Landsvirkjun’s results for the first six months of the year 2016

Key figures from the interim financial statements                                

• Operating revenue amounted to USD 206.9 million, which is a USD 8.8 million (4.1%) decrease compared to the same period in 2015.

 

• EBITDA amounted to USD 155.2 million. EBITDA ratio is 75.0% of revenue compared to 78.5% in the same period in 2015.

 

• Profit before unrealised financial items amounted to USD 64.5 million compared to USD 80.0 million in the same period in 2015, a decrease of 19.4% between periods. Decreasing aluminium prices and effects of foreign exchange rates explain the decrease.

 

• The profit for the period was USD 34.8 million compared to USD 63.9 million in the same period in 2015. The decrease between periods is in part due to lower revenue, but a large part of it is traced to unrealised financial expenses. 

 

• Net debt decreased by USD 39.4 million from the beginning of the year and amounted to USD 1,946.0 million at the end of June.

 

• Cash flow from operations amounted to USD 123.8 million which is a decrease of 15.4% compared to the same period in 2015.

 

Hörður Arnarson, CEO:

“The Company’s performance in the first half of the year was good when taking into account a difficult external environment. Profit before unrealised financial items amounted to USD 64.5 million, the fourth best period in Company history. It is a sign of strong core operations and powerful cash generation that while we are currently constructing two power plants, net debt continues to decrease.

Operating revenue decreased compared to the same period in 2015, mainly due to lower aluminium prices. Prices in aluminium markets will continue to affect Landsvirkjun’s operations, but we have put an emphasis on reducing the effects of this link when contracts are renewed and new contracts are entered into. At the beginning of the year Landsvirkjun was upgraded by Standard & Poor’s to investment grade, which will contribute to a continued low interest expense, an important factor for the Company’s future operations and will give us more options to refinance debt without a state guarantee.

We are aware of strong demand for Icelandic renewable energy from various sectors. In order to increase energy generation, construction is under way at a geothermal power plant at Theistareykir and an extension of Burfell hydropower plant.”