Annual report 2023
The Annual Report was presented and
adopted at the Annual General Meeting
of the Company on May 6, 2024.
Chairman of the General Meeting
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Annual Report 2023
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Contents
Financial highlights and key ratios...................................................................................................................... 4
Management’s statement on the annual report ............................................................................................ 13
Independent auditor’s report................................................................................................................................ 14
Consolidated financial statement
Income statement ..................................................................................................................................................... 17
Statement of comprehensive income ................................................................................................................ 18
Balance sheet ............................................................................................................................................................. 19
Statement of cash flows ........................................................................................................................................ 21
Statement of changes in equity .......................................................................................................................... 22
Notes to the consolidated financial statements
Note 1 – Basis of preparation ............................................................................................................................... 23
Note 2 – Critical accounting estimates and judgments ............................................................................. 25
Note 3 – Impact of new accounting standards ............................................................................................. 26
Note 4 – Net trading income................................................................................................................................ 27
Note 5 – Financial risk management ................................................................................................................. 27
Note 6 – Staff costs ................................................................................................................................................ 32
Note 7 – Financial income and expenses ......................................................................................................... 35
Note 8 – Income tax expenses ............................................................................................................................ 36
Note 9 – Intangible assets .................................................................................................................................... 37
Note 10 – Property, plant, and equipment ....................................................................................................... 38
Note 11 – Leases ....................................................................................................................................................... 39
Note 12 – Deferred tax ........................................................................................................................................... 41
Note 13 – Non-controlling interests ................................................................................................................... 42
Note 14 – Inventories .............................................................................................................................................. 44
Note 15 – Trade receivables ................................................................................................................................. 45
Note 16 – Fair value measurement ..................................................................................................................... 45
Note 17 – Financial assets and financial liabilities ........................................................................................ 49
Note 18 – Offsetting financial assets and financial liabilities .................................................................. 50
Note 19 – Other Receivables ................................................................................................................................ 52
Note 20 – Current asset investments ............................................................................................................... 52
Note 21 – Share capital .......................................................................................................................................... 53
Note 22 – Provisions ................................................................................................................................................ 54
Note 23 – Cash flow specifications ................................................................................................................. 55
Note 24 – Contingent liabilities, commitments, and contingencies .......................................................56
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Note 25 – Related party transactions ............................................................................................................... 57
Note 26 – Fee to auditors appointed at the annual general meeting .................................................. 58
Note 27 – Subsequent events ............................................................................................................................. 58
Note 28 – Definitions of financial ratios .......................................................................................................... 58
Parent company financial statements
Income statement (parent) ...................................................................................................................................59
Balance sheet (parent) ........................................................................................................................................... 60
Statement of changes in equity (parent) ......................................................................................................... 61
Notes to the Parent company financial statements
Note 1 – Staff cost ................................................................................................................................................... 62
Note 2 – Financial income ..................................................................................................................................... 62
Note 3 – Tax on profit/loss for the year .......................................................................................................... 62
Note 4 – Investments in subsidiaries ................................................................................................................ 62
Note 5 – Share capital ............................................................................................................................................ 63
Note 6 – Distribution of profit ............................................................................................................................. 64
Note 7 – Contingent assets, liabilities, and financial obligations ............................................................ 64
Note 8 – Related party transactions ................................................................................................................. 64
Note 9 – Accounting policies (parent) ..............................................................................................................65
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Financial highlights and key ratios
EUR '000 2023 2022 2021 2020 2019*
Income Statement
Net trading income (Gross profit) 101,525 641,864 83,702 13,408 3,877
Profit before financial income and expenses and tax (EBIT) 69,643 576,178 65,376 7,813 2,221
Net financials -2,137 -3,065 -1,647 -740 -256
Profit before tax (EBT) 67,505 573,113 63,729 7,073 1,965
Profit for the year 50,764 446,725 49,823 5,523 1,525
Profit for the year attributable to
- Shareholders in MFT Energy Holding ApS 35,265 254,998 33,813 4,702 1,442
- Non-controlling interests 15,499 191,727 16,010 821 83
Balance Sheet
Balance sheet total 430,724 910,012 481,095 41,557 11,043
Equity 252,467 482,790 61,162 9,420 3,925
Equity attributable to
- Shareholders in MFT Energy Holding ApS 179,371 288,517 43,865 8,331 3,789
- Non-controlling interest 73,096 194,273 17,297 1,089 136
Current asset investments 64,416 348,888 0 0 0
Cash and cash equivalents 150,393 134,741 34,517 12,624 3,382
Cash flows
Cash flows from operating activities 18,075 476,454 22,494 5,177 -2,705
Cash flows from investing activities 284,093 -349,074 -977 -280 -140
- hereof investments in intangible assets 0 0 0 0 76
- hereof investments in property, plant and equipment 257 115 60 82 62
Cash flows from financing activities -286,516 -27,156 376 5,707 1,794
Change in cash and cash equivalents for the year 15,652 100,224 21,893 10,604 -1,051
Key ratios
Scalability 68.6% 89.8% 78.1% 58.3% 57.3%
Equity ratio 58.6% 53.1% 12.7% 22.7% 35.5%
Return on equity 13.8% 164.3% 141.2% 82.8% 48.7%
Environme ntal, s ocial and governance data
Number of employees - average for the year 136 94 70 34 22
Total number of FTE´s 155 130 87 55 28
Employee turnover, %** 14.8% 9.8% - - -
Gender among executive leaders (male/female), %** 93% / 7% 92% / 8% - - -
Total CO2 emissions** 6,201 5,511 - - -
Total CO2 emissions per FTE** 45.6 58.6 - - -
For a definition of financial key figures and ratios, please refer to note 28.
**MFT Energy startede measure the parameters in 2022, while there are no data on previously periods.
*The implementation of IFRS as from 1 January 2020 had an impact on the financial statements and key ratios for 2020 and
onwards. Comparative figures for 2019 have not been restated and is in accordance with Danish GAAP.
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Management’s review
Key activities
The principal activities of the Group is trading with commodities.
Development in the year
The income statement of the Group for 2023 shows a profit of EUR 50,764k and at December 31, 2023 the balance sheet
of the Group shows an equity of EUR 252,467k.
The past year and follow-up on development expectations from last year
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
markets 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 69.6m
achieved in 2023, despite expectations of EUR 150m to EUR 300m. The outlook was prepared based on assumptions of
more volatility, but the conditions in the energy 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
opportunities, which were significantly fewer than in the preceding year, 2022.
Key Risk Categories
MFT Energy is exposed to a range of risk factors, which are assessed on probability of occurrence and potential damage,
followed by appropriate risk mitigation measures based on MFT Energy’s risk tolerance.
1. Market risk
2. Liquidity risk
3. Credit risk
4. Currency risk
5. Organizational risk
6. Operational and IT risk
7. Regulatory rist
Market risk
MFT Energy is exposed to price changes in the power and gas markets. MFT Energy defines market risk as the risk that
the value of a position changes because of changing market prices. Volatility is driven by constant changes in supply and
demand in the power and gas markets, as well as changes in foreign exchange rates and other economic or political
factors.
Mitigation and actions:
•
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 defense, 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 mandates against both risk strategy and market conditions.
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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 commitments
Mitigation and actions:
•
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 available 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.
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.
Mitigation and actions:
•
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 counterparties 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.
Currency risk
Currency risk is the risk of financial loss due to fluctuations in exchange 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 t he
functional currency.
Mitigation and actions:
•
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.
Organizational risk
Organizational risk relates to the risk of losing expertise and key employees or not being able to attract employees with
the necessary expertise.
Mitigation and actions:
•
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.
Operational and IT risk
Operational risk relates to the risk of financial losses because of system or human errors, including insufficient internal
procedures.
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Mitigation and actions:
•
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.
Regulatory risk
Energy markets are highly regulated and subject to ongoing regulatory 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.
Mitigation and actions:
•
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 provisions under MiFID II. These regulations set out rules on market abuse, transaction reporting,
and risk mitigation.
•
MFT Energy’s trading operations outside the EU are subject to regulations that cover comparable domains, and MFT
Energy’s compliance 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.
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1
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
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Statement on gender composition, cf. section 99b of the Financial Statements Act
The Board of Directors consist of 4 males. Our target is to have minimum 1 female member of the board and at least 25%
females in the board of directors by 2027. During the reporting year, there has been a turnover of 1 member in the board
of directors, the management explored the market for potential candidates of the underrepresented gender with the
right competencies, however, it didn’t change the gender composition. We continue to work towards achieving the
target.
2023
Top management
Total number of members 4
Underrepresented gender % 0
Target figure % 25
Year for meeting target 2027
Other management levels
Total number of members* 1
Underrepresented gender %* 0
*As per Section 139c (1)(ii) and (iii) of the Danish Companies Act.
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Outlook for 2024
Looking ahead, uncertainties will persist in 2024. Geopolitical tension, evolving regulatory landscapes, and the ongoing
transition towards sustainable energy sources continue to pose both challenges and opportunities for MFT Energy.
However, we remain committed to leveraging our strengths, adapting swiftly to changing dynamics, and capitalizing on
emerging trends to drive sustainable growth and deliver value to our stakeholders.
MFT Energy’s strategic priority remains to improve our market position especially outside Europe, and focus is on growing
our traded volumes in all markets and products.
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 uncertainties that could generate different results for MFT Energy from what has been expressed or
implied above.
Subsequent events
No events have occurred since the balance sheet date which could materially affect MFT Energy’s financial position.
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Executive Board
Board of Directors
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CVR No 33 77 12 31
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Income statement
for the year ended December 31, 2023
EUR '000 Notes 2023 2022
Net trading income 4 101,525 641,864
Other external expenses -11,149 -7,113
Staff costs 6 -20,164 -58,354
Depreciation, amortization and impairment losses -569 -219
Operating profit before financial income and expenses
and tax (EBIT) 69,643 576,178
Financial income 7 10,551 1,578
Financial expenses 7 -12,689 -4,643
Profit before tax (EBT) 67,505 573,113
Tax on profit for the year 8 -16,741 -126,388
Profit for the year 50,764 446,725
Profit for the period attributable to:
Shareholders of MFT Energy Holding ApS 35,265 254,998
Non-controlling interests 15,499 191,727
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Statement of comprehensive income
for the year ended December 31, 2023
EUR '000 Notes 2023 2022
Profit for the year 50,764 446,725
Other comprehensive income
Items that may be reclassified to profit or loss
Value adjustment of cash flow hedges for the year 0 -1,914
Value adjustment of cash flow hedges reclassified to profit or loss 0 686
Income tax relating to these items 0 270
Exchange differences on translation of foreign operations -4 11
Other comprehensive income for the period, net of tax -4 -947
Total comprehensive income for the period 50,760 445,778
Total comprehensive income for the period attributable to:
Shareholders of MFT Energy Holding ApS 35,261 254,070
Non-controlling interests 15,499 191,708
Extraordinary dividend after year end 0 142,539
Total extraordinary dividend after year end per share in EUR 0 2,028
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Balance sheet
at December 31, 2023
EUR '000 Notes 20 23 2022
As s e ts
No n -curr e n t a s s e ts
Intangible asse ts 9 36 40
Property, plant and equipment 10 285 135
Right-of-use assets 11 1,447 45
Deferred tax assets 12 1,897 4,447
Deposits 422 300
Other receivables 2,056 1,439
To ta l no n - curre nt a s s e ts
Curre nt a s s e ts
Inventories 14 30,942 33,020
Trade receivables 15 17,144 33,346
Derivatives 16, 17 142,733 155,018
Prepayments 1,343 593
Other receivables 19 17,610 198,000
Curre nt asset investments 20 64,416 348,888
Cash and cash equivalents 150,393 134,741
To ta l curre nt as s e ts 424,581 903,606
To ta l as s e ts 430,724 910,012
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Balance sheet
at December 31, 2023
EUR '000 Notes 20 23 2022
Equity
Share capital 21 10 10
Rese rves and retained earnings 179,361 288,507
Equity attributable to MFT Energy Holding ApS's shareholders 179,371 288,517
Equity attributable to non-controlling intere sts 73,096 194,273
To ta l e quity 252,467 482,790
Liab ilitie s
No n - curr e nt l iab ilitie s
Borrowings 17 0 4,603
Lease liabilities 11 840 0
Provisions 22 5,725 8,405
To ta l no n- curre nt liab il itie s 6,565 13,008
Curre nt l ia b ilitie s
Borrowings 17 0 1,008
Lease liabilities 11 629 47
Trade payables 35,496 55,023
Derivatives 16, 17 120,108 179,028
Corporate tax liabilities 6,682 129,974
Provisions 22 2,680 11,595
Other liabilities 6,097 37,539
To ta l curre nt lia b il itie s 171,692 414,214
To ta l liab ilitie s 178,257 427,222
To ta l liab ilitie s a n d e qu ity 430,724 910,012
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Statement of cash flows
for the year ended December 31, 2023
EUR '000 Notes 2023 2022
Cash flows from operating activities
Net profit for the year 50,764 446,725
Adjustments 23 18,582 129,806
Changes in net working capital 23 88,104 -82,190
Cash flows from operating activities
before financial income and expenses 157,450 494,341
Interest received 10,551 1,578
Interest paid -12,689 -4,643
Income taxes paid -137,237 -14,822
Net cash flow from operating activities 18,075 476,454
Cash flows from investing activities
Payments for property, plant and equipment
10 -257 -122
Current asset investments, purchases -377,798 -348,888
Current asset investments, sales 662,270 0
Payment of deposits -122 -64
Net cash flow from investing activities 284,093 -349,074
Cash flows from financing activities
Proceeds from borrowings 17 -5,611 -1,831
Principal elements of lease payments 11 -444 -67
Dividends paid to shareholders -143,941 -15,805
Dividends paid to non-controlling interests -136,520 -9,453
Net cash flow from financing activities -286,516 -27,156
Change in cash and cash equivalents 15,652 100,224
Cash and cash equivalents at January 1 134,741 34,517
Cash and cash equivalents at December 31 150,393 134,741
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Statement of changes in equity
for the year ended December 31, 2023
EUR '000
Share capital
Share premium
account
Hedging reserve
Foreign currency
translation
differences
Retained
earnings
Equity
attributable to
owners of the
parent company
Non-controlling
interests
Total equity
At January 1, 2022 10 0 939 0 42,916 43,865 17,297 61,162
Profit for the period 0 0 0 0 254,998 254,998 191,727 446,725
Other comprehensive income 0 0 -939 11 0 -928 -19 -947
Total comprehensive income 0 0 -939 11 254,998 254,070 191,708 445,778
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 0 -15,805 -15,805 -9,453 -25,258
Share-based payments 0 0 0 0 138 138 3 141
Capital increase 0 5,903 0 0 0 5,903 0 5,903
Transfer 0 -5,903 0 0 5,903 0 0 0
Other equity movements 0 0 0 0 346 346 -5,282 -4,936
At December 31, 2022 10 0 0 11 288,496 288,517 194,273 482,790
At January 1, 2023 10 0 0 11 288,496 288,517 194,273 482,790
Profit for the period 0 0 0 0 35,265 35,265 15,499 50,764
Other comprehensive income 0 0 0 -4 0 -4 0 -4
Total comprehensive income 0 0 0 -4 35,265 35,261 15,499 50,760
Transactions with owners in their capacity as owners
Extraordinary dividend paid 0 0 0 0 -143,941 -143,941 -136,520 -280,461
Share-based payments 0 0 0 0 -92 -92 0 -92
Other equity movements 0 0 0 0 -374 -374 -156 -530
At December 31, 2023 10 0 0 7 179,354 179,371 73,096 252,467
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Note 1 – Basis of preparation
The consolidated financial statements of MFT Energy Holding ApS (‘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 Management on May 6, 2024.
The material 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 consisting of MFT Energy Holding ApS and its subsidiaries while
the separate financial statements cover MFT Energy Holding ApS.
Basis of preparation
The consolidated financial statements of the Group and the separate financial statements have been prepared in
accordance 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
liabilities, which are measured at fair value:
•
Contracts for sale and purchase of gas, power and capacities not entered into for the Group’s own use
•
Derivative financial instruments
The consolidated financial statements and the separate financial statements are presented in Euro (EUR) and all values
are rounded to the nearest thousands, except when otherwise indicated.
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
consideration from the physical delivery of gas and power under standardized fixed-price contracts and the sale and
purchase of gas at a number of gas trading hubs and related capacity contracts. Revenue from gas and power contracts,
which resulted in physical delivery, was recognized upon delivery at the contractually stated fixed price adjusted for the
fair value of the contract immediately before delivery.
In 2023, the principles for recognition of gains and losses arising from trading with energy commodity derivatives,
including futures, options, swaps and certain forward sales and purchases, 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 standard 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 exemption. Therefore, management deems it more appropriate to present net trading income instead of gross
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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. The comparative amounts for the Group in
terms of revenue EUR 7,875,685k, fair value adjustment of financial and physical energy contracts 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.
Principles of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity where the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated.
Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income
statement of profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet,
respectively.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements and
the separate financial statements are presented in Euro (EUR), which is the functional and presentation currency of the
Group.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the
translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates, are
recognized in profit or loss. The results and financial position of foreign operations that have a functional currency
different from Euro are translated into Euro as follows:
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the
balance sheet
•
income and expenses for each statement of profit or loss and statement of comprehensive income are trans-
lated at average exchange rates, and
•
all resulting exchange differences are recognized in other comprehensive income.
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On consolidation, exchange differences arising from the translation of any net investment in foreign entities are
recognized in other comprehensive income. When a foreign operation is sold, the associated exchange differences are
reclassified to profit or loss, as part of the gain or loss on sale.
Other external expenses
Other external expenses comprise expenses related to premises, 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 acquisitions, insurance premiums, subscriptions and interest.
Note 2 – Critical accounting estimates and judg-
ments
The preparation of MFT Energy Holding ApS’s consolidated and separate financial statements requires the use of
accounting estimates 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 change are not expected to
have an impact on critical accounting estimates or judgments.
Estimates and judgments
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
contracts 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 pricing relationships. The use of alternative estimates or valuation methodologies may result in significantly
different values for such derivatives.
Impact from
Estimate/ estimate and
Critical accounting estimates and judgements judgement judgements
Valuation of derivatives Estimate Mode rate
Onerous contracts Estimate Low
MFT Energy Holding ApS
Annual Report 2023
26
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 abovementioned 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
subsequent development in the market.
The estimates are based on the future spreads between the given market areas, which may result in different values for
these derivatives. Please refer to note 16 a for more detailed description and a display of the fair value hierarchy
Note 3 – Impact of new accounting standards
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 January 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.
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.
MFT Energy Holding ApS
Annual Report 2023
27
Note 4 – Net trading income
EUR '000 2023 20 22
Net trading income from energy commodities 101,525 641,864
101,5 25 6 41,86 4
Accounting policies
Net trading income
MFT Energy routinely enters into sale and purchase trans-actions for physical delivery of energy commodities. All trans-
actions for physical delivery of a non-financial item are considered within the scope of IFRS 9 due to the fact that the
Group has a practice of entering into offsetting contracts before the delivery date. Consequently, they are measured at
fair value on initial recognition and subsequently measured at fair value through profit and loss.
For contracts whose fair value cannot be determined solely based on observable market data, any difference between
the transaction price and transaction date fair value determined 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 physical delivery of energy commodities takes the form of contracts
that were entered into and continue to be held for the purpose of receipt or delivery of the physical commodity in ac-
cordance 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 con-
tracts 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 Financial instruments.
Given the nature of MFT Energy’s business model and the standard contracts with counterparts, all gains and losses aris-
ing from trading with energy commodity derivatives are accounted for using IFRS 9 Financial instruments.
Note 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 overall 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
organized 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 Committee 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 assessed by the
Risk and Audit Committee before being granted final approval by the Board of Directors.
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 monitors, identifies, performs stress tests, and evaluates risk
MFT Energy Holding ApS
Annual Report 2023
28
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 trading 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 deposits, etc. The market risk framework is designed to
systematically 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 in the Group to reflect the different exposures 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 o f 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 change. The
percentage 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
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
Impact on profit or loss before
tax
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 equivalent to the value of profit or loss after tax.
MFT Energy Holding ApS
Annual Report 2023
29
The Group is actively using forward contracts to hedge positions and mitigate market risk related to long positions. All
hedge positions are in accordance with the written principles approved by the Risk Committee. The commodity price risk
related to gas inventory is hedged using forward contracts. MFT Energy applies hedge accounting to fair value hedges on
inventory. Any ineffectiveness of a hedge position is recognized 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 the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. MFT Energy's exposure to foreign currency risk is derived from the Group's trading activities in
which trade receivables, trade payables, and derivatives are denominated in a currency other than the functional
currency.
MFT Energy manages its risk related 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
collaboration 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
currency exposure that is considered material. The functional currency 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.
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 interest rates is considered low.
Monetary items and sensitivity of the Group
EUR '000
Cash and
receivables
Potential
volatility of
exchange
rate*
Impact on
profit or
loss before
tax
Cash and
receivables
Potential
volatility of
exchange
rate*
Impact on
profit or
loss before
tax
DKK/EUR 1,351 1% 13 3,016 1% 30
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.
2023
2022
MFT Energy Holding ApS
Annual Report 2023
30
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit
exposures from counterparties, including outstanding receivables.
The credit risk is managed on a consolidated basis and monitored by the risk team in accordance with the written
principles and policies of MFT Energy. The risk team monitors the credit risk daily and is actively optimizing bank
collaterals and bank guaranties made to counterparties in close collaboration with the treasury and finance teams.
MFT Energy makes numerous trades with commodity exchanges that are generally settled at fair value on a daily basis.
The leadership considers its credit risk exposure to commodity exchanges to be insignificant due to the daily settlement.
The trades entered into are in general performed under standard agreements that allow netting statements. These
agreements are mitigating the credit risk of the Group.
Please refer to note 18 for detailed information about offsetting of financial assets and liabilities.
Trade receivables
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics
and the days past due. No loss allowances were made in 2023 and 2022. The Group have never suffered any realized
losses from any counterparties. 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 positions 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 categories 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 counterparts 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 counterparts before trading is commenced.
Credit quality of the Group's counterparties
EUR '000 2023 2022
Minimal risk (A rated) 234,494 711,765
Low risk (B rated) 2,200 2,200
High risk (C rated) 28 37
Not rated 7,237 22,689
Total 243,959 736,691
MFT Energy Holding ApS
Annual Report 2023
31
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 adequate liquidity reserves at any time
through a combination of readily available cash and committed credit facilities. The available cash is monitored daily to
ensure that the reserves at all times are in accordance with the written principles and policies set by the Board of
Directors.
MFT Energy purchases German government bonds in order to mitigate the risk and ensure interest income from the
excess liquidity. The leadership 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 transactions which, according to their terms, require daily margin
calls. To comply with risk limits, the market risk of such derivatives is reduced through offsetting positions. The terms of
these offsetting positions may not require daily margin calls, or no margin calls at all. Movements in the market 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 contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant.
Contractual maturitie s of financial liabilities
< 1 year 1 - 2 year 2 - 5 ye ar > 5 years
Total
contractual
cash flows
Carrying
amount
At December 31, 2023
Trade payables 35,496 0 0 0 35,496 35,496
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
16 5 ,0 10 6 ,3 24 241 0 17 1,5 7 5 171,5 75
At December 31, 2022
Trade payables 55,023 0 0 0 55,023 55,023
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
29 6 ,226 7 ,022 6 ,482 147 3 09 ,87 7 3 0 8,85 6
EUR '000
MFT Energy Holding ApS
Annual Report 2023
32
Note 6 – Staff costs
Wages and salaries, pension contributions and other social security costs are considered to be short-term employee ben-
efits.
Key management personnel compensation
Key management personnel consists of the Executive Leadership and the Board of Directors. The compensation paid or
payable to key management personnel for employee services is shown below:
Share-based payments
Warrant program
MFT Energy has established a warrant program in order to motivate and retain certain key employees. In December 2023,
1,797 warrants were granted under the program (December 2022: 475). The warrants granted in 2023 are exercisable
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 authorizations 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 sharehold-
ers, the Group’s guidelines for incentive pay, an assessment of expectations of the recipient’s work efforts and contribu-
tion to the Group’s growth, as well as the need to motivate and retain the recipient. The grant is made on the establish-
ment 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.
EUR '000 2023 2022
Wages and salaries 19,854 57,000
Share-based payments -92 141
Pension cost, defined contribution plans 288 281
Other social security costs 114 932
20,16 4 5 8,3 5 4
Average number of employees 136 94
EUR '000 20 23 2022
Wages and salaries 702 4.936
Pension contribution 17 24
Other social security costs 6 14
To ta l co mp e ns a tio n ke y m an a g e m e n t p e rs o nn e l 725 4.9 7 4
Wages and salaries 280 270
Pension contribution 4 2
284 272
Exe cutive B o ar d
MFT Energy Holding ApS
Annual Report 2023
33
In 2023, the fair value of warrants recognized in the income statement amounted to EUR 51k (2022: EUR 57k). No key
management personnel is included in the warrant program. The employees that have been given warrants have the option
of buying the predefined number of shares at a predefined value. The value 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 of Directors has been a
board member for 12 months, the warrants will be granted. The key terms of the program are the same as for the employ-
ees. In December 2023, 357 warrants were granted under the program (December 2022: 0).
2023
Number of shares
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
2022
Number of shares
Board of
Directors
Employees
0 2,039
0 475
0 -
0 2,514
Outstanding at the beginning of the period Granted during the
period
Forfeited during the period
Outstanding at the end of the period
Weighted-average remaining contractual life
None of the warrants are exercisable at the end of the period.
- 5 years
GROUP
GROUP
Share purchase program
In 2021, MFT Energy 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
n
ature of the program exhibits the characteristics of an option.
The fair value of the share purchase programs has been determined based on a Black-Scholes option pricing model. The
data input for the pricing model was based on historical share prices of a peer group with the same vesting period.
In 2023, the total fair value of employee share purchase programs 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).
MFT Energy Holding ApS
Annual Report 2023
34
2023
Key management
Other
employees
Total
Outstanding at the beginning of the period
5,103 10,206 15,309
Forfeited during the period -5,103 -10,206 -15,309
Outstanding at the end of the period 0 0 0
Weighted-average remaining contractual life 0 0 0
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
Number of shares
Number of shares
Accounting policies
Staff costs
Staff costs comprise direct wages and salaries, pension contributions, social security contributions, sick leave, and bo-
nuses, 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 administered
pension insurance plans on a mandatory, contractual or voluntary basis. MFT Energy has no further payment obligations
once the contributions have been paid. The contributions are recognized as employee benefits expenses when they are
due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in the future pay-
ments 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 ex ercise date. The grant
date fair value is recognized as a compensation expense over the vesting period with a corresponding entry in equity.
At the end of each period, MFT Energy revises its estimates of the number of warrants that are expected to vest based
on service conditions. Adjustments, if any, are recognized in profit or loss, with a corresponding adjustment of equity.
Share purchase programs
A number of employees have been granted the option to purchase a fixed number of shares in MFT Energy A/S . The pur-
chase 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 arrangement due to the non-recourse financing from MFT Energy A/S. Conse-
quently, the arrangement is accounted for as an employee warrant program.
MFT Energy Holding ApS
Annual Report 2023
35
Note 7 – Financial income and expenses
Accounting policies
Financial income and expenses
Financial income and expenses comprise interest income and interest expenses, realized and unrealized exchange rate
adjustments, fair value adjustment of current asset investments as well as interest on extra payments and repayment
under the on-account taxation scheme and interest in respect of lease liabilities.
Other financial income primarily comprises realized gains on exchange forward derivatives as well as interest income.
Other financial expenses primarily comprise realized and unrealized exchange rate adjustments as well as interest ex-
penses and realized losses on exchange forward derivatives.
EUR '000 2023 2022
Financial income
Interest income, banks 2,226 65
Financial income, bonds 6,886 951
Financial income, other 1,440 259
Gains on exchange forward derivatives 0 303
Total financial income 10,551 1,578
Financial expenses
Interest on borrowings 109 429
Interest on lease liabilities 39 2
Total intere s t expe nse related to financial liab ilities
not at fair value through profit or los s 148 431
Interest expense, income tax
6,265 0
Financial expenses, guarantees 1,983 1,117
Financial expenses, bonds 1,561 471
Financial expenses, other 1,336 852
Foreign exchange rate losses
1,238 1,772
Loss on exchange forward derivatives 158 0
Total financial expenses 12,689 4,643
MFT Energy Holding ApS
Annual Report 2023
36
Note 8 – Income tax expenses
EUR '000 2023 2022
Current tax
Current tax on profit for the year 14,190 130,821
Deferred income tax 2,551 -4,433
Income tax expense 16,741 126,388
EUR '000 2023 2022
Reconciliation of effective tax rate
Tax at the Danish tax rate of 22% (2022: 22%) 14,846 126,084
Tax effects of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible expenses 2,030 81
Other adjustments -135 223
Income tax expense 16,741 126,388
Effective tax rate 25% 22%
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. 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 subsidi-
aries generate taxable income. The leadership periodically evaluates positions taken in tax returns with respect to situa-
tions in which applicable tax regulation 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 uncer-
tainty.
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 de-
ferred income tax liability is settled.
MFT Energy Holding ApS
Annual Report 2023
37
Note 9 – Intangible assets
Software
Software comprises the cost associated with acquiring software licenses.
Incorporeal rights
Incorporeal rights comprise the cost associated with acquiring the rights for trading on exchanges.
Accounting policies
Intangible assets
Intangible assets are measured at cost less accumulated amortization and less any accumulated impairment losses. Cost
comprises the cost of acquisition and expenses directly related to the acquisition up until the time when the 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
EUR '000 Software Total
Cost:
At January 1, 2023 71 6 77
At D e ce mb e r 3 1, 20 23
71 6 77
Accumulated amortization a nd impairment losses:
At January 1, 2023 31 6 37
Amortization charge 4 0 4
At D e ce mb e r 3 1, 20 23
35 6 41
Carrying am o unt a t D e ce mb e r 3 1, 20 23 36 0 36
Cost:
At January 1, 2022 71 6 77
At D e ce mb e r 3 1, 20 22
71 6 77
Accumulated amortization a nd impairment losses:
At January 1, 2022 29 5 34
Amortization charge 2 1 3
At D e ce mb e r 3 1, 20 22
31 6 37
Carrying am o unt a t D e ce mb e r 3 1, 20 22 40 0 40
Incorpore al
rights
MFT Energy Holding ApS
Annual Report 2023
38
Note 10 – Property, plant, and equipment
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.
EUR '000
Other fixtures,
fittings and
equipment
Lease hold
improvements
Total
Cost:
At January 1, 2023 161 69 230
Additions 209 48 257
At D e ce m b e r 3 1, 20 23
370 117 487
Accumula ted deprecia tion and impa irment losses:
At January 1, 2023 64 31 95
Depreciation charge 89 18 107
At D e ce m b e r 3 1, 20 23
153 49 202
Carr ying a m o unt at D e ce mb e r 3 1, 2023 217 68 285
Cost:
At January 1, 2022 50 58 108
Additions 111 11 122
At D e ce m b e r 3 1, 20 22
161 69 230
Accumula ted deprecia tion and impa irment losses:
At January 1, 2022 29 21 50
Depreciation charge 35 10 45
At D e ce m b e r 3 1, 20 22
64 31 95
Carr ying a m o unt at D e ce mb e r 3 1, 2022 97 38 13 5
MFT Energy Holding ApS
Annual Report 2023
39
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit
or loss.
Depreciation methods and useful lives
Depreciation is calculated using the straight-line method to allocate the cost of the assets, net of their residual values,
over their estimated useful lives as follows:
Leasehold improvements 3-5 years
Other fixtures, fittings and equipment 3-5 years
Impairment of assets
Other non-current assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of
disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately iden-
tifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-gen-
erating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
Note 11 – Leases
EUR '000 2023 20 22
Am o u n ts re co gn iz e d in t he b a la n ce s h e e t
Right-of-use assets
Properties 1,447 45
1,447 45
Additions to the right-of-use asse ts 1,901 0
Lea se lia bilities
Curre nt 629 47
Non-current 840 0
1,46 9 47
MFT Energy Holding ApS
Annual Report 2023
40
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 measured on a present value basis. Lease liabilities include the net
present value of fixed payments (including in-substance fixed payments); any variable lease payment that is based on an
index or a rate, initially measured using the index or rate at the commencement date and the exercise price of a purchase
option if the Group is reasonably certain 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.
EUR '000 20 23 2022
Am o u n ts re co gn iz e d in t he incom e st a t e m e n t
The income statements shows the following amounts relating to lease s:
Deprecia tion charge of right-of-use a ssets
Properties 464 110
46 4 110
Interest expense on lease liabilities 39 2
Expenses re lating to short-term lease s 61 123
Expenses re lating to le ases of low-value assets 16 48
Total cash outflow for le ases 580 283
Please refe r to note 5 for a disclosure of contractual maturities of the financial liabilities.
MFT Energy Holding ApS
Annual Report 2023
41
Note 12 – Deferred tax
Deferred tax assets and liabilities are offset as they relate to income tax with the same taxation authority and a legal
right exists to set them off.
Accounting policies
Deferred tax
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those
temporary differences and losses.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and
liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabil-
ities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or
directly in equity, respectively.
EUR '000 2023 2022
D e fe rr e d ta x
Deferred tax at the beginning of pe riod -4,447 -14
Deferred tax re cognized in the income statement 2,550 -4,433
D e fe rr e d ta x at ye ar e nd -1,89 7 -4,447
D e fe rr e d ta x re l a te s to :
Property, plant and equipment -13 -10
Deferred tax on accrued expenses -40 -37
Provisions -1,849 -4,400
Lease liabilities 5 0
To ta l -1,89 7 -4,447
Of which pre se nted as defe rred tax assets 1,897 4,447
MFT Energy Holding ApS
Annual Report 2023
42
Note 13 – 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.
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 8.0% 39.9% 40.0% 38.9% 46.2%
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
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
-11 2 -4 1,790 -3
2023
Summarized statement of
comprehensive income
Net increase/(decrease) in cash and cash
equivalents
MFT Energy Holding ApS
Annual Report 2023
43
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 10.3% 39.6% 40.0% 38.6% 45.7%
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
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
10 -3 -5 -3 -7
Net increase/(decrease) in cash and cash
equivalents
Summarized statement of comprehensive
income
2022
MFT Energy Holding ApS
Annual Report 2023
44
Note 14 – Inventories
EUR '000 2023 2022
Gas storage at weighted average cost 40,310 44,629
Adjustment from fair value hedging -9,368 -11,609
Total inventories 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 December 31, 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.
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 ineffectiveness, are included in the line item net trading income from financial and physical energy contracts,
along with the adjustment of the other trades and hedge positions.
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 realizable
value. The net realizable value of inventories is calculated at the amount expected to be generated by sale of the
inventories in the process of normal trading operations less selling expenses.
MFT Energy 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 carrying value
of the inventory. The carrying amount of inventory is recognized in profit or loss when the gas is sold, along with any fair
value adjustments from fair value hedges.
Fair value hedges that qualify for hedge accounting
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or
loss. Changes in the fair value of the hedged item attributable to the hedged risk are recorded as part of the carrying
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.
MFT Energy Holding ApS
Annual Report 2023
45
Note 15 – Trade receivables
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 t he
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 simplified approach
to measuring expected credit losses which uses a lifetime expected loss for all trade receivables.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written down are recognized as a reduction of costs against the same line item.
Note 16 – Fair value measurement
Derivative financial instruments in MFT Energy mainly consist of commodity derivatives that are traded as part of the
Group’s ordinary business activity.
Trading activities are undertaken by using a range of contract types in combination to create incremental gains by
arbitraging prices between markets, locations and time periods. Financial risks relating to the financial instruments are
managed on a portfolio basis.
The Group measures the following financial assets and liabilities at fair value:
•
Gas derivatives
•
Power derivatives
•
Foreign currency derivatives
This section explains estimates made in determining the fair value of the financial instruments that are recognized and
measured at fair value through profit and loss in the financial statements. To provide an indication about the reliability of
the inputs used in determining fair value, the Group has classified its financial instruments into three levels prescribed
under the accounting standards.
Exchange-traded derivatives as well as foreign currency contracts 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.
EUR '000 2023
2022
Trade receivables from contracts 17,144 33,346
Loss allowance 0 0
Ne t trad e r e ce ivab l e s
17,144 3 3 ,3 46
MFT Energy Holding ApS
Annual Report 2023
46
Over-the-counter (OTC) financial swaps and physical commodity sale and purchase contracts including commodity
forwards are generally valued using readily available information in the public markets and, if necessary, quotations
provided by brokers and price index developers. These quotes are corroborated with market data and are 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
valuation models that use market forward levels on standard instruments, 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
modifications of parameters and calculation models, it is MFT Energy's policy to determine fair values based on the
external information 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.
The below table sets out the fair value hierarchy for assets and liabilities measured at fair value in the balance sheet:
Quoted prices
in active
markets
Significant
observable
inputs
Unobser-vable
input
EUR '000 Level 1 Level 2 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
2023
MFT Energy Holding ApS
Annual Report 2023
47
Quoted prices
in active
markets
Significant
observable
inputs
Unobservable
input
EUR '000 Level 1 Level 2 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
2022
Accounting policies
Fair value measurement
The Group measures financial instruments, such as derivatives, at fair value at each balance sheet date. Fair value is the
price that would be received for selling an asset or paid for transferring a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
•
in the principal market for the asset or liability, or
•
in the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their best economic interest.
Commodity contracts which allow for physical settlement, but are considered not entered into for the purpose of the
Group’s own use, are measured similar to financial commodity contracts.
MFT Energy uses valuation techniques that are appropriate in the circumstances and for which sufficient data are avail-
able to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized ac-
cording to the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
•
Level 1 - quoted and unadjusted market prices in active markets for identical assets or liabilities
MFT Energy Holding ApS
Annual Report 2023
48
•
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
subsequently remeasured at fair value at the end of the reporting period. The subsequent accounting treatment depends
on whether the derivatives are designated as hedging instrument and, if so, the nature of the item being hedged. If
derivatives are not designated as hedging instruments, they are classified as “held for trading” for accounting purposes
and initially recognized at fair value with subsequent remeasurement at fair value through profit and loss and recognized
in the balance sheet.
Derivatives may be designated as hedging instruments, and the Group may designate derivatives as either:
•
hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedges), or
•
hedges of a particular risk associated with the cash flow of recognized assets and liabilities and highly probable
forecast transactions (cash flow hedges).
At inception of the hedging relationship, the Group documents the economic relationship between hedging instruments
and hedged items, including whether changes in the cash flow of the hedging instruments are expected to offset
changes in the cash flow of hedged items. The Group documents its risk management objective and strategy for
undertaking its hedging transactions.
The full fair value of a hedging instrument is classified as a non-current asset or liability when the remaining maturity of
the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the
hedged item is less than 12 months.
MFT Energy Holding ApS
Annual Report 2023
49
Note 17 – Financial assets and financial liabilities
The Group hold the following financial instruments:
EUR '000 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
Derivatives in hedge accounting, inventory -9,368 -11,609
142,733 155,018
Financial assets at amortized cost
Deposits 422 300
Trade receivables 17,144 33,346
Other receivables 21,009 198,833
Current asset investments 64,416 348,888
Cash and cash equivalents 150,393 134,741
253,384 716,108
Financial assets 396,117 871,126
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
120,108 179,028
Liabilities at amortized cost
Trade payables
35,496 55,010
Borrowings 0 5,611
Lease liabilities
1,469 47
Corporate tax liabilities
6,682 125,578
Other liabilities
6,097 37,539
49,744 223,785
Financial liabilities 169,852 402,813
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
2023
2022
MFT Energy Holding ApS
Annual Report 2023
50
In terms of borrowings, the fair values are not materially different from their carrying amounts, since the interest pay -
able on those borrowings is either close to current market rates or the borrowings are of a short-term nature.
Accounting policies
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They
are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest
method.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently 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 recognized as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is
capitalized as a prepayment for liquidity services and amortized over the term of the facility to which it relates.
Note 18 – Offsetting financial assets and financial li-
abilities
Offsetting of financial assets and liabilities in the financial statements requires the following criteria to be fulfilled:
•
that the Group currently has a legally enforceable right to set off the recognized amounts, and
•
that the Group intends either to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
In the event that a counterparty or the Group defaults, further offsetting will take place.
This note discloses the offsetting in the financial statements, further netting according to enforceable master netting
agreements and similar agreements (i.e. in the event of default) and collateral provided or received under such agree-
ments.
MFT Energy Holding ApS
Annual Report 2023
51
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
311,049 -275,553 35,496 -7,731 27,765
Derivatives held for trading 333,846 -213,738 120,108 -581 119,527
Total financial liabilities 644,895 -489,291 155,604 -8,312 147,292
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 65,333
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
225,977 -170,954 55,023 -66,667 -11,644
Derivatives held for trading 1,243,009 -1,063,981 179,028 -9,191 169,837
Total financial liabilities 1,468,986 -1,234,935 234,051 -75,858 158,193
Related amounts not set off in
the balance sheet
Related amounts not set off in
the balance sheet
2023
2022
Accounting policies
Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet where the Group
currently has a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
MFT Energy enters into master netting agreements with counterparties to manage the credit risks associated primarily
with over-the-counter commodity trading. These master netting agreements enable MFT Energy and its counterparties to
set off financial liabilities against financial assets in the ordinary course of business as well as in case of default.
Contracts which do not meet the offsetting criteria because the offsetting right is not unconditional are disclosed in the
notes.
MFT Energy Holding ApS
Annual Report 2023
52
Note 19 – Other Receivables
Deposits related to trading are cash amounts that need to be provided to specific counterparties in order to initiate a
trading position and cover margin calls.
Accounting policies
Other receivables consist of deposits related to trading, VAT receivable and miscellaneous receivables. Other receivables
are measured at amortized cost. Deposits represent the amount of cash required for trading positions with certain
counterparties.
Note 20 – Current asset investments
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
Current assets investments
Current asset investments include bonds that are measured at amortized cost, which are recognized initially at fair value
plus any transaction costs incurred. Subsequently, the bonds are measured at amortized cost using the effective interest
method, which takes into account the premium and the expected cash flows over the life of the bonds.
The bonds will be held within a business model where the investment is returned through a repayment of the principal
and interest on the principal amount. The maximum duration of the bonds is 12 months.
Interest income and any amortization of premium are recognized in the income statement using the effective interest
rate. The interest income is recognized over the life of the bond, and any premium is amortized accordingly.
EUR '000 20 23 2022
Deposits related to trading 16,573 197,223
Other receivable s 1,037 777
O th e r r e ce ivab l e s , ne t 17 ,6 10 19 8,00 0
EUR '000 2023 2022
Ge rman governme nt bonds
64,416 348,888
To tal curre nt a s s e t inve s tme nts 6 4,416 3 48,888
MFT Energy Holding ApS
Annual Report 2023
53
Note 21 – Share capital
The dividend distibution has no tax implications for the Group. All covernants are also complied with.
Capital management
The capital structure is managed by MFT Energy A/S and covers the capital used in day-to-day operations throughout
the Group as well as planned capital returns to shareholders.
The capital management objectives are to safeguard the ability to continue as a going concern and to provide 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 conditions. This will primarily be achieved through the
consolidation of future results. The solvency ratio at December 31, 2023 amounted to 58.6% (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 recognition in profit or loss.
Reserve for loans to shareholders
The reserve for loans issued to shareholders for the purchase of shares in connection with the share purchase programs
EUR '000 EUR '000
Number of
shares
Nominal
value
Number of
shares
Nominal
value
Th e s h a re cap ital co ns is ts o f:
Ordinary shares 7,172,450 10 7,172,450 10
Ordinary shares at December 31
7,172,450 10 7,172,450 10
2023 2022
Total dividend paid out for the year 39.1 3.5
Total dividend proposed for the year 0 0
2023
2022
EUR per share
No shares carry any special rights.
MFT Energy Holding ApS
Annual Report 2023
54
is mandatory according to the section for legal shareholder loans in the Danish Companies Act. The reserve may only be
reduced or eliminated by repayment of the issued loans.
Foreign currency translation reserve
Exchange differences arising on translation of the Parent Company and of foreign controlled entities into EUR are rec-
ognized in other comprehensive income and accumulated in a separate reserve within equity. The cumulative amount is
reclassified to profit or loss when the net investment is disposed of.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discre -
tion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Payments of dividends are subject to debt covenants.
Non-controlling interests
Equity attributable to non-controlling interests is recognized as a separate item within consolidated equity. Transactions
with non-controlling interests, including purchases and sales, are treated as equity transactions. Any gain or loss on such
transactions is re-attributed between equity attributable to owners of the Parent Company and non-controlling interests.
Note 22 – Provisions
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
unavoidable costs related to purchase of commodities exceed the economic benefits of such commodities. The estimates
performed for the above provisions are explained in note 2.
Accounting policies
Provisions
Provisions are recognized when, due to an event occurring on or before the reporting date, the Group has a legal or
constructive obligation, and it is probable that the Group will have to give up future economic benefits to meet the
obligation.
MFT Energy Holding ApS
Annual Report 2023
55
Provisions are measured on the basis of Management’s best estimate of the expected expenditure for settlement of the
relevant obligation and are discounted if deemed material.
Note 23 – Cash flow specifications
EUR '000 2023 2022
Adjustments
Financial income -10,551 -1,578
Financial expenses 12,689 4,643
Depreciation, amortization and impairment charges 569 219
Income from investments in subsidiaries 0 0
Share-based remuneration -92 141
Income tax 16,495 126,388
Other adjustments -528 -7
18,582 129,806
Changes in net working capital
Change in inventories 2,078 -22,300
Change in trade receivables 16,202 -12,358
Change in derivatives as an asset
12,285 178,347
Change in other operating assets 179,023 -119,218
Change in trade payables
-19,527 4,370
Change in derivatives as a liability -58,920 -158,684
Change in other operating liabilities -43,037 47,653
88,104 82,190-
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
EUR '000 Borrowings Leases Total
Net debt:
At January 1, 2022 7,442 158 7,600
Cash flows -1,831 -111 -1,942
Additions without cash effect 0 0 0
At December 31, 2022 5,611 47 5,658
Cash flows -5,611 -581 6,192-
Additions without cash effect 0 2,003 2,003
At December 31, 2023 0 1,469 1,469
MFT Energy Holding ApS
Annual Report 2023
56
Accounting policies
Statement of cash flows
The statement of cash flows shows the Group’s cash flows for the year broken down by operating, investing and
financing activities, changes for the year in cash and cash equivalents as well as the Group’s cash and cash equivalents at
the beginning and end of the year.
Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes in working
capital and non-cash operating items such as share-based payment expenses, depreciation, amortization, and impairment
losses. Working capital comprises current assets less short-term debt, ex- cluding items included in cash and cash
equivalents.
Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property,
plant and equipment as well as fixed asset investments.
Cash flows from financing activities comprise cash flows from the raising and repayment of long-term debt and principal
element on lease payments as well as payments to and from shareholders.
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances.
Note 24 – Contingent liabilities, commitments, and
contingencies
Contigent liabilities
EUR '000 20 23 2022
Ch a rg e s a nd s e curity
The following assets have been provided as security to the main bank facilities:
Security comprising simple claims 4,294 4,303
Pledge d asse ts 39,790 153,111
To tal ch ar g e s and s e curity 44,0 84 15 7 ,414
Charges and security
The Group has provided all its trade receivables in MFT Energy A/S as security for all outstanding amounts related to its
main bank facility. The pledged assets consist of two elements as MFT Energy A/S and MFT Energy Holding ApS 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 39,790k.
The Group has provided its shares in the Danish subsidiaries as security for all the outstanding amounts to its main bank
facility.
MFT Energy Holding ApS
Annual Report 2023
57
The Group has entered into an equity guarantee agreement with certain minority owners. The agreements ensure the
equity of the minority owners in case of a default. The agreement terminates in September 2025. On December 31, 2023
this equity amounted to EUR 6,464k.
EUR '000 2023 2022
R e ntal and le a s e o b lig atio ns
MFT Energy Holding has the following le ase obligations under ope rating le ases. Total future lease payments are:
Within 1 year 15 86
Be tween 1 and 5 years - 3
15 89
Other contingent liabilities
The group enterprises are jointly and severally liable for tax on the jointly taxed incomes, etc. of the Group. The total
amount of corporation tax payable is disclosed in the Annual Report of MFT Energy Holding ApS, which is the adminis-
tration company for joint taxation purposes. Moreover, the group enterprises are jointly and severally liable for Danish
withholding taxes by way of dividend tax, tax on royalty payments and tax on unearned income. Any subsequent ad-
justments of corporation taxes and withholding taxes may increase the Company’s liability.
The Danish entities of the Group are jointly and severally liable for VAT on the joint registration of VAT. MFT Energy A/S
is the administration company for joint VAT purposes.
Note 25 – Related party transactions
Related parties are defined as parties with control or significant influence, including group enterprises. Other related
parties comprise the Board of Directors and the Executive Board together with their immediate families.
Furthermore, other related parties include companies in which the aforementioned individuals have significant 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.
Transactions with related parties
EUR '000 2023 2022
The following transactions occurred with related parties:
Other related parties*
Purchase of services 230 36
Financial expenses 13 101
Proceeds from loans with other related parties 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, MFT-E-A ApS,
MFT-E-B ApS, MFT-E-C ApS, MFT-E-D ApS.
MFT Energy Holding ApS
Annual Report 2023
58
EUR '000 2023 2022
Key management personnel
Purchase of services 61 129
Proceeds from loans in connection with share purchase programs 0 -54
Note 26 – Fee to auditors appointed at the annual
general meeting
EUR '000 2023 2022
PricewaterhouseCoopers
Audit fee 235 69
Other assurance services 10 5
Tax advisory services 69 45
Other services 1,162 184
1,476 303
Note 27 – Subsequent events
No events have occurred since the balance sheet date which could materially impact the Group's financial position.
Note 28 – Definitions of financial ratios
The financial ratios have been calculated in accordance with the recommendations of CFA Society Denmark.
Average number of employees = Calculated as average number of full-time employees.
Equity at year end x 100
Total assets
Profit for the year x 100
Average equity
Scalability
Equity ratio
Return on equity
=
=
=
Earnings before intere st and tax (EBIT) x 100
Net trading income (gross profit)
MFT Energy Holding ApS
Annual Report 2023
59
Income statement (parent)
for the year ended December 31, 2023
EUR '000 Notes 2023 2022
Gross profit/loss -1,946 -16
Income from investment in subsidiaries 4 35,889 254,082
Financial income 2 1,157 1
Financial expences 0 -1
Profit/loss for the year 35,100 254,066
Tax on profit/loss for the year 3 -246 4
Profit/loss for the year 34,854 254,070
MFT Energy Holding ApS
Annual Report 2023
60
Balance sheet (parent)
at December 31, 2023
EUR '000
Notes 2023 2022
Investments in subsidiaries 4 133,557 288,778
Fixed asset investments 133,557 288,778
Fixed assets 133,557 288,778
Corporation tax 6,839 4
Other receivables 28 0
Cash and cash equivalents 44,229 397
Current assets 51,096 401
Assets 184,653 289,179
Liabilities and equity
EUR '000
Notes
2023 2022
Share capital 5
10 10
Reserve for net revaluation under the euquity method
127,094 282,311
Retained earnings
52,268 6,197
Equity 179,372 288,518
Trade payables 6 13
Payables to group enterprices 5,276 648
Short-term debt 5,282 661
Total liabilities and equity 184,654 289,179
Contingent assets, liabilities and other financial obligations 7
Related parties 8
Accounting policies 9
MFT Energy Holding ApS
Annual Report 2023
61
Statement of changes in equity (parent)
for the year ended December 31, 2023
EUR '000
Share capital
Share premium
account
Reserve for net
revaluation
under the
equity method
Retained
earnings
Total
Equity at January 1, 2022 10 0 43,538 306 43,854
Extraordinary dividend paid 0 0 0 -15,805 -15,805
Other equity movements 0 0 496 0 496
Capital increase 0 5,903 0 0 5,903
Net profit/loss for the year 0 0 238,277 15,793 254,070
Transfer from share premium account 0 -5,903 0 5,903 0
Equity at December 31, 2022 10 0 282,311 6,197 288,518
Equity at January 1, 2023 10 0 282,311 6,197 288,518
Extraordinary dividend paid 0 0 0 -144,000 -144,000
Other equity movements 0 0 -164 164 -0
Net profit/loss for the year 0 0 -155,053 189,907 34,854
Equity at December 31, 2023 10 0 127,094 52,268 179,372
MFT Energy Holding ApS
Annual Report 2023
62
Note 1 – Staff cost
Note 2 – Financial income
Note 3 – Tax on profit/loss for the year
Note 4 – Investments in subsidiaries
EUR '000 2023 2022
Cost at January 1 6,466 562
Additions for the year 0 5,904
Disposals for the year
-3 0
Cost at Decemb er 31 6,463 6,466
Value adjustments at January 1 282,311 43,538
Net profit/loss for the year 35,889 254,082
Dividend to the Parent company -190,941 -15,805
Other adjustments -165 496
Value adjustments at December 31 127,094 282,311
Carrying amount at December 31 133,557 288,777
2023 2022
Average number of employees 0 0
EUR '000 2023 2022
Interest income, group enterprises 529 1
Financial income, other 628 0
1,157 1
EUR '000 2023 2022
Current tax for the year 246 -4
246 -4
MFT Energy Holding ApS
Annual Report 2023
63
Investments in subsidiaries are specified as follows:
Name
Place of
registered
office
Votes and
ownership
MFT Energy A/S Denmark 99.95%
MFT Energy 1 ApS Denmark 91.95%
MFT Energy 2 ApS Denmark 60.05%
MFT Energy 3 ApS Denmark 59.97%
MFT Energy 4 ApS Denmark 99.95%
MFT Energy 5 ApS Denmark 61.09%
MFT Energy 6 ApS Denmark 53.80%
MFT Energy 7 ApS Denmark 55.72%
MFT Energy Kosovo L.L.C Kosovo 61.09%
MFT Energy US Inc. USA 99.95%
MFT Energy US POWER LLC USA 99.95%
MFT Energy US 1 LLC USA 72.86%
MFT Energy US 2 LLC USA 99.95%
MFT Energy APAC Holding Pte. Ltd. Singapore 79.96%
MFT Energy PTE. LTD. Singapore 99.95%
MFT Energy Singapore Pte. Ltd. Singapore 79.96%
MFT Energy Australia Pty. Ltd Australia 71.16%
MFT Energy See Enerji A.S. Turkey 61.09%
MFT Energy APAC 3 KK Japan 79.96%
Note 5 – Share capital
EUR '000
Number of
shares
Nominal
value
The share capital cons ists of:
Ordinary shares 7,172,450 10
Capital increase 0 0
Ordinary shares at December 31 7,172,450 10
2023
No shares carry any special rights.
MFT Energy Holding ApS
Annual Report 2023
64
Note 6 – Distribution of profit
Note 7 – Contingent assets, liabilities, and financial
obligations
The pledged assets consist of two elements as MFT Energy Holding ApS has specific cash accounts with a total carrying
amount of EUR 33,600k as security for guarantee facilities with its main bank facilities. The present value of the security
is EUR 33,600k.
Contingent liabilities
The group companies are jointly and severally liable for tax on the jointly taxed incomes etc of the Group. The total
amount of corporation tax payable by the Group amounts to EUR 7,291k. Moreover, the group companies 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 liability.
Note 8 – Related party transactions
Transactions
The Company has chosen only to disclose transactions which have not been made on an arm’s length basis in accordance
with section 98(c)(7) of the Danish Financial Statements Act.
EUR '000 2023 2022
Reserve for net revaluation under the euquity method -155,114 238,277
Extraordinary dividend -144,000 15,805
Retained earnings 333,968 -12
34,854 254,070
Extraordinary dividend after year end 0 74,000
Total extraordinary dividend after year end per share in EUR 0 10.3
EUR '000 2023 2022
Charges and securities
The following assets have been placed as security with bankers:
Subsidiaries' share capital with a nom. value of 0 67
Pledged assets 33,600 0
33,600 67
MFT Energy Holding ApS
Annual Report 2023
65
Note 9 – Accounting policies (parent)
The seperate financial statements of MFT Energy Holding ApS for 2023 have been prepared in accordance with the
provisions of the Danish Financial Statements Act applying to medium sized enterprises of reporting class C.
During 2023, the Company's accounting policies were changed to be covered by the provisions of the Danish Financial
Statements Act medium-sized enterprises of reporting class C. The change has only resulted in additional information in
the annual report.
The Financial Statements for 2023 are presented in TEUR
Foreign currencies
Euro (EUR) is used as the presentation currency. All other currencies are regarded as foreign currencies.
Transactions in foreign currencies are translated at the exchange rates at the dates of transaction. Exchange differences
arising due to differences between the transaction date rates and the rates at the dates of payment are recognised in
financial income and expenses in the income statement. Where foreign exchange transactions are considered hedging of
future cash flows, the value adjustments are recognised directly in equity.
Receivables, payables and other monetary items in foreign currencies that have not been settled at the balance sheet
date are translated at the exchange rates at the balance sheet date. Any differences between the exchange rates at the
balance sheet date and the rates at the time when the receivable or the debt arose are recognised in financial income
and expenses in the income statement.
Fixed assets acquired in foreign currencies are measured at the transaction date rates.
Income statement
Other external expenses
Other external expenses comprise expenses for premises, sales and distribution as well as office expenses, etc.
Gross profit/loss
With reference to section 32 of the Danish Financial Statements Act, gross profit/loss is calculated as a summary of
other external expenses.
Other operating income
Other operating income comprise items of a secondary nature to the main activities of the company, including gains on
sales of shares in subsidiaries etc.
Income from investments in subsidiaries
The item “Income from investments in subsidiaries” in the income statement includes the proportionate share of the profit
for the year.
Financial income and expenses
Financial income and expenses are recognised in the income statement at the amounts relating to the finacial year.
Tax on profit/loss for the year
Tax for the year consists of current tax for the year and changes in deferred tax for the year. The tax attr ibutable to the
profit/loss for the year is recognised in the income statement, whereas the tax attributable to equity transactions is
recognised directly in equity.
MFT Energy Holding ApS
Annual Report 2023
66
The Company is jointly taxed with Danish group companies. The tax effect of the joint taxation is allocated to enterprises
in proportion to their taxable incomes.
Balance sheet
Investments in subsidiaries
Investments in subsidiaries are recognised and measured under the equity method.
The item “Investments in subsidiaries” in the balance sheet include the proportionate ownership share of the net asset
value of the enterprises calculated on the basis of the fair values of identifiable net assets at the time of acquisition with
deduction or addition of unrealised intercompany profits or losses and with addition of the remaining value of any
increases in value and goodwill calculated at the time of acquisition of the enterprises.
The total net revaluation of investments in subsidiaries is transferred upon distribution of profit to “Reserve for net
revaluation under the equity method“ under equity. The reserve is reduced by dividend distributed to the Parent
Company and adjusted for other equity movements in the subsidiaries.
Subsidiaries with a negative net asset value are recognised at EUR 0. Any legal or constructive obligation of the Parent
Company to cover the negative balance of the enterprise is recognised in provisions.
Receivables
Receivables are measured in the balance sheet at the lower of amortised cost and net realisable value, which
corresponds to nominal value less provisions for bad debts.
Equity
Dividend
Dividend distribution proposed by Management for the year is disclosed as a separate equity item.
Current tax receivables and liabilities
Current tax liabilities and receivables are recognised in the balance sheet as the expected taxable income for the year
adjusted for tax on taxable incomes for prior years and tax paid on account. Extra payments and repayment under the
on-account taxation scheme are recognised in the income statement in financial income and expenses.
Financial debts
Debts are measured at amortised cost, substantially corresponding to nominal value.