Reykjavík, 2017-08-24 17:05 CEST (GLOBE NEWSWIRE) -- Decreased operation expenses for Orkuveita Reykjavíkur (OR; Reykjavík Energy) while external factors were favorable resulted in considerable profits in the first half of year 2017. According to the interim consolidated financial statements, approved by the Board of Directors today, bottom-line profits through Q2 amounted to ISK 7.3 billion.
Lower operating cost and rising aluminum price
The OR group comprises Veitur Utilities, ON Power and Reykjavík Fibre Network in addition to the parent company. Operation expenditures for the group decreased compared to the first half of year 2016 by ISK 152 million. Despite increased collectively bargained wages, increased power generation at the Hellisheidi Power Plant resulted in decreased need for power-purchasing for resale. The improvement is a result of the connection between the plant and the nearby Hverahlid geothermal field. Also power transmission tariffs decreased.
The group’s revenues increased despite lowering of various utility tariffs at the beginning of the year. Higher aluminum price, which is reflected in power price for smelters, and increased economic activity in Iceland are the principle causes. Additionally, increased aluminum price results in increased value of derivatives in long-term energy contracts. This explains a considerable portion of the period’s profits, or ISK 4.9 billion of 7.3 billion.
Key Financial Figures on the Web
OR has in recent years published Key Financial Figures along with the company’s financial statements. They can now be found on the company’s website at https://www.or.is/english/finance#page-8068. The web also comprises interim and annual financial statements for recent years.
Bjarni Bjarnason, CEO
These results are good for the company, its owners, and customers. Reykjavík Energy’s financial strength continues to improve and the prudence interwoven in our company-culture advances our ability to offer our services at a reasonable price.
However, we are not sailing a smooth sea. A considerable portion of the profits in these financial statements are derived from factors not under our control, namely the price of aluminum. Furthermore, serious damages to a part of the company’s office buildings have materialized, calling for costly measures. In the coming months we will initiate discussions with various stakeholders regarding that issue.
Managers’ Overview
| All amounts are in ISK million | Q2 2013 | Q2 2014 | Q2 2015 | Q2 2016 | Q2 2017 |
| Revenues | 20,111 | 18,234 | 20,479 | 20,955 | 21,612 |
| Expenses | (6,679) | (6,379) | (7,443) | (8,215) | (8,063) |
| thereof energy purchase and transmission | (2,668) | (2,530) | (3,256) | (3,133) | (2,898) |
| EBITDA | 13,432 | 11,855 | 13,036 | 12,741 | 13,549 |
| Depreciation | (4,496) | (4,331) | (4,799) | (5,303) | (4,706) |
| EBIT | 8,936 | 7,524 | 8,237 | 7,438 | 8,842 |
| Results of the period | 3,736 | 3,831 | 2,260 | 5,029 | 7,311 |
| Cash flow statement: | |||||
| Received interest income | 81 | 359 | 252 | 57 | 124 |
| Paid interest expense | (2,473) | (2,560) | (2,215) | (1,890) | (2,013) |
| Net cash from operating activities | 10,059 | 10,953 | 11,042 | 11,774 | 12,652 |
| Working capital from operation | 11,174 | 9,533 | 10,501 | 10,617 | 11,707 |
Contact:
Bjarni Bjarnason
CEO
tel. +354 516 6100
