Reykjavik, 2014-11-24 16:36 CET (GLOBE NEWSWIRE) -- Reykjavik Energy’s (RE-Orkuveita Reykjavikur) operation returned a profit of ISK 7.9 billion through Q3 2014 and EBIT amounted to ISK 11.3 billion. Steady repayments of loans has improved RE’s equity ratio which now stands at 31.3%. Equity has more than doubled since year-end 2009.

RE’s interim financial statements for the first nine months 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.

The Plan – Basis for Improved Equity

RE’s improved equity can be traced mainly to the successful progress of The Plan – a comprehensive set of measures implemented in Q2 2011. The results of this more than ISK 50 million strategies are above targets and operation cost has decreased in real terms since year 2010. Revenues, on the other hand, have increased by more than 40% in the same period.

In total, the Plan has returned ISK 48,2 billion of the ISK 51,3 billion intended until year-end 2016.

The equity of RE collapsed in years 2008 and 2009 and the equity ratio went as low as 14%. Through improved operation results, which have been used for repayments of loans, the equity ratio has significantly improved and is now 31.1%. Being above 30%, RE now has readier access to financial markets.

RE’s revenues decrease compared to same period 2013 because of low aluminium price that decreases revenues from electricity sales. Considerable success has been achieved in hedging for fluctuations in the price of aluminium, interest rates and exchange rates by contracts with foreign and domnestic financial institutes.

Bjarni Bjarnason, CEO:

Reykjavik Energy’s operations are in good shape and now we have reached a milestone in improving the company’s equity ratio. Thus, we have readier access to financial markets, which is important since we still have to improve the cash status. That enhances our readiness to meet unforeseen changes is the company’s operational environment. Improved operations, improved equity and improved risk management are all necessary for Reykjavik Energy’s ability to carry out its basic functions; providing customers with solid utility services.

Managers’ overview

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

Operations through Q3 2014 2010 2011 2012 2013 2014
Revenues 19,444 24,388 27,286 28,806 28,067
Expenses -9,557 -8,910 -9,449 -9,794 -10,302
EBITDA 9,886 15,478 17,838 19,012 17,766
Depreciation -5,936 -6,178 -6,862 -6,251 -6,510
EBIT 3,950 9,300 10,976 12,762 11,256
Result of the period 16,794 -5,344 2,580 5,796 7,879
Cash flow statement:          
Received interest income 101  98 87 176 442
Paid interest expense -1,466 -2,309 -3,869 -3,448 -3,420
Net cash from operating activities 9,827 14,118 15,572 16,934 17,885
Working capital from operations 8,329 12,937 13,086 14,973 12,677


         Bjarni Bjarnason
         +354 516 7707