Reykjavík, 2016-08-22 18:32 CEST (GLOBE NEWSWIRE) -- Operations of Orkuveita Reykjavíkur (OR; Reykjavík Energy) return good and stable results. In the first half of year 2016 profits amounted to ISK 5 billion compared to ISK 2.3 billion for the same period in 2015. Sustained rationalization and favorable development in currency exchange rates play part in the improved results. Wages have increased following recent collective agreements with unions. OR’s net interest-bearing debt decreased by ISK 9.0 billion in H1 2016.
OR’s Board of Directors approved today the company’s consolidated interim financial statements.
The Plan coming to an end
In early 2011, OR’s BoD and owners agreed upon a set of actions, known as The Plan, in response to the company’s serious financial position. It extends through year 2016 and its main target is improving the cash position by approximately ISK 50 billion for the period. That goal was already reached in mid-year 2015. By the end of June 2016, OR’s cash position had improved by ISK 57.1 billion. The Plan contained considerable and sustained austerity in operations and that tariffs would keep their real-term value. The tariffs had lost their value noticeably in the years leading to 2011. OR’s owners also agreed to refrain from receiving dividends for the duration of The Plan.
Tariffs decrease
January 1st 2017, Veitur Utilities, OR’s wholly owned subsidiary which operates licensed utilities, will cut their tariffs for electricity distribution and potable water. Extensive investment in sewage and district-heating systems prevent cuts in those tariffs. Veitur Utilities’ electric grid serves about one-half of Iceland’s population and its water works serve 40% of the country’s population.
Bjarni Bjarnason, CEO
Reykjavík Energy is doing fine. Our services are solid, the financial results are good, debt is decreasing and all our finances are improving. It pleases us that when The Plan expires, at year end, our success in its implementation allows us to decrease tariffs. Thus, our customers will directly benefit from the achievement in improving OR’s operations and finances. Now, as we work on our financial forecast for the coming years, we will evaluate whether dividend conditions will be met.
Managers’ overview
| Amounts are in ISK million | H1 2012 | H1 2013 | H1 2014 | H1 2015 | H1 2016 |
| Revenues | 19,287 | 20,111 | 18,234 | 20,479 | 20,955 |
| Expenses | (6,560) | (6,679) | (6,379) | (7,443) | (8,215) |
| thereof energy purchase and transmission | (2,377) | (2,668) | (2,530) | (3,256) | (3,133) |
| EBITDA | 12,727 | 13,432 | 11,855 | 13,036 | 12,741 |
| Depreciation | (4,585) | (4,496) | (4,331) | (4,799) | (5,303) |
| EBIT | 8,142 | 8,936 | 7,524 | 8,237 | 7,438 |
| Result of the period | (924) | 3,736 | 3,831 | 2,260 | 5,029 |
| Cash flow | |||||
| Received interest income | 40 | 81 | 359 | 252 | 57 |
| Paid interest expense | (2,805) | (2,473) | (2,560) | (2,215) | (1,890) |
| Net cash from operating activities | 9,988 | 10,059 | 10,953 | 11,042 | 11,774 |
| Working capital from operation | 10,067 | 11,174 | 9,533 | 10,501 | 10,617 |
Contact:
Mr. Bjarni Bjarnason
CEO
Tel: +354 516 6100
