Home Income statement Good results for Reykjavík Energy in the first half

Good results for Reykjavík Energy in the first half

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The results of the interim financial statements of Reykjavík Energy (Orkuveita Reykjavíkur; OR) for the first half of 2021 are very good. Operating expenses compared to the same period in 2020 decreased by more than 7% and the increase in income, partly due to the rise in aluminum prices, explains this good result. Reykjavík Energy CEO Bjarni Bjarnason said the group’s healthy operations and favorable calculated financials explain this, but OR’s total profit for the period was ISK 8.8 billion. .

The consolidated half-yearly accounts of the OR Group for the first half of 2021 were approved today by the Board of Directors of the company. Besides the parent company, the group includes Veitur Utilities, ON Power, Reykjavík Fiber Network and Carbfix.

Reduced operating costs

Regarding OR operations, salary expenses decreased slightly from the previous year and other operating expenses decreased by more than a quarter year-on-year. The cumulative reduction in operating expenses between the first six months of 2020 and the same period in 2021 amounted to ISK 733 million or 7.4%. Revenues from all segments increased and EBIT for the period was ISK 10.2 billion, compared to ISK 8.1 billion in the first half of 2020.

Over ISK 11 billion in fluctuations due to aluminum prices

At the start of the COVID-19 pandemic, aluminum prices fell sharply, but OR’s electricity sales are partly under long-term contracts tied to aluminum prices. A lower estimate of the value of these agreements negatively affected the calculated results for the first half of 2020. During the current year, on the other hand, aluminum prices have increased considerably. In the first six months of 2020, the value of these long-term PPAs would have decreased by 5.7 billion ISK, but in this year’s income statement, the value is estimated to have increased by 5.5 billion ISK. ‘ISK. The variation between years in this calculated number of financial statements therefore amounts to ISK 11.2 billion.

Looking at cash flow – the actual funds in the interim financial statements as opposed to the calculated ones – the effects of lower operating costs and higher revenues from service segments are clear. The operating cash flow of OR and its subsidiaries amounted to ISK 14.6 billion in the first half of the year, compared to ISK 12.5 billion for the same period in 2020. The Group’s liquidity amounts to now at ISK 46 billion and has never been stronger. Today, during the peak construction period of the year, when Veitur Utilities’ resilience investments due to the coronavirus outbreak continue, along with traditional investments and maintenance, this fund is steadily reduced. .

Bjarni Bjarnason, CEO:

Reykjavík Energy’s finances have rarely been in better shape. Our solid control of operating costs is a major factor, as is the economic recovery after the hard blow of the epidemic. Without the figures calculated in this press release, the operation would have brought in a profit of over ISK 4 billion, and I think that is a satisfactory result for a company of this size.

We are constantly improving customer service. Upgrading all energy meters in homes and businesses gives people new tools to keep tabs on their respective energy use, and the number of homes we are connecting with fiber is steadily increasing. increase.

The latest data from scientists on climate change shows us that our projects to support the energy transition in Iceland are urgent and necessary. Therefore, it is important that they perform as well as possible without recoil. We also have high hopes that the Carbfix technology developed for carbon dioxide sequestration will spread rapidly around the world.

Key financial figures

The key financial figures of the OR Group are published on the Orkuveita Reykjavíkur website, together with the financial objectives pursued.

The URL is or.is/fr/finance/key-financial-figures/

Contact:

Ingvar Stefansson

CFO

516 6100

  • OR Q2 2021 Interim Financial Statements.pdf