Progress in Climate and Energy Affairs

27. mar 2024


Reykjavík Energy (RE; Orkuveita Reykjavíkur) financial position according to the 2023 financial statements is a promising start for the transformation projects that the company and Icelandic society are facing. This is according to Sævar Freyr Þráinsson, CEO, who is implementing the company‘s new overall strategy and introducing a new organisational structure.

Profit but High Financial Costs

Reykjavík Energy operated with a profit of ISK 6.4 billion in 2023, and the year's investments amounted to ISK 29.2 billion. The consolidated annual financial statements of RE were approved by the Board of Directors today. In addition to the parent company, RE includes Veitur Utilities, ON Power, Reykjavík Fibre Network, and Carbfix. Revenues increased by 10.1% year-on-year, EBITDA by 3.8% but cash flow from operations almost stand still. Interest expenses increased by 29.7% between 2022 and 2023, with most of the borrowed capital sourced from the domestic market.

The BoD proposes to the annual meeting that a dividend of ISK six billion be paid, with ISK two billion being conditional upon the plans to sell shares in Reykjavík Fibre Network and Carbfix.

The consolidated annual financial statements of Reykjavík Energy are made in accordance with IFRS standards and contain, for the first time, accounting in accordance with the EU‘s Taxonomy directive. Reykjavík Energy also issues its 2023 Green Finance Allocation and Impact Report today with auditor‘s assurance.

A Turning Point

Significant changes were in Reykjavík Energy‘s leadership in 2023, and late in the year, the BoD approved for its part a new overall strategy. Sævar Freyr Þráinsson took over the CEO position almost a year ago and says the new strategy marks a turning point. He states that energy transition is both one of the biggest and most important challenges in the history of mankind but also complex and urgent. "Energy transition does not adequately describe the opportunities that we as a society possess," says Sævar Freyr. "It's about changing production methods, transportation, general lifestyles, and finding new ways to propel societies forward to greater success – in harmony with nature. We at Reykjavík Energy are ready to take on the challenges that Iceland and the whole world face," says Sævar Freyr Þráinsson, CEO.

Alongside introducing the new strategy, Reykjavík Energy‘s brand has been updated, and a new organisational structure of RE‘s parent company has been introduced to staff.

Leading in Climate Issues

In 2023, Reykjavík Energy took leadership among companies in climate issues. RE now has an A- rating from the international Carbon Disclosure Project. Furthermore, the Science Based Targets initiative has confirmed that RE‘s climate goals align with the Paris Agreement's objectives. Yesterday, Reykjavík Energy celebrated that its climate accounting, which is done according to the international ISO-14064-1 standard, received international independent certification. This is the first time an Icelandic company has received such wide recognition of the validity of its climate accounting.

Still, most of RE‘s greenhouse gas emissions originate in the steam utilised in the power plants in the Hengill area, but the capture and sequestration of carbon dioxide at Nesjavellir began last year. By 2025, emissions from the Hellisheiði Power Plant will be negligible. The goal is to achieve net-zero targets for own operations by 2030 and for the supply chain by 2040.

Price Changes in Licensed Services

The graph attached shows the development of the tariff for licensed services of Reykjavík Energy, operated by Veitur Utilities. Combined, they have decreased significantly in real terms since it became mandatory to unbundle energy operations. The consumer price index is shown as a flat line, and the tariff development from the beginning of 2014 is measured against it.

Reykjavik Energy Consolidated Financial Statements 2023