According to Landsvirkjun's consolidated income statement, profit for the first
six months of the year 2009 amounted to USD 47.3 million or approximately ISK 6
billion based on the present exchange rate. The interim financial statements
are prepared in accordance with International Financial Reporting Standards
(IFRS) and are presented in USD, which is the functional currency of
Landsvirkjun. Cash and cash equivalents from operating activities amounted to
USD 103.6 million and equity at the end of the period amounted to USD 1.4
billion.
Key figures in the consolidated interim financial statements of Landsvirkjun
(amounts in USD thousand):
See attachment.
Consolidated revenues amounted to USD 139 million during the period compared to
USD 239.6 million during the same period the previous year. The decrease
amounts thus to USD 100 million and is mainly due to lower aluminium prices,
which were very high during the first six months of the previous year with a
rapid decline in the latter half, and the weakening of the ISK against the USD.
Decreased revenues affect the Company's results less than might be expected
due to hedge instruments. During the period from January to June 2009, the
Company received USD 40 million from foreign financial institutions due to
aluminium hedge instruments while in the same period of 2008, the Company paid
USD 35.7 million due to hedging. Realised income from hedge instruments is
recognised among financial items. Interest expenses are also recognised under
financial items. They decreased from USD 91.3 million in the first six months
of the year 2008 to USD 45.9 million in the same period this year. The decrease
is mainly due to lower interest rates in the United States and Europe.
Landsvirkjun's results are sensitive to changes in fair value of embedded
derivatives relating to the Company's power contracts and exchange rate
changes, since part of the Company's long-term liabilities are denominated in
other currencies than the functional currency. Positive fair value of
derivatives capitalised at the end of June 2009 amounts to USD 187 million
after deducting negative fair value of derivative agreements. The effect of
fair value changes is recognised in the income statement.
Landsvirkjun's liquidity is good with cash and cash equivalents amounting to
USD 129 million at the end of June. The Company also has access to a Revolving
Credit Facility to the amount of USD 308 million, which the Company may draw on
at any time. Cash balance in addition to the unused Credit Facility at the end
of June amounted thus to a total of USD 437 million. The Company has
guaranteed sufficient liquidity throughout the year 2011.
In order to further ensure Landsvirkjun's liquidity the Company and the State
have entered into an Credit Contingent Facility. The terms of which are that
the Icelandic Central Bank will provide the Company with foreign currency, for
which Landsvirkjun will pay in ISK or in bonds, should the Company previously
have exhausted all other financing options. The contract amounts to a maximum
of USD 300 million and expires on 1 July 2011.
At the end of June, the company's total assets amounted to USD 4.6 billion and
the equity ratio was 31.2%
The outlook for Landsvirkjun's operations is relatively favourable for the year
2009 as a whole, especially if aluminium prices remain at their current levels,
since aluminium prices have increased considerably since their low in March.
However, foreign exchange rates and aluminium price developments will still be
significant influential factors in the results of the year.
The interim financial statements of Landsvirkjun for the period from 1 January
to 30 June 2009 were approved in a Board of Directors Meeting on 20 August
2009.
Further information can be provided by Stefán Pétursson, CFO of Landvirkjun,
via telephone number 515 9000.
