- Reduced tariffs
- Real-term reduction of operation expenditures strengthens overall finances
- New ESG sustainability Annual Report published on-line
The operations of Orkuveita Reykjavíkur (OR; Reykjavík Energy) returned sizable profits in year 2017, allowing for reduced tariffs, among other things. Water tariffs will now be further reduced. Bjarni Bjarnason, OR’s CEO, says the results of 2017, the first year after the so-called Plan, show that a permanent culture-shift has taken place in the Company’s operations.
Orkuveita Reykjavíkur’s consolidated annual financial statements were approved by the Board of Directors today with a bottom-line profit of ISK 16.3 billion. About one-half of the profit can be traced to aluminium derivatives in energy sales, but the price of the metal increased last year.
Many positives
Increased demand for the services of the companies comprising the OR Group – Veitur Utilities, ON Power and Reykjavík Fibre Network – are apparent in the consolidated financial statements. Increased economic activity called for extended utility-services, the price of aluminium increased, more power generation in power stations allowed for reduced power purchases for resale, and the extension of the fibre network has never been as rapid as in year 2017. Investments increased as much. The Group’s revenues increased by over 6% while expenditures in regular operations increased but by 0.7%. This was the seventh year in succession that the operation expenditures decreased, adjusted for inflation.
Decreased tariffs
The OR Group’s customers benefit directly from these results, and a decrease in water tariffs in Reykjavík and Akranes by 10% have already been approved. Water tariffs in other municipalities will also be lowered. Good grip on expenditures allowed for decreased tariffs for electricity distribution twice in year 2017. At the beginning of year 2017, the water tariff was also significantly lowered. Real-terms decrease in the price of these services amount to 23% in just over one year. Considerable investments in heating and waste-water systems have prohibited similar decrease in tariffs for those services.
Bjarni Bjarnason, CEO
I’m very content with these financial statements. A firm grip on expenses have led to improved results and Reykjavík Energy now has regained full financial strength. Favourable externalities have also contributed. Service-levels are high and we will keep decreasing tariffs.
The turnaround in OR’s operations is significant. It’s very pleasing to see that the cost of regular operations decreased in real-terms year-on-year despite The Plan was led to a successful conclusion at year-end 2016. Solid operations enable the OR Group to support important social projects, i.e. the on-going energy-shift in transportation.
ESG sustainability report
Financial statements are a given in any company’s reporting and Orkuveita Reykjavíkur has published an annual environmental report since the turn of the century. This year, OR publishes an integrated ESG report for year 2017. It covers environmental impact, social factors, and governance as well as several financial metrics. OR’s Annual Report 2017 is only published on-line instead of the printed versions of previous years.
Click here to see Reykjavík Energy Annual Report 2017.
Hólmfríður Sigurðardóttir, OR’s Head of Environmental Affairs
For obvious reasons, we emphasize climate action in this integrated Annual Report. If any operation is to be sustainable it must stand the test of time. In the long – and quite possibly short – term, human climate impact constitutes probably the most pivotal changes our operations face and need to adjust to.
Every day, we make decisions with impacts into the future. The OR group has a resourceful staff. However, we need all hands on deck in finding the most durable solutions to the challenges we face. Therefore, we publish our environmental- and social challenges in our Annual Report, staying open to suggestions for in what way we can improve.
Managers’ overview
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Amounts in ISK million | |||||
| Revenues | 39,209 | 38,526 | 40,357 | 41,423 | 44,002 |
| Expenses | (13,126) | (13,681) | (15,183) | (16,062) | (17,285) |
| thereof power purchase and transport | (5,402) | (5,335) | (6,400) | (6,205) | (5,949) |
| EBITDA | 26,084 | 24,845 | 25,174 | 25,361 | 26,717 |
| Depreciation | (8,927) | (9,152) | (10,747) | (10,392) | (9,063) |
| EBIT | 17,157 | 15,693 | 14,428 | 14,968 | 17,654 |
| Income tax | (7,572) | (2,004) | 587 | (4,702) | (5,397) |
| Result of the period | 3,350 | 8,871 | 4,176 | 13,352 | 16,339 |
| Other metrics | |||||
| Direct release of CO2-equivalent – Scope 1 (tonnes) | 60,280 | 55,982 | 52,045 | 43,866 | 40,320 |
| Capture and sequstration of H2S at Hellisheiði Plant (%) | 0% | 13% | 26% | 47% | 68% |
| Electricity generation (GWh) | 3.422 | 3.443 | 3.249 | 3.411 | 3.473 |
| Hot water production (Million m3) | 92 | 90 | 95 | 91 | 94 |
| Potable water production (Million m3) | 27 | 29 | 29 | 30 | 29 |
| Gender pay-gap | 4.6% | 3.7% | 2.3% | 2.1% | (0.3%) |
| Women among managers | 37% | 44% | 47% | 49% | 51% |
---
Contact:
Bjarni Bjarnason
CEO
+354 516 6100
