Lower expenses, higher aluminium price, better results

31. may 2021


Orkuveita Reykjavíkur’s (Reykjavík Energy; RE) results from operations was good in the first three months of year 2021. Both decreased expenses and increased revenues explain in Q1 2021 than for the same period the previous year. In addition, aluminium price increased significantly during the period which affects financial items in the quarterly financial statements, which has a positive result of ISK 5.9 billion.

Today, Reykjavík Energy’s interim consolidated financial statements for Q1 2021 were approved by the company’s Board of Directors. Besides the parent company, the RE Group comprises Veitur Utilities, ON Power, Reykjavik Fibre Network, and Carbfix.

Lower operating expenses

Increase in RE’s payroll expense, in line with collective pay agreements, was more than outweighed by reduced other operating expenses. Total operating expenses for Q1 decreased year-on-year by ISK 223 million or 4.7%. Revenues from all segments of operations increased and EBIT amounted to ISK 5.9 billion compared to ISK 5.5 billion for Q1 2020.

Not all plans for increased investment to counteract the effect from the Coronavirus pandemic bore fruit in 2020, and RE’s and its subsidiaries’ cash position has never been as strong as it is now. Some of these plans are now coming to fruition and the strong cash position is helpful, as considerable costs are associated.

Significant fluctuations in aluminium prices

Aluminium prices decreased steeply in the beginning of COVID-19, one year ago. As some of RE’s power purchase agreements are connected to aluminium price, their book-value decreased with adverse impact on RE’s calculated results. The tables turned in Q1 2021. The year-on-year shift amounts to ISK 10,3 billion, which is the largest factor in the swing in RE’s bottom-line results between years 2020 and 2021.

Bjarni Bjarnason, CEO:

It is gratifying to see our firm grip on operating costs so clearly manifested in better results, as external conditions improve. We are also achieving good results in other areas of our operations, apart from the financial. Utilities operations are reliable and we have managed to restrain tariffs, power plants are performing flawlessly, the fibre network is connected to ever increasing number of households and companies, and in recent weeks and months Carbfix has received remarkable wind in its sails. RE’s operations are broad, and I applaud our staff and managers for their care for efficiently suppling the important service that is entrusted to us.

Key financial figures

Key financial figures for the Reykjavík Energy Group can be found on our website along with financial targets.

The url is or.is/en/finance/key-financial-figures/

OR Interim Financial Statements Q1 2021