2016-03-02 17:14:25 CET

2016-03-02 17:14:25 CET


REGULATED INFORMATION

Islandic English
Orkuveita Reykjavíkur - Financial Statement Release

OR’s debt reduced by ISK 76 billion in 6 years 


Reykjavik, 2016-03-02 17:13 CET (GLOBE NEWSWIRE) -- Orkuveita Reykjavíkur’s
(OR; Reykjavík Energy) consolidated annual financial statements confirm the
turnaround in the operations of OR and its subsidiaries in recent years.
Through good and stable operational returns, the Company’s net interest-bearing
debt has been reduced by ISK 76 billion since year-end 2009. In the same
period, OR’s equity ratio has increased from 14% to 37%. 

The consolidated financial statements are made in accordance with IFRS
standards. OR’s main subsidiaries included in the statements are Veitur
Utilities, ON Power and Reykjavik Fibre Network. 

Increased Investments

The operational expenses of the companies within the OR group have been stable
in recent years, showing that rationalization of operations endure.
Furthermore, improved risk management has decreased fluctuations in
aluminium-price linked revenues. Investments of the OR group doubled between
years 2014 and 2015 and amounted to ISK 10.2 billion last year. Significant
investments were; an extensive steam-pipeline and drilling at the Hengill
geothermal field, new sewerages in West-Iceland and renovation of principal
utility facilities there and in Reykjavik. The project of connecting every
urban home in the City of Reykjavik to an elaborate fibre optic network was
completed in year 2015. 

Steep decrease of debt

In year 2015, OR’s net interest-bearing debt decreased by ISK 14 billion and
amounted to ISK 158 billion at year-end. Thus, net interest-bearing debt has
decreased by ISK 76 billion since year 2009. 

The Plan

The measures undertaken as part of the Plan can be divided into external and
internal actions. External actions, a loan from OR’s owners and increased
tariffs, had returned ISK 21.1 billion at year-end 2015 or 38% of the Plan’s
total returns. Internal actions had returned ISK 33.9 billion, or 62%. 

Bjarni Bjarnason, CEO:

The turnaround in the finances of OR and the subsidiaries has been a success
beyond expectations. The cultural shift introduced following the implementation
of the Plan in year 2011 2011 swiftly returned better results of operations.
The improvement seems permanent. 

It may come as a surprise that of the total amount the Plan has returned, only
one-sixth was collected through the tariffs. Five years ago, when the Plan was
launched, it was indicated that OR’s would be saved only by reaching into our
customers’ pockets. That has not materialized. In this half-a-decade, OR’s
finances have been restructured on a new basis. Many people have contributed
that success; OR’s owners, the board of directors, managers and general staff.
Those should be thanked. 

Managers’ overview

OR’s operations                       2011      2012     2013     2014      2015
All amounts are in ISK million at                                               
 each year’s price level                                                        
                                                                                
Revenues                            33,626    37,905   39,209   38,526    40,357
Energy purchases and transmission  (5,016)   (4,866)  (5,402)  (5,335)   (6,400)
Salaries and other expenses        (7,375)   (7,995)  (7,724)  (8,346)   (8,782)
EBITDA                              21,235    25,044   26,084   24,845    25,174
Depreciation                       (8,881)  (10,371)  (8,927)  (9,152)  (10,747)
EBIT                                12,354    14,673   17,157   15,693    14,428
                                                                                
Result of the period                 (556)   (2,295)    3,350    8,871     4,176
                                                                                
Cash flow statement:                                                            
Received interest income               127       147      209      742       677



Note: Among the attachments is OR's Financial report 2015 (Fjármálaskýrsla OR
2015) which is temporarily only available in Icelandic. 


         Contact:
         Bjarni Bjarnason
         CEO
         +354 516 6000