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2009-11-16 15:40:02 CET 2009-11-16 15:41:02 CET REGULATED INFORMATION Hitaveita Suðurnesja - Financial Statement Release- Interim Financial Statements 30 September 2009HS Orka Reports Rise in Profit and Equity ratio HS Orka hf. - Interim Financial Statements 30 September 2009 The interim financial statements of HS Orka hf. were approved in a Board of Directors' meeting today 16 November 2009. Due to special circumstances and request of the shareholders the Company now present an Interim Financial statements for the 9 months reporting period ended 30 September 2009. Up until now the Company has solely presented annual and semi annual financial statements. Main matters The comprehensive income of the period amounts to ISK 2,641 million. Equity ratio was 23.0%, whereas it was 16.3% at the beginning of the year. Since the beginning of the reporting period, aluminum price has increased. Therefore, the future value of aluminum plant agreements (fair value changes of embedded derivatives) has increased by in excess of ISK 2.2 billion. However, at the same time there is also a foreign exchange loss of around ISK 1.2 billion. The comparative figures are for a 12 month period in 2008 instead of 9 months and are not comparable. This is due to difficulties of generating the 9 month figures for 2008 as the Company was demerged into two companies in December 2008. Whereas HS Veitur hf., took over the exclusive licence operation of Hitaveita Suðurnesja hf. The operation pertaining to HS Veitur hf. is presented as discontinued operation in comparative figures in the Company's interim financial statements. The Company's profit during the 9 month period 2009 amounted to ISK 2,226 million compared to loss of ISK 11,682 million during the 12 month period 2008. After taking into account income and expenses recognised under equity, comprehensive income of the period amounted to ISK 2,641 million compared to loss off ISK 4,744 million for the 12 month period in year 2008. According to the statement of comprehensive income, HS Orka hf.'s operating revenue in the period amounted to ISK 4,357 million compared to ISK 5,425 million for the 12 month period in year 2008. Operating revenue is expected to increase by 7% for a twelve month period. The increase in revenue is partly due to service fees for services provided to HS Veitur hf., but the companies have entered into a service agreement thereon. Production cost and cost of sales amounted to ISK 3,024 million compared to ISK 3,066 million for the 12 month period in year 2008. The increase is mainly due to operational costs in cleaning geothermal wells at Reykjanes for the first time, in addition to cost of services provided to HS Veitur hf. In July 2009, the Company sold land and geothermal heat rights to the City of Reykjanes. The sales value amounted to ISK 854 million and recorded gain on the sale amounted to ISK 784 million. Other operating expenses amounted to ISK 382 million compared to ISK 376 million for the 12 month period of year 2008. Included in other operating expenses 2009 is impairment loss of intangible assets amounting to ISK 142 million. Other operating expenses less impairment loss amounted to ISK 240 million. Due to the current market condition management expects that future planned projects will be delayed and after assess the recoverable amount of the development cost the company fully impaired development cost at Hallkellsholar. Net finance income amounted to ISK 615 million in the period compared to net finance loss in the amount of ISK 15,516 million for 12 month period in 2008. The weakening of the Icelandic krona against foreign currencies lead to a ISK 1,225 million foreign exchange loss whereas in the previous year foreign exchange loss amounted to ISK 10,408 million. Interest expenses amounted to ISK 791 for the 9 month period compared to ISK 1,037 million for the 12 months period in 2008. No finance expenses were capitalised during the period compared to ISK 34 million in 2008. Increase in fair value of the Company's embedded derivatives amounted to ISK 2,157 million in the period compared to a decrease of ISK 2,687 million for 12 months period in 2008. Share in profit of associates amounted to ISK 229 million compared to loss of ISK 264 million for 12 month period in 2008. Translation gain of associates amounted to ISK 415 million and is recorded as other comprehensive income. The translation gain is due to a change in a reporting currency of an associate. According to the balance sheet as at 30 September 2009, HS Orka hf.'s assets amounted to ISK 37,350 million. Assets increased by ISK 871 million from the beginning of the year. HS Orka hf.'s liabilities amounted to ISK 28,774 million according to the balance sheet, whereof short term liabilities amounted to ISK 5,581 million. Liabilities have decreased by ISK 1,770 million from the beginning of the year. Long term liabilities decreased by ISK 8 million. Short term liabilities decreased by ISK 1,762 million, which is mainly explained by the payment of interest bearing short term liabilities and payment of short term liabilities due to cost of projects. The Company does not meet with the covenants of loan agreements on minimum equity ratio and operating ratios. The company has now reached an agreement with NIB (Nordic Investment Bank) and CEB (Council of Europe Development Bank) and an agreement with EIB (European Investment Bank) is at a final stage. In accordance with the agreements the two banks have issued waiver letters concerning the company's breach of the original covenants for a certain period of time and replace them with new temporary covenants. Loan agreements with covenants in breach are presented in accordance with its original contract terms. HS hf.'s equity amounted to ISK 8,576 million at the end of the period. Equity ratio was 23.0%, whereas it was 16.3% at the beginning of the year. At the beginning of the year, equity amounted to ISK 5,934 million. The increase in equity is explained by the profit of the period and a translation difference due to an associate. "Operating outlook for HS Orka hf. is good, provided that the Company will be able to conclude an agreement with all the creditors on new covenants etc on existing loans. The Company's activity is growing and it will continue working on increased power production. Research will be carried out on further power plant options and various licences are being obtained in relation thereto. The largest single projects are research drilling and other preparation for new power plants in addition to increased brine re-injection. " Following are the main figures in the interim financial statements in ISK thousand: See attachment. |
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