Orkuveita Reykjavíkur - Financial Statement Release

Orkuveita Reykjavíkur - Consolidated Condensed Financial Statements; 1 January to 30 June 2011

Reykjavik, 2011-08-24 17:18 CEST (GLOBE NEWSWIRE) -- Operations of Orkuveita
Reykjavíkur (OR) returned better results for the first half of 2011 than for
the comparative period last year. The reasons are increased revenues and
curtailing in operations. Net cash from operating activities amounted to ISK
8.9 billion, an increase of over ISK 2 billion from the comparative period
2010. 

Due to unfavorable currency exchange developments in the first half of 2011,
financial income was negative, in spite of an increase in the price of aluminum
that increases the book value of OR's embedded derivatives from wholesale
electricity contracts. The book value of liabilities increased due to a 6%
devaluation of the Icelandic currency in the period. This outbalanced positive
effects of an increase in the price of aluminium. 

Loss during the period amounted to ISK 3,822 million but the first half of 2010
returned a profit of ISK 5,118. 

Orkuveita Reykjavíkur´s condensed consolidated interim financial statements for
the first half of 2011 were approved by the Board of Directors today. 

Orkuveita Reykjavikur's condensed consolidated interim financial statements are
in accordance with international financial reporting standards as adopted by
the EU. 

Bjarni Bjarnason, CEO of OR:

“Considerable achievements have been made in cost cutting at the company.
Salary outgoings and vehicle costs have fallen, and investments in utility
systems have dropped sharply. The company will continue to streamline its
operations. The depreciation of the Icelandic krona has, however, cast a
negative shadow on the improvements in operations. There remain many challenges
ahead.” 

Highlights of the first half 2011

Orkuveita Reykjavikur´s operations returned a loss of ISK 3,822 million in the
first half of 2011. The comparative period 2010 resulted in a profit of ISK
5,118 million. 

Operating revenues for the first half of 2011 amounted to ISK 16,676 million.
Operating revenues for the first half of 2010 amounted to ISK 13,561 million. 

EBITDA for the first half of 2011 was ISK 10,512 million and ISK 7,056 million
in the comparative period 2010. 

Financial income and expenses were negative for the first half 2011 and
amounted to ISK 11,154 million. The amount for the first half 2010 was positive
by ISK 2,913 million. 

Total assets 30 June 2011 were ISK 293,092 million and were ISK 286,540 million
at year-end 2010. 

Equity of the Company 30 June 2011 was ISK 49,485 million and was ISK 52,847
million at year-end 2010. 

 Total liabilities of the Company 30 June 2011 were ISK 243,607 million
compared to ISK 233,694 million at year-end 2010. 

 The equity ratio was 16.9% as at 30 June 2011 compared to 18.4% at year-end
2010. 



Other issues and prospects

In March 2011 The Board of Directors and OR's owners agreed upon an extensive
action plan to secure a more solid foundation for the company‘s operation and
activities for years 2011 through 2016. The plan comprises reduction and
postponement of investments, economization, increased tariffs and a
subordinated loan from the Company´s owners. These actions are progressing as
planned. 

The Company plans to conclude the enlargement of the power plant at Hellisheiði
by commissioning the 5th phase of the plant, producing of 90 MW electricity, in
Q3 and Q4 2011. 



Orkuveita Reykjavíkur                                    
Orkuveita Reykjavíkur Interim Financial Statements       
1 January to 30 June 2011                                
All amounts are in ISK millions                          
Interim statement                        2011        2010
of comprehensive income              1.1-30.6    1.1-30.6
Operating revenue                      16,676      13,561
Operating expenses                    (6,164)     (6,505)
EBITDA                                 10,512       7,056
Depreciation, amortisation            (4,136)     (3,902)
Financial income and (expenses)      (11,154)       2,913
Results from associated companies         (5)          25
(Loss) profit before income tax       (4,784)       6,092
Income tax                                962       (974)
(Loss) profit for the period          (3,822)       5,118
Attributable to:                                         
Equity holders of the Company         (3,822)       5,118
Minority interest in subsidiaries           0           0
(Loss) profit for the period          (3,822)       5,118
Net cash from operating activities      8,928       6,868
Statement of financial position     30.6.2011  31.12.2010
Non-current assets                    281,587     278,270
Current assets                         11,505       8,270
Total assets                          293,092     286,540
Equity                                 49,485      52,847
Non-current liabilities               220,468     212,162
Current liabilities                    23,139      21,531
Equity and liabilities                293,092     286,540
Ratios                                                   
Working capital ratios                   0.50        0.38
Equity ratios                           16.9%       18.4%




         Bjarni Bjarnason, CEO Orkuveita Reykjavikur, tel: +354 516 7707.

Attachments:

Orkuveita Reykjavíkur - financial statements_30 6 2011.pdf