HS Orka hf. - Financial Statement Release

HS Orka hf announces Condensed Interim Financial Statements for the three months ended 31 March 2014

Condensed Interim Financial Statements for the three months ended 31 March 2014
of HS Orka hf. were approved at a Board of Directors' meeting on 12th of May
2014. The Financial Statements of HS Orka hf. are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union and are in ISK. The Financial Statement can be found on the company´s
website http://www.hsorka.is 



Main Matters:

  -- Operating revenue for the period 1 January - 31 March 2014 was ISK 1,899
     million compared to ISK 1,947 million for the same period in 2013. Profit
     for the period amounted to ISK 90 million, with the comparable number for
     2013 being a loss of ISK 910 million primarily related to currency and
     aluminium fluctuations described below. Total comprehensive profit amounted
     to ISK 75 million compared to a comprehensive loss of ISK 942 million in
     the first three months of 2013.
  -- Equity ratio is strong at 58,0%, same as it was at year end 2013.
  -- Net finance income and cost have a material impact on the result now as
     often before. Changes in the value of the embedded derivative in power
     purchase agreements (linked to aluminum price) was negative for the period
     of ISK 708 million in the first three months of 2014, compared to a
     negative change of ISK 2,755 million in the same period in 2013. This was
     partially offset by a currency gain of ISK 226 million, versus a foreign
     exchange gain of ISK 936 million in the first three months of 2013.
  -- Company operations are going well and the company‘s EBIDTA was ISK 828
     million in the first quarter of 2014 which is a 6% increase compared to
     same period 2013 where the EBITDA was ISK 781. Revenue was ISK 1,899
     million for the period compared to ISK 1,947 million for Q1 2013 which is a
     reduction of ISK 47 million. Operating cost decreased 6% or ISK 82 million
     between the periods. The decrease in revenue is mainly due to a decrease in
     aluminum prices, but increased sales to the retail market and more sale of
     geothermal water for heating weigh in the opposite direction. On the cost
     side, operational cost of the power plants and transmission cost are going
     down, but there was a small increase in power purchases. Other operating
     costs are also substantially lower than in same period 2013 mostly becausecost of arbitration hearings connected to power sales contract to Norðurál
     Grundartangi that took place in Q1 2013.

Further information is provided by Ásgeir Margeirsson, Managing Director of HS
Orka hf., tel. 520 9300 / 855 9301

Attachments:

HS Orka Financial Statement 31 March 2014.pdf