Landsvirkjun - Financial Statement Release

- Landsvirkjun's results in 2008

The financial statements of Landsvirkjun were approved today, 20 March 2009, in
a meeting of the Board of Directors. 

The financial statements of Landsvirkjun are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU and
they are presented in USD, which is the functional currency of Landsvirkjun as
of the beginning of 2008. Comparative figures for the year 2007 have been
translated at the end exchange rate of the USD against the ISK at year end
2007. Loss on the operation of the Landsvirkjun group for the year 2008
amounted to USD 344.5 million but EBIT amounted to USD 246 million.  Cash from
operation amounted to USD 184.4 million.  At year end, the group's total assets
amounted to USD 4,619.2 million and equity amounted to USD 1,376.8 million.
Equity ratio was 29.8% at year end 2008. 

Operating revenue increased by USD 83 million, which is mainly explained by the
increase in sale of electricity following the commissioning of the Kárahnjúkar
power plant.  Operating expenses before depreciation amounted to USD 100.5
million during the year compared to USD 105.8 the previous year.  Financial
expenses in excess of financial income amounted to USD 660.6 million, which is
mainly explained by a decrease in the fair value of embedded derivatives in
energy sales agreements which are linked to the price of aluminium as well as
currency exchange loss. The currency exchange loss and fair value changes are
for the most part unrealised and must be taken into account in the evaluation
of the Company's results.  Average nominal interest on long-term loans were
4.51% during the year 2008 compared to 4.69% the previous year. 

Foreign exchange development and fair value changes in embedded derivatives
will continue to be a predominant factor in the results for this year.  The
Company has access to liquidity, which in addition to cash from operation will
ensure that the Company will be able to meet its liabilities until the end of
2010.  Landsvirkjun will not undertake new power projects unless the Company
will be able to provide new long-term funding. 

The financial statements of Landsvirkjun will be submitted to the Company's
Annual General Meeting on 3 April 2009.

Attachments:

lv financial results 2008.pdf