Landsvirkjun
Record results, but concerns about the country’s energy supply
Key figures from the interim financial statements
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Profit before unrealized financial items was $290 million, compared to $228.5 million in the same period last year. This is an increase of 26.9% despite a very strong result last year.
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Profit for the period was $159.4 million, compared to $203.8 million in the same period last year. Landsnet’s profit was part of the results last year. Landsnet was sold at the end of 2022.
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Operating income was $495.4 million, an increase of $62 million from the same period last year.
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Net debt decreased by $283.2 million year-to-date and stood at $564.8 million at the end of September.
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Interest expense in excess of interest income decreased significantly and amounted to $9.2 million, compared to $23.6 million in the same period last year.
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Cash flow from operations was $362.6 million, an increase of 24.8% compared to the same period last year.
Hördur Arnarson, CEO:
“2023 is on track to be the best operating year in Landsvirkjun’s history. Profit from the core business rose by around 27 percent in the first nine months of the year compared to 2022, which was a record year at the time. Electricity revenues rose by around 14% compared to the previous year, despite significant declines on the international energy and raw materials markets, where prices for industrial customers are partly linked to these markets. This can be explained by hedging that delays the impact of these declines. Interest expenses, which exceed interest income, continued to decline as in previous years as debt decreased and interest income now increased. Today, 77% of our debt has fixed interest rates, meaning it does not change if interest rates are increased in the financial markets.
Cash flow from operations was nearly $363 million in the period, up nearly a quarter from the same period last year. Net debt fell further by approximately $283 million, and the key net debt to EBITDA ratio has now fallen to 1.1, which is among the best levels of comparable companies. As previously mentioned, this improved financial position means that the company’s ability to pay dividends to its owners, the people of Iceland, has significantly improved.
The story goes on
Although Landsvirkjun’s operations currently continue to exceed expectations, concerns about the country’s energy issues are emerging. Due to the energy transition and general economic growth, increasing energy demand is foreseeable, and there is now an urgent need to build additional electricity generation capacity to meet this demand. At Landsvirkjun, we are currently working hard to obtain the necessary permits to begin construction of new power plants, which are a prerequisite for the significant changes to come.”
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