Orkuveita Reykjavíkur - Company Announcement

OR’s owners approve conditions for payment of dividend

Reykjavik, 2015-12-30 14:09 CET (GLOBE NEWSWIRE) -- Orkuveita Reykjavíkur’s
(OR; Reykjavik Energy) owners have ratified the Company‘s Board of Directors’
proposal regarding financial conditions for future payment of dividend. Bjarni
Bjarnason, CEO of OR, says the resolution is important and a sign of the
Company’s owners’ commitment to sustaining good operations and solid finances. 

Unanimously approved

OR’s owners are The City of Reykjavik (93.5%), The Municipality of Akranes
(5.5%) and The Township of Borgarbyggd (1%). Now, each of the respective
municipal councils have ratified the proposal. They pertain to, among other
things, equity ratio, cash position, leverage, and dividend ratio. The proposal
was unanimously approved by all the municipalities’ councils. 

Bjarni Bjarnason, CEO

This harmonious formulation of policy by the owners is a sign of their resolve
in safeguarding the successes already attained in improving OR’s operations and
finances. A united effort by the owners, the Board of Directors and our staff
resulted in that the overall target of The Plan regarding cash position was
reached at mid-year 2015, a year-and-a-half ahead of schedule. 

OR’s role is delivering good services at a fair price. OR’s subsidiaries –
Utilities, ON Power and Reykjavik Fiber Network – are performing well in this
respect and are aiming for constant improvement. 

The conditions

The owners’ resolution is made in accordance with Reykjavik Energy’s owners’
policy, which presumes the BoD passes such a motion for owners’ ratification.
The policy includes financial parameters that shall be fulfilled before and
after dividend is paid. 

These are the conditions:

                          2016 - 2018   2019 -
1. Current ratio            >1.0    >1.0
2. Equity ratio             >35%    >40%
3. FFO interest coverage    >3.5    >3.5
4. RCF / net debt           >11%    >13%
5. FFO / net debt           >13%    >17%
6. Max dividend payment      ≤50%       ≤50%  

According to The Plan, which OR has operated by since 2011, no dividend is paid
for its duration. The Plan is in effect until year-end 2016. 


         Contact:
         Bjarni Bjarnason
         CEO
         +354 516 7707