Reykjavik, 2015-02-11 17:20 CET (GLOBE NEWSWIRE) -- Fitch Ratings has published Orkuveita Reykjavikur (Reykjavik Energy; RE) Long-term Issuer Default Rating (IDR) of ‘BB-‘. The Outlook is Stable. The standalone rating is two notches higher than Moody’s issued in December 2014. This is the first time RE is rated by Fitch.
The Plan Returns Good Results
The conversing factors influencing the rating are, on one hand, solid income, the majority of which is from regulated services, and, on the other hand, risks involving currency exchange rates, aluminum price and leverage. Fitch regards the outlook stable as RE has over-performed in the implementation of The Plan, an agreement between RE’s BoD and its owners in early 2011.
Wider Scope of Rating
Fitch has hitherto not rated an Icelandic utility. Legal and political environment of RE’s operations are considered in the rating. It states that although these risks are currently benign, they might change following the expiry of The Plan at year-end 2016. It is also pointed out that due to the low water and energy prices in Iceland, the same energy affordability issues that other European countries face, do not prevail in Iceland.
Bjarni Bjarnason, CEO of Reykjavik Energy
It is very encouraging to see how the solid cooperation between RE’s owners, BoD and staff is noted in the rating report and the accomplishments it has returned in solidified finances. Furthermore, Fitch notes how financial risks have been mitigated but also points out other factors, ranging from tariffs to capital controls in Iceland. In my view, the unity between the owners of Reykjavik Energy on Company policies – where reliable utility services are in the forefront – significantly reduce uncertainties in the business environment.
Fitch Ratings’ release is attached.
Contact:
Bjarni Bjarnason
CEO
+354 516 7707
