Reykjavik, 2014-08-29 13:24 CEST (GLOBE NEWSWIRE) -- Reykjavik Energy’s (RE-Orkuveita Reykjavikur) operation returned a profit of ISK 3.8 billion through Q2 2014 and EBIT amounted to ISK 7.5 billion. RE’s total equity is now ISK 84 billion and has more than doubled since year-end 2009.

RE’s interim financial statements for the first half of year 2014 were approved by the Board of Directors and the Managing Director today. The financial statements are in accordance with international financial reporting standards, IFRS.

The Plan exceeds targets

The Plan, an agreement between RE and its owners, has an approximately a six-year lifetime, that expires at year-end 2016. The Plan was intended to return about ISK 50 billion better liquidity position, first and foremost by curtailing in operations, but also with sale of assets, loans from RE’s owners and increased revenue. Now, half way through year 2014, in mid-term of the Plan, these actions should have returned ISK 39.8 billion, but in fact have returned ISK 46.4 billion, 17% above target. The Plan will be followed through the year 2016.

Successful Curtailing in Operations

Improved results of RE are in particular due to the fact that expenses have been decreased significantly in real terms while revenues have increased. From 2010, revenues in the first half of the year have increased by about 40%. Two phases of the power plant in Hellisheidi have been commissioned during this time.

RE’s revenues in the first half of year 2014 decrease compared to same period 2013 because of low aluminium price that decreases revenues from electricity sales. The price of aluminium has increased considerably since the reporting date so revenues could recover. Considerable success has been achieved in hedging for fluctuations in the price of aluminium, interest rates and exchange rates by contracts with foreign financial institutes.

Bjarni Bjarnason, CEO:

We have fared well in getting to grips with RE’s operations and the fruits of that can be observed in more solid balance sheet. The equity ratio, that is now about 30%, has grown rapidly as good earnings have enabled us to repay loans.  We still have clear tasks cut out for us and we must stay alert. Half-way through the Plan, its results exceed targets. RE’s staff and management are determined to keep focused on the Plan’s targets while ensuring solid utility services to our customers.

Managers’ overview

All amounts are in ISK millions at each year’s price level.

Operations for the first half of the year 2010 2011 2012 2013 2014
Revenues 13,561  16,676  19,287  20,111  18,826 
Expenses (6,505) (6,164) (6,560) (6,679) (6,971)
EBITDA 7,056  10,512  12,727  13,432  11,855 
Depreciation (3,902) (4,136) (4,585) (4,496) (4,331)
EBIT 3,154  6,376  8,142  8,936  7,524 
           
Result of the period 5,118 (3,821) (924) 3,736 3,831
           
Cash flow statement:          
Received interest income 100  58  40  81  359 
Paid interest expense (2,032) (2,452) (2,805) (2,473) (2,560)
Net cash from operating activities 6,868 8,928 9,988 10,059 10,953
Working capital from operations 6,256 8,886 10,067 11,174 9,533 

 

         Contact:
         Ingvar Stefansson
         CFO
         +354 516 6000