Reykjavík Energy‘s Finances on a Strong Path
Orkuveita Reykjavíkur
Reykjavík Energy recorded a profit of ISK 4.9 billion in the first six months of the year. This is stated in the company’s reviewed interim consolidated financial statements, approved by the Board today. In addition to the parent company, Reykjavík Energy comprises Veitur Utilities, ON Power, Reykjavík Fibre Network, and Carbfix.
This result is somewhat stronger than in the same period last year, when profit amounted to ISK 4.3 billion. In the first half of the year, operating expenses rose by ISK 340 million while operating revenues increased by ISK 973 million, during the same period. This occurred despite a year-on-year decline in revenues in Q2.
Significant Investments in Infrastructure
The main reason for the revenue contraction in the second quarter was lower income from the district heating operations, which constitute the largest utility service within the group. Nevertheless, it is essential to continue building reserves so the heating utility can meet increasing peak demand. Significant investments are underway across the group’s companies, totalling ISK 12.9 billion in the first half of the year. The most important investments relate to the maintenance and development of utility systems – including reinforcement of the electricity distribution network in support of the energy transition – as well as preparations for new energy generation.
Cash flow from operations, which helps to fund these investments, continued to increase compared to previous years, amounting to ISK 15.9 billion in the first six months. High interest expenses on investment loans continue to affect the group’s results, but discussions are ongoing regarding favourable financing for the diverse green projects Reykjavík Energy has in the pipeline.
CEO Sævar Freyr Þráinsson:
“There is good progress in the green development projects that Reykjavík Energy is leading. In the first half of this year, a major step was taken as the operations of ON Power’s Hellisheiði Power Plant became virtually carbon neutral, delivering around 10% of Iceland’s overall climate targets. The Carbfix carbon capture and storage at the plant not only mineralises carbon dioxide but also hydrogen sulphide, generating significant operational savings.
Research has also begun into potential wind energy utilisation at Dyravegur in Mosfellsheiði, further geothermal development in the Hengill area, and carbon capture at Þorlákshöfn in Ölfus.
It is a great advantage to have robust and stable operations when engaging in research of this kind, as investments in research are inherently risky; if the results were already known, there would be no need for research.
Story Continues
At the same time, we are strengthening and reinforcing all our utility systems. There is considerable development across our service areas. Often this takes place within older residential areas, which is advantageous in the broader context but frequently costly for Veitur.
We are satisfied with the performance in the first half of the year and will continue with determination to enable a sustainable future.”
Managers‘ Overview
Contact:
Snorri Hafsteinn Þorkelsson, CFO
+ 354 516 6100
snorri.hafsteinn.thorkelsson@orkuveitan.is
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