Landsvirkjun - Financial Statement Release

Landsvirkjun's Financial Statements for the year 2010

Good cash flow



  -- Operating revenues amounted to USD 377.6 million, which is an increase of
     10.3% between years.
  -- EBITDA was USD 298.1 million, after taking into account realised aluminium
     hedges. EBITDA ratio is 78.9% of turnover.
  -- Cash from operation amounted to USD 229.6 million, compared to USD 197.0
     million in the previous year, which is an increase of 16.5 %.
  -- Profit after tax amounted to USD 72.9 million compared to USD 192.9 million
     in the previous year.
  -- Average energy price to industrial users was 25.7 USD/MWh compared to 19.5
     USD/MWh in the previous year. Average energy price to retail sales
     companies was 3.4 ISK/kWh compared to 3.2 ISK/kWh in the previous year.
  -- The Company's net interest bearing liabilities decreased by USD 149.9
     million in the year and amounted to USD 2,674 million at year end.
  -- Landsvirkjun's liquidity balance is solid and at year end the Company had
     access to the amount of USD 573.2 million.



Hordur Arnarson, the CEO:

„We are pleased with these results. Landsvirkjun has increasingly been focusing
on maximizing long-term return on energy utilization which can be seen in the
financial statements. A new contract with Alcan Iceland hf. in which energy
price development in Iceland is linked to energy price development on
international markets and the aluminium price link abolished was a certain
milestone in that respect. 

Landsvirkjun has also placed emphasis on balancing the risk in its balance
sheet by decreasing debt as well as ensuring access to liquid assets. The year
2010 was the second year in a row that the Company decreased its debt and at
year end it had access to liquid assets in the amount of USD 573,2 million,
which has never been higher.   In the year 2011 the Company will continue
focusing on decreasing debt. The outlook for the year 2011 is good, mainly due to favourable interest rate
environment and acceptable aluminium price. In addition, the Company has met
considerable interest from both new and older clients of purchasing
electricity. A contract concluded with Íslenska Kísilfélagið ehf. and signed in
February 2011 is indicative thereof. In order to meet increased sale
Landsvirkjun has initiated the project of Búðarháls power plant and financing
of the project is expected to be finalised shortly. The Company also plans to
invest USD 13 million in a geothermal project in North-East Iceland in the
year.“

Attachments:

LV Press release 2010.pdf