Solid operating results of Reykjavík Energy

ISK 4.7 billion profit was made from the activities of the Reykjavík Energy group (Orkuveita Reykjavíkur; OR) through Q3 2022. Operating results and cash flow from operations are stable, but calculated figures due to volatility in aluminium prices and domestic inflation have an impact on the overall result of OR’s consolidated interim financial statements, which the board approved today. Within the group are, in addition to the parent company; Veitur Utilities, ON Power, Reykjavík Fibre Network, and Carbfix.

OR Interim Financial Statements Q3 2022

Income growth in year 2022 is mainly the result of higher aluminium prices early on. The income of all business units of the group increased year-on-year by between 3-16%. The water utility’s income increased the least, but other income, where Reykjavík Fibre Network has the most weight, increased proportionally the most. Although Reykjavík Energy has fixed a large part of the interest rates on long term debt, various effects of inflation can be seen in the interim results. These include rising prices of inputs, rising bids for construction works, and increasing indexation of index-linked loans.

Bjarni Bjarnason, CEO

Reykjavík Energy’s recent financial forecast for the years 2023-2027 reflects the strong participation of the companies in the group in important public projects in the coming years. This includes investment connected to efforts of the state and municipalities in the development of residential housing, city line projects by municipalities and the state, as well as other contributions to the energy shift.

While public authorities encourage us to invest, another arm of the central government increases Iceland’s key interest rate eightfold in less than two years. High interest rates should, other things being equal, encourage us to put off non-essential investments. These are, therefore, challenging times in the business, but hopefully the external conditions will not hamper the progressive projects we are involved in.