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03.05.2023

Best ever operating year for HS Orka

Oddgeir Karlsson (18)

The year 2022 was the best operating year in the history of HS Orka hf. Operating revenue amounted to 10.6 billion ISK, increasing by 14.7% from the previous year. The largest part of this is due to the high price of aluminium and price increases in the wake of energy shortages. The financial standing of the company is strong with equity amounting to ISK 28.6 billion, and its equity ratio at 41.5% at the end of the year. 

Tómas Már Sigurðsson, CEO of HS Orka:  “The annual statement for HS Orka for the year 2022 shows that the operation is sound and it gives us space for further growth. Based on the Resource Park and guided by principles of sustainability, we create value for the future with more long-term agreements and we’ve laid a foundation for ambitious future projects in the field of energy production. Thus we contribute to Iceland being able to honour its international climate obligations.” 

The expansion of the Reykjanes power station was completed and it was a success. Construction costs were well within the budget and the power station was activated three months ahead of schedule. The next large project was the renovation and expansion of the power station at Svartsengi where ground was broken in December. The financing of the project in Svartsengi was shored up with the involvement of two foreign banks and the shareholders of the company, despite turmoil in international financial markets. In total, the investment of HS Orka amounted to a little over 6 billion during the year. The volcanic eruption and seismic activity of the previous year affected neither energy production nor the returns of the year. 

Operating profits (EBITDA) amounted to 4,591 million in 2022 as compared to 3,581 million during the previous year, thus increasing by 28.2% from the previous year.  

The company’s profit before income tax amounted to ISK 87 million in 2022, as compared to ISK 2,816 million in 2021. Unrealised financial items have a significant effect on the statement, with the difference from the previous year attributable to, on the one hand, a decrease of ISK 2.4 billion in the value of embedded derivatives because of the decrease in the price of aluminium and, on the other hand, the devaluation of the krona vis-a-vis the dollar, which amounted to ISK 1.4 billion from the previous time period. 

Fixed assets increased by 5.5 billion from the previous year and the increase is mostly attributable to new investment because of the expansion of the Reykjanes power station. Current assets increased by 4 billion with a significant increase in cash in hand because of the subordinated shareholder loan provided for the project of Svartsengi. 

Interest bearing liabilities increased by 10.5 billion from the previous year. The increase is, on the one hand, due to the investment loan boost for the expansion of the Reykjanes power station and, on the other hand, due to a subordinated shareholder loan for the project in Svartsengi. 

In 2022, HS Orka issued a green financing framework for the first time and the project collection of the company has received the highest possible rating from the second opinion provider Cicero. 

Main conclusions from the annual statement of HS Orka: 

  • Operating profits (EBITDA) amounted to 4,591 million in 2022 as compared to 3,581 million during the previous year, thus increasing by 28.2% from the previous year.  
  • The operating profit for unrealised financial items was 1,461 million as compared with 723 million in the year 2021, which is a more than twofold increase from the previous year.   
  • Operating revenue amounted to 10.6 billion ISK, increasing by 1.4 billion (14.7%) from the previous year.  
  • Equity amounted to 28.6 billion at the end of the year, once a share decreases of 1.4 billion has been factored in. 
  • The total assets of the company amounted to 69 billion by the end of the year and the company’s balance sheet increases by 16% from the previous year.  
  • The financial standing of the company is strong with equity amounting to ISK 28.6 billion. The equity ratio is 41.5%. The equity ratio, including a subordinated shareholder loan, is 49.4%.  

HS Orka 2022 Sustainability Report 

HS Orka is issuing its second sustainability report in accordance with the criteria of the Global Reporting Initiative (GRI) and the report is no accessible on the website of HS Orka. It details various issues related to the effect which HS Orka has had on its environment, society and economy during the previous year. It also contains the six UN Sustainable Development Goals selected by the company for implementation within the operation. 

HS Orka’s Board of Directors 

The following individuals were elected for the board on the annual general meeting of April 26:

Adrian Pike, Chairman of the Board of Directors,  Bjarni Þórður Bjarnason, Vice-Chairman, Heike Bergmann, Board Member, Margrét Ormslev Ásgeirsdóttir, Board Member. Alternates: Ashley Hough, Mei Niu, Gunnar Jóhannsson, Margrét Sveinsdóttir 

About HS Orka 

HS Orka was founded in 1974 and since its inception it has been leading in the production of renewable energy. HS Orka is the largest energy producer in Iceland in the private sector, owned in equal parts by Jarðvarmi, a company owned by 14 Icelandic pension funds, and the British infrastructure investment fund Ancala Partners. Innovation has always been at the heart of the company, a fact most evident at the Resource Park, where the emphasis is placed on using the run-off fluid from the power plants as a resource. HS Orka owns and operates two geothermal power plants in Reykjanes, as well as a 9.9 MW run-of-river power station in Biskupstungur.