Orkuveita Reykjavíkur - Financial Statement Release

Reykjavik Energy's operations according to “Plan”

Reykjavik, 2014-08-29 13:24 CEST (GLOBE NEWSWIRE) -- Reykjavik Energy's
(RE-Orkuveita Reykjavikur) operation returned a profit of ISK 3.8 billion
through Q2 2014 and EBIT amounted to ISK 7.5 billion. RE's total equity is now
ISK 84 billion and has more than doubled since year-end 2009. 

RE's interim financial statements for the first half of year 2014 were approved
by the Board of Directors and the Managing Director today. The financial
statements are in accordance with international financial reporting standards,
IFRS. 

The Plan exceeds targets

The Plan, an agreement between RE and its owners, has an approximately a
six-year lifetime, that expires at year-end 2016. The Plan was intended to
return about ISK 50 billion better liquidity position, first and foremost by
curtailing in operations, but also with sale of assets, loans from RE's owners
and increased revenue. Now, half way through year 2014, in mid-term of the
Plan, these actions should have returned ISK 39.8 billion, but in fact have
returned ISK 46.4 billion, 17% above target. The Plan will be followed through
the year 2016. 

Successful Curtailing in Operations

Improved results of RE are in particular due to the fact that expenses have
been decreased significantly in real terms while revenues have increased. From
2010, revenues in the first half of the year have increased by about 40%. Two
phases of the power plant in Hellisheidi have been commissioned during this
time. 

RE's revenues in the first half of year 2014 decrease compared to same period
2013 because of low aluminium price that decreases revenues from electricity
sales. The price of aluminium has increased considerably since the reporting
date so revenues could recover. Considerable success has been achieved in
hedging for fluctuations in the price of aluminium, interest rates and exchange
rates by contracts with foreign financial institutes. 

Bjarni Bjarnason, CEO:

We have fared well in getting to grips with RE's operations and the fruits of
that can be observed in more solid balance sheet. The equity ratio, that is now
about 30%, has grown rapidly as good earnings have enabled us to repay loans. 
We still have clear tasks cut out for us and we must stay alert. Half-way
through the Plan, its results exceed targets. RE's staff and management are
determined to keep focused on the Plan's targets while ensuring solid utility
services to our customers. 

Managers' overview

All amounts are in ISK millions at each year's price level.

Operations for the first half of        2010     2011     2012     2013     2014
 the year                                                                       
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Revenues                              13,561   16,676   19,287   20,111   18,826
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Expenses                             (6,505)  (6,164)  (6,560)  (6,679)  (6,971)
--------------------------------------------------------------------------------
EBITDA                                 7,056   10,512   12,727   13,432   11,855
--------------------------------------------------------------------------------
Depreciation                         (3,902)  (4,136)  (4,585)  (4,496)  (4,331)
--------------------------------------------------------------------------------
EBIT                                   3,154    6,376    8,142    8,936    7,524
--------------------------------------------------------------------------------
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Result of the period                   5,118  (3,821)    (924)    3,736    3,831
--------------------------------------------------------------------------------
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Cash flow statement:                                                            
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Received interest income                 100       58       40       81      359
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Paid interest expense                (2,032)  (2,452)  (2,805)  (2,473)  (2,560)
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Net cash from operating activities     6,868    8,928    9,988   10,059   10,953
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Working capital from operations        6,256    8,886   10,067   11,174    9,533
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         Contact:
         Ingvar Stefansson
         CFO
         +354 516 6000

Attachments:

THE PLAN Progress Report 2014H1.pdf

Reykjavik Energy 1H 2014 inerim financial statements.pdf