Reykjavík Energy’s Operations Growing
28. aug 2023
Orkuveitan
Reykjavík Energy’s (Orkuveita Reykjavíkur; OR) interim consolidated financial statements through Q2 2023 show ongoing considerable investments, rising capital costs, and effects of aluminum price having dropped significantly from the previous year. Revenues have also grown and working capital from operation increased compared to the first half of year 2022. Profit for the period amounted to ISK 1.5 billion.
The interim consolidated financial statements for the Reykjavík Energy group, comprising Veitur Utilities, ON Power, Reykjavík Fibre Network, and Carbfix as well as the parent company, were approved by OR’s board today.
Substantial investments – debt funding is going well
In total, the group’s investments amounted to ISK 10.3 billion in the first six months of the year. It is roughly on par with the same period in 2022. Veitur Utilities’ investments are the most extensive.
In addition to increasing interest expenses, the interim results show the negative effects of lower aluminum prices. The average price for the period has dropped by about one quarter year-on-year. In addition to the decline in income, the change in the value of long-term contracts for the sale of electricity linked to the price of aluminum is also accounted for under financial expenses. The negative effects in the interim results are evaluated to be ISK 2.6 billion. The effect of all wage agreements, which were negotiated in the first half of the year, along with the increase in number of employees, increase salary costs. The increase in number of employees is, among other things, due to the scale-up of Carbfix’ operations, but there is a great demand for the company’s method for carbon sequestration around the world.
Working capital from operations increased between years from ISK 13.6 billion in the first half of 2022 to ISK 13.9 billion this year.
Debt funding for the year has progressed according to plan. OR has raised ISK 10 billion though issuance of green bonds. The financing in the second half of the year will largely be based on foreign borrowing. In the coming quarters, financing is also planned through the issue and sale of new equity in Carbfix and Reykjavík Fibre Network.
Sævar Freyr Þráinsson, CEO
Extremely exciting times are ahead for Reykjavík Energy and all group companies. OR’s board and management of the group are currently working on a new corporate strategy, which will be our guide for the future. At the same time, the basic services provided to households and businesses by the utility companies Veitur and Reykjavík Fibre Network are reliable. OR and ON Power are looking at interesting options for growing energy production from geothermal and wind to support the energy transition and the growth of the community.
Now, almost a decade after the first fast charging station, ON Power’s leadership in serving EV owners remains undisputed. Veitur Utilities are electrifying ports because it matters a lot how we succeed on climate issues. Besides the pioneering work of Carbfix, the OR group is now among leading Icelandic companies that have had their climate goals confirmed by the Science Based Targets initiative. The goals we have set for ourselves mean that we will make increasing demands on ourselves and on our suppliers for a lower carbon footprint of respective products and services.
