Orkuveita Reykjavíkur - Company Announcement

Increased Environmental Investments and Firm Cash Position

Reykjavik, 2014-10-31 15:28 CET (GLOBE NEWSWIRE) -- Investments will increase
considerably in the next years according to Reykjavik Energy's (RE) recently
approved consolidated budget. Prominent are investments in environmental
projects but also improvements in utility systems. In year 2015, ISK 10.3
billion are budgeted for investments, compared to estimated ISK 6.4 billion
this year. 

With the implantation of Reykjavik Energy's and the Company's owners' Plan,
early 2011, the operations results stabilized. Expenses have been curbed and
income is steady. The Plan's aim was to improve RE's cash position by more than
ISK 50 billion in years 2011 through 2016. Thereof, ISK 30 billion were by
internal actions and ISK 20 billion from external sources, i.e. loans from
owners and by amending tariffs. All aspects of the Plan are on target and have
- along with other measures - returned results above target. 

The Plan supposed postponement of extensive sewerage investments. This
environmentally important project will resume in year 2015 and be concluded in
2016. Also, the construction of a new conveying station in Akranes has
commenced, the purpose of which is enabling fish factories to convert their
operations from fossil fuels. The renewal of the important Deildartunga heating
pipeline will continue. 

To enhance the sustainability of geothermal harnessing in the Hengill area,
RE's subsidiary Our Nature plc., has undertaken connecting the company's
boreholes by Hverahlid to the Hellisheidi Power Plant. That is next year's most
extensive investment regarding power plant operations. 

Debts will continue to decrease, according to the budget. In year 2015, RE's
equity will increase by around ISK 7 billion and at year end an equity ratio of
34.6% is planned. 

The attached consolidated budget of Reykjavik Energy for year 2015 and
long-term plan for years 2016 through 2020 is the first made following the
statutory unbundling of the company's operations. It has been approved by the
respective subsidiaries' Boards of Directors as well as by the parent company's
BoD. It is now being considered by The City of Reykjavik as a part of the
City's consolidated budget. 


         Contact:
         Mr. Bjarni Bjarnason
         CEO
         Tel. + 354 5167707

Attachments:

RE consolidated budget 2015 and five year plan 2016-2020.pdf