The operations and finances of Orkuveita Reykjavíkur (OR; Reykjavík Energy) are strong and no significant changes are foreseen. This is the keynote in OR group’s consolidated forecast for year 2019 and long-term plan for years 2020 through 2024. The group comprises Veitur Utilities, ON Power and Reykjavík Fibre Network in addition to the parent company. The forecast was approved by OR’s Board of Directors today and will now be integrated into the consolidated budget of The City of Reykjavík.
Solid finances, upgrade of utility systems, development of services
A strong financial policy is a prerequisite for OR‘s current policy of looking further ahead than before in development of utility systems, sustainability of resource utilisation, and future provision of services. We expect to invest in utilities systems, many of which need to be renewed, in increased automation of services, and in energy exchange in transportation, an increasingly important environmental project. These plans extend further than the duration of this forecast.
A few points in the forecast
- OR’s net debt is forecast to decrease by ISK 14.1 billion in years 2018 through 2024.
- Tariffs are supposed to be in line with levels of inflation.
- Taxes on income and capitals gains will amount to ISK 18.4 billion for the period, according to the financial forecast.
- Dividends to owners are expected to amount to ISK 13.8 billion for the period.
- The most extensive investment projects are at Veitur Utilities: continued renewal of pipelines in Akranes and Borgarnes – the Deildartunga pipeline – which is expected to be completed in 2025, implementation of smart meters, and projects that promote untraceable sewerage.
- The most extensive investment project at ON Power are drilling to maintain steam extraction volumes for the power stations in the Hengill area, as well as continued development of reinjection solutions. The expansion of the hot water production at Hellisheiði power plant is also included in the forecast and environmental and R&D projects by ON Power’s Hellisheiði Geothermal Power Plant.
- Investments of Reykjavik Fibre Network chiefly involve laying a fiber optic cable in a selection of municipalities.
Policy-based forecasting
OR uses the method of 'Beyond Budgeting' in its forecast process. This means that the documented policy of each subsidiary is the basis for the forecast and decisions are made based on these policies and goals.
In the attached OR Consolidated Forecast 2019 and Long-Term Plan 2020-2024, key financial indicators and goals are graphically presented.
Contact:
Ingvar Stefansson
CFO
+ 354 516 6100
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