HS Orka hf announces Consolidated Financial Statements for the nine months ended September 30, 2017



Consolidated Financial Statements for the nine months ended September 30, 2017 of HS Orka hf. (the “Company”) were approved at a Board of Directors meeting on 8 November 2017. The financial statements of HS Orka hf. are prepared in accordance with International Financial Reporting Standards as adopted by the European Union and are stated in Icelandic krónur (ISK). The financial statements can be found here.

Net profit for the period was ISK 3,179 million, up from a profit of ISK 2,714 million in the same months of 2016, with the movement predominantly due to non-cash gains in the period further discussed below. 

Operating revenue was ISK 5,442 million against 5,119 million in the first nine months of 2016, with the increase primarily due to a continuing growth in the sale of electricity to the retail market. Aluminum prices have been moving favorably in the period leading to increased revenue from aluminum based sales but is somewhat offset by the strengthening of the Icelandic Krona against the US dollar. There has been a decrease in the sale of geothermal water due to unusually warm weather in 2017. 

Production cost increased by 18% to ISK 4,898 million in the first nine months of 2017 mostly because of increase in power purchases and a rise in maintenance of steam gathering system at Reykjanes Power Plant. 

Net finance-related income increased to a gain of ISK 2,812 million (2016: ISK 2,135 million). This was driven primarily by an increase in future aluminum prices during the year, resulting in an increase in the fair value of embedded derivatives in power purchase agreements of ISK 2,864 million (2016: ISK 1,653 million). Currency gains were ISK 53 million compared to a gain of ISK 597 million in 2016.  

During the third quarter of 2017 HS Orka finalized 112 million EUR financing with Arion bank hf. Primary uses of loan proceeds inclusion construction of the 9.9 MW Brúarvirkjun hydro project, drilling and other field development activities at Reykjanes, and the retirement of then outstanding loans.

A total comprehensive profit of ISK 3,206 million was recorded against ISK 2,501 million profit in the first nine months of 2016. The Company’s equity ratio is 71.7% compared to 66.7% at year-end 2016.

Further information can be provided by Ásgeir Margeirsson, Managing Director of HS Orka hf., tel. 520 9300 / 855 9301.