Reykjavik, 2014-03-21 14:45 CET (GLOBE NEWSWIRE) -- Cost-cutting in Reykjavik Energy’s operations and the Plan, that the Board of Directors and the Company’s owners (The City of Reykjavik, Akranes Township and Borgarnes Municipality) approved in year 2011, have returned considerably better results than expected. The Plan, extends through year 2016 and when initiated Reykjavik Energy received a subordinated loan from its owners to avoid cash depletion.
Now, half way through the Plan’s, as the financial statements of Reykjavik Energy for 2013 approved by the Board today show, the Company has successfully “cashed in” over ISK 42 billion of the total ISK 51 billion the Plan is to return.
The result of the Plan at year-end 2013 is roughly ISK 5 billion above target and more than 80% of the overall target has already been realised.
The cost-cutting proves sustainable and make basis for Reykjavik Energy’s continuously improving operations results. The Company’s management clearly notices that this turnaround doesn’t go un-noticed by financial institutions, domestic and foreign. In 2011, all doors to new loan facilities were closed. Now, on the contrary, representatives of international financial institutions have contacted Reykjavik Energy with future business in mind.
EBITDA increasing and a greatly improved equity position
· In real terms, cost of Reykjavík Energy’s operations has decreased by ISK 2.1 billion from 2009 and is nominally similar now as it was then.
· EBIT in the year 2013 amounted to ISK 17.2 billion.
· Profit in the year 2013 after taxes and financial items was ISK 3.3 billion.
· EBITDA amounted to ISK 26 billion, was ISK 25 billion in year 2012.
· Net debt decreased in year 2013 by ISK 38.7 billion. Net debt at year end was ISK 186 billion compared to ISK 234 billion four years ago.
· Equity increased by 34% from last year, went from ISK 61 billion at year end 2012 to ISK 81 billion at year end 2013.
· Equity ratio increased from 20.4% to 28.6% between years.
· Reykjavik Energy does not pay dividends for the year 2013; the Plan does not assume any dividends through 2016, while it is in effect.
Bjarni Bjarnason, CEO of Reykjavik Energy:
Reykjavik Energy’s operations results are good, and they had to be. Extensive amortisations were due in 2013 and important for the Company being able to keep its commitments. This was achieved, and then some.
The financial position of the Company improves rapidly and with a firm grip on operating cost we have been able to improve operations results year by year.
The resolve of Reykjavik Energy’s staff, management, Board and owners in following the Plan through, has been exceptional. Now we are harvesting from our hard work. At the same time we have managed to ensure good utility services.
At the beginning of year 2014, Reykjavik Energy underwent fundamental changes in the group’s structure, due to provisions in the Electricity Act; the provisions obligating unbundling of licensed and competition operations. It is challenging to maintain the achievements in operations under changed conditions. The loan burden is still heavy, even though it is considerably lighter than before. Solid operations of Reykjavik Energy and robust and good service will serve the Company’s customers best in the long run.
Managers’ overview
All amounts are in ISK millions at each year’s price level.
| Operations in 2013 | 2009 | 2010 | 2011 | 2012 | 2013 |
| Revenues | 26,013 | 27,916 | 33,626 | 37,905 | 39,209 |
| Expenses | (13,042) | (13,964) | (12,391) | (12,861) | (13,126) |
| EBITDA | 12,970 | 13,951 | 21,235 | 25,044 | 26,084 |
| Depreciation | (7,814) | (7,962) | (8,881) | (10,371) | (8,927) |
| EBIT | 5,157 | 5,989 | 12,354 | 14,673 | 17,156 |
| Realised financial income and (expenses) | (4,873) | (3,558) | (3,621) | (5,993) | (4,664) |
| Result before unrealised financial income and (expenses) | 284 | 2,431 | 8,734 | 8,680 | 12,492 |
| Unrealised financial income and (expenses) | (4,198) | 14,335 | (16,041) | (12,511) | (1,570) |
| Result before income tax according to the interim statements | (3,914) | 16,766 | (7,307) | (3,830) | 10,922 |
| Income tax | 1,398 | (3,037) | 6,751 | 1,535 | (7,572) |
| Result of the period | (2,516) | 13,729 | (556) | (2,295) | 3,350 |
Contact: Mr. Bjarni Bjarnason CEO Tel: +354 516 7707
