Orkuveita Reykjavíkur - Financial Statement Release

CORRECTION: Costs still decreasing

Operations of the Company ISK 173 million less than last year | EBIT ISK 8.9
billion in the first half of the year | Debts decrease by ISK 21.3 billion but
are still extensive 
The “Plan” stands

Reykjavik, 2013-08-29 16:56 CEST (GLOBE NEWSWIRE) -- Reykjavik Energy's (RE -
Orkuveita Reykjavikur) EBIT in the first half of the year 2013 amounted to ISK
8.9 billion but was ISK 8.1 billion in the same period 2012. 

Restraint in the Company´s operating expenses is still returning less cost and
salaries and other operational cost have decreased by ISK 173 million since
last year. External factors have either been favourable or non-favourable in
the period. Hedging has led to increased stability in the Company´s returns. 

RE's Board of Directors confirmed the Company´s interim financial statements
today. They are prepared in accordance with International Financial Reporting
Standards, as adopted by the EU. 

External Factors

EBITDA of the Company in the first half of the year 2013 amounted to ISK 13.4
billion but was ISK 12.7 billion in the same period 2012. External factors,
exchange rates against the ISK, price of aluminium and rates of interests, have
developed each in its own way. The developments of exchange rates against the
ISK have been favourable for the Company but the price of aluminium is low,
having a negative effect on the financial part of the financial statements.
Profit after taxes for H1 2013 amounted to ISK 3.7 billion. 

Emphasis is still on restraining costs in the operations and repayment of
debts. Debts have decreased by ISK 21.3 billion since year-end 2012. A result
of this and the determination in implementing the Company's and its owners'
Plan, RE has had the option of hedging the Company against changes in external
factors in contracts made both with Icelandic and foreign financial institutes. 

The Plan returns ISK 32.7 billion better cash position

The result of the Plan for the first half of the year 2013 amounted to ISK 8.9
billion, that is ISK 104 million below set targets. The Plan that the Company´s
BoD and owners adopted in spring 2011, has returned ISK 32.7 billion in RE's
improved cash position. That is ISK 2.0 billion in excess of original targets.
All parts of the Plan are on schedule except for sale of assets. 

Bjarni Bjarnason, CEO of Reykjavik Energy:

Regular operations of the Company are stably on track as the returns for recent
periods show. The Company´s staff, the BoD and owners are all resiliently
committed to the Plan and making efforts to ensure its success. 

Our customers' access to electricity, hot and cold water and sewerage is always
a priority but ahead are important tasks besides regular activities. In
accordance with law, the Company needs to finalise the unbundling of licensed
and competitive operations by year-end 2013. We are also working on various
projects to ensure sustainable operations of the power plant at Hellisheidi. It
is important to resolve the challenges there while making sure we do not lose
sight of the public service the Company is trusted to fulfil. 

Managers´ overview

Operations for the first half of        2009     2010     2011     2012     2013
 the year                                                                       
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Revenues                              11.925   13.561   16.676   19.287   20.111
--------------------------------------------------------------------------------
Expenses                             (6.233)  (6.505)  (6.164)  (6.560)  (6.679)
--------------------------------------------------------------------------------
EBITDA                                 5.692    7.056   10.512   12.727   13.432
--------------------------------------------------------------------------------
Depreciation                         (4.702)  (3.902)  (4.136)  (4.585)  (4.496)
--------------------------------------------------------------------------------
EBIT                                     990    3.154    6.376    8.142    8.936
--------------------------------------------------------------------------------
Realised financial income and        (3.964)  (1.120)  (1.388)  (1.791)  (1.447)
 (expenses)                                                                     
--------------------------------------------------------------------------------
Result before unrealised financial   (2.973)    2.034    4.987    6.351    7.488
 income and (expenses)                                                          
--------------------------------------------------------------------------------
Unrealised financial income and     (10.136)    4.058  (9.771)  (8.292)  (4.077)
 (expenses)                                                                     
--------------------------------------------------------------------------------
Result before income tax according  (13.109)    6.092  (4.783)  (1.942)    3.411
 to the interim statements                                                      
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Income tax                             2.494    (974)      962    1.017      325
--------------------------------------------------------------------------------
Result of the period                (10.615)    5.118  (3.821)    (924)    3.736
--------------------------------------------------------------------------------




         Contact:
         Mr. Bjarni Bjarnason, CEO
         +354 5166000