HS Orka hf. - Financial Statement Release

HS Orka hf. announces Consolidated Condensed Interim Financial Statements for the nine months ended September 30, 2016

Consolidated Condensed Interim Financial Statements for the nine months ended
September 30, 2016 of HS Orka hf. (the “Company”) were approved at a Board of
Directors meeting on 8 November 2016. The financial statements of HS Orka hf.
are prepared in accordance with International Financial Reporting Standards as
adopted by the European Union and are stated in ISK. The financial statements
can be found on the Company´s website: http://www.hsorka.is 

Company profit for the period was ISK 2,714 million (YTD 2015: ISK 290
million), driven primarily by increased aluminum prices (see below). Operating
revenue was 4.9% lower at ISK 5,119 million (YTD 2015 ISK 5,382 million)
largely due decreased generation at Reykjanes and reduced sales to fish
smelters due to a poor fishing season. 

Net finance income was ISK 2,135 million (YTD 2015: expense ISK 2,016 million).
The major driver for the variance was due to an increase in aluminum prices
since year-end which drove up the fair value of the embedded derivatives and
resulted in a gain of ISK 1,653 million (YTD 2015: loss of ISK 2,156 million).
In addition, net exchange rate differences were positive of ISK 597 million
(YTD 2015 ISK 206 million). 

The deep drilling program at Reykjanes has progressed below 3,850 meters,
making it the deepest drilled hole in Iceland. The target depth remains 5,000
meters, and drilling progresses at 8.5" diameter. Estimated well-bottom
temperatures are currently around 400°C. The program hopes to elucidate a
previously untapped supercritical steam zone 

The Company’s equity ratio is 65.7% compared to 58.6% at year-end 2015.

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

Attachments:

Financial Statements.pdf