
70
Notes to the financial statements
GROUP
EUR ’000
Other fixtures,
fittings and
equipment
Leasehold
improvements Total
Cost:
At January 1, 2023 161 69 230
Additions 209 48 257
At December 31, 2023 370 117 487
Accumulated depreciation and impairment losses:
At January 1, 2023 64 31 95
Depreciation charge 89 18 107
At December 31, 2023 153 49 202
Carrying amount at December 31, 2023 217 68 285
Cost:
At January 1, 2022 50 58 108
Additions 111 11 122
At December 31, 2022 161 69 230
Accumulated depreciation and impairment losses:
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
PARENT
EUR ’000
Other fix-
tures, fittings
and equip-
ment
Leasehold
improvements Total
Cost:
At January 1, 2023 154 69 223
Additions 0 48 48
At December 31, 2023 154 117 271
Accumulated depreciation and impairment losses:
At January 1, 2023 64 32 96
Depreciation charge 42 17 59
At December 31, 2023 106 49 155
Carrying amount at December 31, 2023 48 68 116
Cost:
At January 1, 2022 50 58 108
Additions 104 11 115
At December 31, 2022 154 69 223
Accumulated depreciation and impairment losses:
At January 1, 2022 29 22 51
Depreciation charge 35 10 45
At December 31, 2022 64 32 96
Carrying amount at December 31, 2022 90 37 127
11 Property, plant and equipment
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MFT Energy A/S - Annual report 2023
71
Notes to the financial statements
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Amounts recognized in the balance sheet
Right-of-use assets
Properties 1,447 45 636 45
1,447 45 636 45
Additions to the right-of-use assets 1,901 0 812 0
Lease liabilities
Current 629 47 277 47
Non-current 840 0 366 0
1,469 47 643 47
Amounts recognized in the income statement
The income statement shows the following amounts
relating to leases:
Depreciation charge of right-of-use assets
Properties 464 110 226 110
464 110 226 110
Interest expense on lease liabilities 39 2 19 2
Expenses relating to short-term leases 61 123 37 123
Expenses relating to leases of low-value assets 16 48 3 48
Total cash outflow for leases 580 283 285 283
Please refer to note 5 for a disclosure of contractual maturities of the financial liabilities.
11 Property, plant and equipment (continued) 12 Leases
§
Accounting policies
Property, plant and equipment
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
period.
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 compar-
ing proceeds with the 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 val-
ues, 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 when-
ever 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 car-
rying amount exceeds its recoverable amount. The recover-
able 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
identifiable cash inflows which are largely independent of
the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets that suffered
an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
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MFT Energy A/S - Annual report 2023
72
Notes to the financial statements
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Deferred tax
Deferred tax at the beginning of period (4,447) (14) (4,410) (14)
Deferred tax recognized in the income statement 2,550 (4,433) 2,550 (4,396)
Deferred tax at year end (1,897) (4,447) (1,860) (4,410)
Deferred tax relates to:
Property, plant and equipment (13) (10) (13) (10)
Deferred tax on accrued expenses (40) (37) 0 0
Provisions (1,849) (4,400) (1,849) (4,400)
Lease liabilities 5 0 2 0
Total (1,897) (4,447) (1,860) (4,410)
Of which presented as deferred tax assets 1,897 4,447 1,860 4,410
12 Leases (continued) 13 Deferred tax
§
Accounting policies
Leases
MFT Energy leases various properties. Property contracts
are typically made for one to five years but may have
extension and termination options.
Assets and liabilities arising from a lease are initially mea-
sured on a present value basis. Lease liabilities include the
net present value of fixed payments (including in-sub-
stance 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 cer-
tain of exercising that option. Lease payments to be made
under reasonably 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
straight-line 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.
§
Accounting policies
Deferred tax
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 liabili-
ties 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.
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MFT Energy A/S - Annual report 2023
73
Notes to the financial statements
PARENT
EUR ’000 2023 2022
Cost at January 1, 2023 1,864 1,869
Additions for the year 2,289 0
Disposals for the year 0 (5)
Cost at December 31, 2023 4,153 1,864
Value adjustments at January 1, 2023 291,522 44,114
Profit for the year 36,367 269,126
Dividend to the Parent Company (204,675) (21,499)
Other adjustments (1,014) (219)
Value adjustments at December 31, 2023 122,200 291,522
Carrying amount at December 31, 2023 126,353 293,386
14 Investments in subsidiaries
Name
Place of
registered office Share capital
Votes and
ownership
MFT Energy 1 ApS Denmark DKK 55,626 92%
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 7 ApS Denmark DKK 40,000 56%
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 73%
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. Turkey TRY 2,000,000 61%
MFT Energy APAC 3 KK Japan JPY 5,000,000 80%
Investments in subsidiaries are specified as follows:
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74
Notes to the financial statements
14 Investments in subsidiaries (continued)
§
Accounting policies
Investments in subsidiaries
The accounting policies below are only relevant to the prepa-
ration of the separate financial statements.
Investments in subsidiaries are recognized using the equity
method of accounting. Consequently, investments are initially
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. Divi-
dends received are recognized as a reduction in the carrying
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 obliga-
tions 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
Energy 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 poli-
cies of equity-accounted investees have been changed
where necessary to ensure consistency with the policies of
MFT Energy A/S.
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75
Notes to the financial statements
15 Non-controlling interests
A significant part of the Group’s activities are performed
through five subsidiaries with significant non-controlling inter-
ests. Set out in the following table is summarized financial
information for each subsidiary that has non-controlling inter-
ests that are material to the Group. The amounts disclosed for
each subsidiary are before intercompany eliminations.
2023
EUR ’000 MFT Energy 1 ApS MFT Energy 2 ApS MFT Energy 3 ApS MFT Energy 5 ApS MFT Energy 6 ApS
Non-controlling interests’ ownership 8.01% 39.92% 40.00% 38.88% 46.17%
Summarized balance sheet
Current assets 9 8 3 3,158 55
Current liabilities 8,844 1,066 590 3,049 8,972
Current net assets (8,835) (1,058) (587) 109 (8,917)
Non-current assets 55,856 15,835 13,935 10,909 123,003
Non-current liabilities 804 0 0 56 688
Non-current net assets 55,052 15,835 13,935 10,853 122,315
Summarized statement of comprehensive income
Gross profit 33,896 4,592 2,952 4,474 39,574
Profit for the period 20,546 3,191 1,714 2,604 24,706
Other comprehensive income 0 0 0 0 0
Total comprehensive income 20,546 3,191 1,714 2,604 24,706
Profit allocated to non-controlling interests 1,645 1,274 686 1,006 11,408
Dividends paid to non-controlling interests 2,838 2,377 2,400 771 127,940
Summarized cash flows
Cash flows from operating activities 6,720 173 (1,628) 2,050 (90,443)
Cash flows from investing activities 0 0 0 0 0
Cash flows from financing activities (6,731) (171) 1,624 (260) 90,440
Net increase/(decrease) in cash and cash equivalents (11) 2 (4) 1,790 (3)
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MFT Energy A/S - Annual report 2023
76
Notes to the financial statements
15 Non-controlling interests (continued)
2022
EUR ’000 MFT Energy 1 ApS MFT Energy 2 ApS MFT Energy 3 ApS MFT Energy 5 ApS MFT Energy 6 ApS
Non-controlling interests’ ownership 10.26% 39.61% 40.00% 38.56% 45.69%
Summarized balance sheet
Current assets 20 34 8 3 48
Current liabilities 26,228 4,111 3,933 2,840 124,999
Current net assets (26,208) (4,077) (3,925) (2,837) (124,951)
Non-current assets 99,841 21,664 21,559 11,911 493,642
Non-current liabilities 962 0 0 0 0
Non-current net assets 98,879 21,664 21,559 11,911 493,642
Summarized statement of comprehensive income
Gross profit 80,851 17,824 18,108 11,734 497,175
Profit for the period 51,524 13,380 13,403 7,956 363,828
Other comprehensive income 0 0 0 0 0
Total comprehensive income 363,828 363,828 363,828 7,956 363,828
Profit allocated to non-controlling interests 5,160 5,300 5,361 3,068 166,250
Dividends paid to non-controlling interests 145 1,089 1,360 180 6,364
Summarized cash flows
Cash flows from operating activities 63,864 15,716 15,149 10,272 482,364
Cash flows from investing activities 0 0 0 0 0
Cash flows from financing activities (63,854) (15,719) (15,154) (10,275) (482,371)
Net increase/(decrease) in cash and cash equivalents 10 (3) (5) (3) (7)
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MFT Energy A/S - Annual report 2023
77
Notes to the financial statements
16 Inventories
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Gas storage at weighted average cost 40,310 44,629 40,310 44,629
Adjustment from fair value hedging (9,368) (11,609) (9,368) (11,609)
Total inventories 30,942 33,020 30,942 33,020
Inventories consist of gas intended for resale. The expenses
associated with the gas trading inventories are recognized as
‘net trading income’ in the income statement. The outflow from
our gas storages recognized during the year amounted to MWh
94,561k (2022: MWh 705,626k).
There were no write-down of inventories to net realizable value
during 2023 and 2022.
The Group has designated the spot component of gas swap
contracts as the hedging instrument. The cumulative fair value
adjustment recognized in inventories as of 31 December 2023
amounts to a negative EUR 9,368k (2022: a negative EUR
11,609k). As further described in note 5, the Group hedges the
price risk of gas inventories. These contracts are designated as
fair value hedges of the gas inventory.
§
Accounting policies
Inventories
The gas storage recognized in inventories is acquired and
used for trading. Inventories are measured at the lower of
cost under the weighted average cost method adjusted by
gains and losses from hedging instruments and net realiz-
able value. The net realizable value of inventories is calcu-
lated at the amount expected to be generated by sale of
the inventories in the process of normal trading 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 are recorded as an adjustment to the car-
rying value of the inventory. The carrying amount of inven-
tory 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 attribut-
able to the hedged risk are recorded as part of the carry-
ing amount of the hedged item and are 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.
The cumulative fair value adjustment recognized in the carrying
amount of inventories during 2023 amounted to EUR 2,241k
(2022: a negative EUR 8,539k). The Group is hedging according
to the written principles set out by the Risk Committee, hence,
all storage is hedged unless otherwise stated in the mandates
given. The fair value adjustments, as well as any ineffective-
ness, are included in the line item net trading income from
financial and physical energy contracts, along with the adjust-
ment of the other trades and hedge positions.
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MFT Energy A/S - Annual report 2023
78
Notes to the financial statements
17 Trade receivables
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Trade receivables from contracts 17,144 33,346 15,114 29,083
Loss allowance 0 0 0 0
Net trade receivables 17,144 33,346 15,114 29,083
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 5 for a description of the expected credit
losses and risks regarding trade receivables.
§
Accounting policies
Trade receivables
Trade receivables are amounts due from commodities as
part of the ordinary course of business. Trade receivables
are recognized initially at the amount of consideration that
is unconditional. The Group holds the trade receivable with
the objective of collecting the contractual cash flows and
therefore measures them subsequently at amortized cost
using the effective interest method, less allowance for life-
time expected losses. MFT Energy applies the IFRS 9 simpli-
fied 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 within operating profit. Subsequent
recoveries of amounts previously written down are recog-
nized as a reduction of costs against the same line item.
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MFT Energy A/S - Annual report 2023
79
Notes to the financial statements
18 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 arbitrag-
ing prices between markets, locations and time periods. Finan-
cial risks relating to the financial instruments are managed on
a portfolio basis.
The Group measures the following financial assets and liabili-
ties 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 classi-
fied its financial instruments into three levels prescribed under
the accounting standards.
Exchange-traded derivatives as well as foreign currency con-
tracts are valued 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 commod-
ity sale and purchase contracts including commodity forwards
are generally valued using readily available information in the
public markets and, if necessary, quotations provided by bro-
kers and price index developers. These quotes are corrobo-
rated with market data and are predominately categorized as
level 2 of the fair value hierarchy.
Structured and capacity contracts in MFT Energy are measured
using internal models. Internal models refer to standard valua-
tion models that use market forward levels on standard instru-
ments, as well as incorporate inputs for the volatility of the
underlying indices, markets or commodities.
Valuation processes
The valuation process of the derivatives includes input from
relevant employees of MFT Energy, and the final valuation is
verified and approved by the risk management function. In
order to minimize the use of subjective estimates or modifica-
tions of parameters and calculation models, it is MFT Energy’s
policy to determine fair values based on the external informa-
tion that most accurately reflects the market values. The
Group uses pricing services and benchmark services to
increase the 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.
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MFT Energy A/S - Annual report 2023
80
Notes to the financial statements
18 Fair value measurement (continued)
GROUP
2023
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 7,257 0 0 7,257
Gas trading derivatives 3 144,746 0 144,749
Foreign currency derivatives 95 0 0 95
Total financial assets at fair value 7,355 144,746 0 152,101
Non-financial assets
Gas trading inventories 0 (9,368) 0 (9,368)
Total financial and non-financial assets 7,355 135,378 0 142,733
Financial liabilities
Power trading derivatives 5,546 0 0 5,546
Gas trading derivatives 0 114,562 0 114,562
Foreign currency derivatives 0 0 0 0
Total financial liabilities at fair value 5,546 114,562 0 120,108
GROUP
2022
EUR ’000
Quoted prices
in active
markets
Level 1
Significant
observable
inputs
Level 2
Un-
observable
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
Foreign currency derivatives 0 0 0 0
Total financial liabilities at fair value 3,656 175,372 0 179,028
The below table sets out the fair value hierarchy for assets
and liabilities measured at fair value in the balance sheet:
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MFT Energy A/S - Annual report 2023
81
Notes to the financial statements
18 Fair value measurement (continued)
PARENT
2023
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 7,155 0 0 7,155
Gas trading derivatives 3 144,746 0 144,749
Foreign currency derivatives 95 0 0 95
Total financial assets at fair value 7,253 144,746 0 151,999
Non-financial assets
Gas trading inventories 0 (9,368) 0 (9,368)
Total financial and non-financial assets 7,254 135,378 0 142,631
Financial liabilities
Power trading derivatives 5,361 0 0 5,361
Gas trading derivatives 0 114,562 0 114,561
Foreign currency derivatives 0 0 0 0
Total financial liabilities at fair value 5,361 114,562 0 119,923
PARENT
2022
EUR ’000
Quoted prices
in active
markets
Level 1
Significant
observable
inputs
Level 2
Un-
observable
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
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MFT Energy A/S - Annual report 2023
82
Notes to the financial statements
18 Fair value measurement (continued)
§
Accounting policies
Fair value measurement
The Group measures financial instruments, such as deriva-
tives, at fair value at each balance sheet date. Fair value is
the price that would be received for selling an asset or paid
for transferring a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transac-
tion 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 advan-
tageous 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 pric-
ing 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 similarly to financial com-
modity contracts.
MFT Energy uses valuation techniques that are appropriate
in the circumstances and for which sufficient data is avail-
able to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorized
according 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.
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 sub-
sequently remeasured at fair value at the end of the report-
ing 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 accounting purpose
and initially recognized at fair value with subsequent remea-
surement at fair value through profit and loss and recog-
nized 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 docu-
ments 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 docu-
ments its risk management objective and strategy for under-
taking 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.
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MFT Energy A/S - Annual report 2023
83
Notes to the financial statements
19 Financial assets and financial liabilities
The Group and the Parent Company hold the following financial instruments:
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Financial assets
Financial assets measured at fair value through profit
and loss
Derivatives and commodity contracts not entered
into for own use 152,101 166,627 151,999 166,392
Derivatives in hedge accounting, inventory (9,368) (11,609) (9,368) (11,609)
142,733 155,018 142,631 154,783
Financial assets at amortized cost
Deposits 422 300 277 245
Trade receivables 17,144 33,346 15,114 29,083
Receivables from group enterprises 5,286 1,254 24,809 15,062
Other receivables 20,971 198,833 12,054 195,690
Current asset investments 64,416 348,888 64,416 348,888
Cash and cash equivalents 106,164 134,344 99,573 127,677
214,403 716,965 216,243 716,645
Financial assets 357,136 871,983 358,874 871,428
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Financial liabilities
Financial liabilities measured at fair value through
profit and loss
Derivatives and commodity contracts not entered into
for own use 120,108 179,028 119,923 179,009
120,108 179,028 119,923 179,009
Financial liabilities at amortized cost
Trade payables 35,490 55,010 34,668 55,010
Borrowings 0 5,611 0 5,611
Payables to group enterprises 0 0 221,488 647,391
Lease liabilities 1,469 47 643 47
Corporate tax liabilities 13,521 125,578 0 0
Other payables 6,097 37,539 2,306 5,324
56,577 223,785 259,105 713,383
Financial liabilities 176,685 402,813 379,028 892,392
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MFT Energy A/S - Annual report 2023
84
Notes to the financial statements
19 Financial assets and financial liabilities (continued)
GROUP
2023 2022
EUR ’000 Current
Non-
current Total Current
Non-
current Total
Borrowings
Credit institutions 0 0 0 1,008 4,603 5,611
0 0 0 1,008 4,603 5,611
PARENT
2023 2022
EUR ’000 Current
Non-
current Total Current
Non-
current Total
Borrowings
Credit institutions 0 0 0 1,008 4,603 5,611
Payables to group enterprises 0 215,697 215,697 0 647,391 647,391
0 215,697 215,697 1,008 651,994 653,002
In terms of borrowings, the fair values are not materially differ-
ent from their carrying amounts, since the interest payable 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 out-
standing amount is changing continuously. The remaining out-
standing borrowings carried a floating interest rate in both
2023 and 2022.
§
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 usu-
ally paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless pay-
ment 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 effec-
tive interest method.
Borrowings
Borrowings are initially recognized at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured 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 recog-
nized 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
occurs. To the extent there is no evidence that it is proba-
ble that some or all of the facility will be drawn down, the
fee is capitalized as prepayment for liquidity services and
amortized over the term of the facility to which it relates.
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MFT Energy A/S - Annual report 2023
85
Notes to the financial statements
20 Offsetting financial assets and financial liabilities
GROUP
2023
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 292,697 (275,553) 17,144 1,135 18,279
Derivatives held for trading 356,471 (213,738) 142,733 0 142,733
Total financial assets 649,168 (489,291) 159,877 1,135 161,012
Financial liabilities
Trade payables 311,043 (275,553) 35,490 (7,731) 27,759
Derivatives held for trading 333,846 (213,738) 120,108 (581) 119,527
Total financial liabilities 644,889 (489,291) 155,598 (8,312) 147,286
GROUP
2022
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 31,986 220,351
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 currently has a legally enforceable right
to set off the recognized amounts, and
• that MFT Energy intends either to settle on a net basis, or
to realize the assets and settle the liabilities simultane-
ously.
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 agree-
ments and similar agreements (i.e. in the event of default) and
collateral provided or received under such agreements.
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
86
Notes to the financial statements
20 Offsetting financial assets and financial liabilities (continued)
PARENT
2023
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 290,667 (275,553) 15,114 1,135 16,249
Derivatives held for trading 356,369 (213,738) 142,631 0 142,631
Total financial assets 647,036 (489,291) 157,745 1,135 158,880
Financial liabilities
Trade payables 310,221 (275,553) 34,668 (7,731) 26,937
Derivatives held for trading 333,661 (213,738) 119,923 (581) 119,342
Total financial liabilities 643,882 (489,291) 154,591 (8,312) 146,279
PARENT
2022
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
§
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 cur-
rently 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 coun-
terparties to manage the credit risks associated primarily with
over-the-counter commodity trading. These master netting
agreements enable MFT Energy and their 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 offset-
ting right is not unconditional are disclosed in the notes.
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87
Notes to the financial statements
21 Other receivables 22 Current asset investments
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Deposits related to trading 16,573 197,223 8,953 194,163
Other receivables 999 171 257 137
Other receivables, net 17,572 197,394 9,210 194,300
GROUP & PARENT
EUR ’000 2023 2022
German government bonds 64,416 348,888
Total current assets investments 64,416 348,888
Deposits related to trading are cash amounts that need to be
provided to specific counterparties in order to initiate a trad-
ing position and cover margin calls.
In order to mitigate the risk and ensure interest income on
excess liquidity, the Group purchases German government
bonds, all of which have a short maturity period.
§
Accounting policies
Other receivables
Other receivables consist of deposits related to trad-
ing, VAT receivable and miscellaneous receivables.
Other receivables are measured at amortized cost.
Deposits represent the amount of cash required for
trading positions with certain counterparties.
§
Accounting policies
Current asset investments
Current asset investments include bonds that are mea-
sured at amortized cost, which are recognized initially at
fair value plus any transaction costs incurred. Subse-
quently, 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.
The bonds will be held within a business model where the
investment is returned through a repayment of the princi-
pal and interest on the principal amount. The maximum
duration of the bonds is 12 months.
Interest income and any amortization of premium are rec-
ognized in the income statement using the effective inter-
est rate. The interest income is recognized over the life of
the bond, and any premium is amortized accordingly.
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88
Notes to the financial statements
23 Share capital
GROUP & PARENT
2023 2022
Number
of shares
EUR ’000
Nominal
value
Number
of shares
EUR ’000
Nominal
value
The share capital consists of:
Ordinary shares 510,206 68 510,206 68
Capital increase 0 0 0 0
Ordinary shares at December 31 510,206 68 510,206 68
No shares carry any special rights.
EUR per share 2023 2022
Total dividend paid out for the year 374.4 31.6
Total dividend proposed for the year 0 0
The dividend distributed has no tax implications for the Group
or the Parent Company. All covenants are also complied with.
Capital management
The capital structure is managed by MFT Energy A/S and cov-
ers 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 abil-
ity to continue as a going concern and to provide sufficient
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 of
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 condi-
tions. This will primarily be achieved through the consolidation
of future results. The solvency ratio at December 31, 2023
amounted to 52.8% (December 31, 2022: 53.1%).
§
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.
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 recog-
nition in profit or loss.
Reserve for loans to shareholders
The reserve for loans issued to shareholders for the pur-
chase of shares in connection with the share purchase pro-
grams is mandatory according to the section on legal
shareholder loans of 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
recognized in other comprehensive income and accumu-
lated in a separate reserve within equity. The cumulative
amount is reclassified to profit or loss when the net invest-
ment 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 cove-
nants.
Non-controlling interests
Equity attributable to non-controlling interests is recog-
nized as a separate item within consolidated equity. Trans-
actions 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.
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MFT Energy A/S - Annual report 2023
89
Notes to the financial statements
24 Provisions 25 Cash flow specifications
GROUP & PARENT
EUR ’000
Onerous
contracts Total
Provisions at January 1, 2023 20,000 20,000
Additions for the year 8,405 8,405
Utilized amounts (11,595) (11,595)
Reversal of provisions made in previous years (8,405) (8,405)
Provisions at December 31, 2023 8,405 8,405
Current/non-current classification:
Non-current provisions 2,680 2,680
Current provisions 5,725 5,725
Provisions at December 31, 2023 8,405 8,405
Provisions consist of onerous contracts with delivery from
2024 to 2025 and comprise contracts for which the unavoid-
able costs related to purchase of commodities exceed the
economic benefits of such commodities. The estimates per-
formed for the above provisions are explained in note 2.
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Adjustments
Financial income (9,923) (1,577) (9,529) (1,520)
Financial expenses 13,218 4,642 12,187 6,344
Depreciation, amortization and impairment charges 569 219 285 211
Income from investments in subsidiaries 0 0 (36,485) (269,126)
Share-based remuneration (92) 141 (92) 141
Income tax 16,495 126,392 283 (2,420)
Other adjustments 6 (12) (93) (657)
20,273 129,805 (33,328) (267,027)
Changes in net working capital
Change in inventories 2,078 (22,300) 2,078 (22,300)
Change in trade receivables 16,202 (12,309) 13,969 (8,250)
Change in derivatives as an asset 12,285 178,347 12,152 178,582
Change in other operating assets 178,455 (118,612) 184,097 (116,026)
Change in trade payables (19,520) 4,370 (20,342) 4,372
Change in derivatives as a liability (58,920) (158,684) (59,086) (158,703)
Change in other operating liabilities (43,037) 47,654 (14,613) 22,685
87,543 (81,534) 118,255 (99,640)
§
Accounting policies
Provisions
Provisions are recognized when, due to an event occur-
ring 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 settle-
ment of the relevant obligation and are discounted if
deemed material.
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MFT Energy A/S - Annual report 2023
90
Notes to the financial statements
25 Cash flow specifications (continued)
GROUP PARENT
EUR ’000 Borrowings Leases Total Borrowings Leases
Payables
to group
enterprises Total
Net debt:
At January 1, 2022 7,442 158 7,600 7,442 158 87,108 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
Cash flows (5,611) (581) (6,192) (5,611) (285) 0 (5,896)
Additions without cash effect 0 2,003 2,003 0 882 (428,315) (427,433)
At December 31, 2023 0 1,469 1,469 0 644 215,697 216,341
Net debt reconciliation
This section sets out an analysis of net debt and the move-
ments in net debt for each of the periods presented.
§
Accounting policies
Statement of cash flows
The cash flow statement shows the Group’s cash flows for
the year broken down by operating, investing and financing
activities, changes for the year in cash and cash equiva-
lents 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 impair-
ment losses. Working capital comprises current assets less
short-term debt, excluding items included in cash and cash
equivalents.
Cash flows from investing activities comprise cash flows
from acquisitions and disposals of intangible assets, prop-
erty, plant and equipment as well as fixed asset invest-
ments.
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.
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MFT Energy A/S - Annual report 2023
91
Notes to the financial statements
26 Contingent liabilities, commitments and contingencies
Contingent liabilities
GROUP & PARENT
EUR ’000 2023 2022
Charges and security
The following assets have been provided as security to the main bank facilities:
Security comprising simple claims 4,294 4,303
Pledged assets 6,190 153,111
Total charges and security 10,484 157,414
Charges and security
The Parent Company has provided all its trade receivables as
security for all outstanding amounts related to its main bank
facility. The pledged assets consist of two elements as MFT
Energy A/S has provided some cash accounts and government
bond portfolios as security for guarantee facilities with its
main bank facilities. The present value of the security is EUR
6,190k.
The Parent Company 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 agree-
ment terminates in September 2025. On December 31, 2023
this equity amounted to EUR 6,464k.
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Rental and lease obligations
MFT Energy has the following lease obligations under
operating leases. Total future lease payments are:
Within 1 year 15 86 14 5
Between 1 and 5 years 0 3 0 0
15 89 14 5
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 administration 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 adjustments of corporation
taxes and withholding taxes may increase the Company’s lia-
bility.
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.
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MFT Energy A/S - Annual report 2023
92
Notes to the financial statements
27 Related party transactions
Name of entity Type Place of business
MFT Energy Holding ApS Ultimate parent company Denmark
The Group is controlled by the following entity:
Related parties are defined as parties with control or signifi-
cant influence, including group enterprises. Other related par-
ties 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 influence, joint
control or control.
Transactions with members of the Board of Directors and the
Executive Board are disclosed in the table for key management
personnel.
Information about remuneration to key management personnel
has been disclosed in note 6.
Investments in subsidiaries are set out in note 14.
Transactions with other related parties
GROUP PARENT
EUR ’000 2023 2022 2023 2022
The following transactions occurred with related parties:
MFT Energy Holding ApS
Proceeds from group enterprises (8,554) (1,535) (8,554) (1,535)
Dividend payments to MFT Energy Holding ApS 190,941 15,806 190,941 15,806
Other related parties*
Purchase of services 230 36 230 36
Financial expenses 13 101 13 101
Proceeds from loans with other related parties 153 (1,438) 153 (1,438)
* Other related parties comprise Rathjen Invest ApS, VORUP INVEST ApS, NOAK Holding ApS, BRAA INVEST A/S, NORDAL CLAUSEN HOLDING ApS,
Tore Invest ApS, Hviid Østergaard ApS, Forsom Invest ApS, SP50 Invest ApS, Ates Invest ApS and Amiki Group.
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MFT Energy A/S - Annual report 2023
93
Notes to the financial statements
27 Related party transactions (continued)
GROUP PARENT
EUR ’000 2023 2022 2023 2022
Key management personnel
Purchase of services 61 129 61 129
Proceeds from loans in connection with share purchase
programs 0 (54) 0 (54)
Group enterprises
Income statement
Sale of services 14,642 6,921
Purchase of services 72,483 635,103
Financial expenses 4,596 2,827
Balance sheet
Trade receivables 10,354 9,076
Loans obtained from group enterprises (428,315) 556,904
Trade payables 2,412 3,379
Dividend paid 191,000 16,121
Dividend received 204,675 21,499
28 Fee to auditors appointed at the annual general meeting
29 Subsequent events
GROUP PARENT
EUR ’000 2023 2022 2023 2022
PricewaterhouseCoopers
Audit fee 232 64 54 43
Other assurance services 7 5 7 5
Tax advisory services 68 40 46 40
Other services 299 179 285 164
606 288 392 252
No events have occurred since the balance sheet date which
could materially impact the Group’s or the Parent Company’s
financial position.
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MFT Energy A/S - Annual report 2023
94
Notes to the financial statements
30 Definitions of financial ratios
The financial ratios have been calculated in accordance with
the recommendations of CFA Society Denmark.
Scalability = Earnings before interest and tax (EBIT) x 100
Net trading income (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
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
95
Notes to the financial statements
Executive Board
Board of Directors
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
97
Independent auditor’s report
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
98
CVR No 33 77 12 31
mne35811
Management’s review Business and strategy ESG Corporate mattersPerformance StatementsFinancial statements
MFT Energy A/S - Annual report 2023
99
DK-8000 Aarhus
CVR No 38 17 51 30
Phone: +45 4445 4600
Mail: info@mft-energy.com