Landsvirkjun

Landsvirkjun’s results for the first six months of 2008

28. August 2008

Landsvirkjun’s interim financial statements is prepared in accordance with International Financial Reporting Standards (IFRS) and is in USD, the company’s functional currency from the beginning of 2008. According to the consolidated income statement, profit for the first six months of 2008 amounted to USD 83.5 million, and operating profit before financial items and taxes (EBIT) amounted to USD 138 million. Cash from operations amounted to approximately USD 76 million, and equity at the end of the period was USD 1.8 billion.
 
Key figures from the consolidated interim financial statements of Landsvirkjun (amounts are in USD thousands):
 

 

CONSOLIDATED

 

Jan. - June

 Jan. - June

Jan. - June

 

 

2008

2007

2006

 

Operating revenues

239,623

173,427

     161,502

 

Operating expenses

(101,583)

(85,221)

(84,476)

 

Profit from operations

138,040

88,206

    77,026

 

Financial income (financial expenses)

(3,614)

331,409

(221,624)

 

Profit before taxes

134,426

419,616

(144,598)

 

Income taxes

(50,977)

(111,032)

     186,028

 

Net profit

83,449

308,584

41,430

 

 

      30.6.2008

    31.12.2007

31.12.2006

 

Total assets

5,505,319

5,142,303

4,279,794

 

Equity

1,758,031

1,600,145

1,143,272

 

Liabilities

3,747,288

3,542,158

3,136,522

 

 

 

 

 

 

Cash from operating activities

76,356

64,932

90,127

 

EBITDA

189,373

125,348

                           113,277

 

Equity ratio

31.9%

31.1%

26.7%

 


Landsvirkjun’s results are for the most part attributable to fair value changes and exchange rate developments as a part of the company’s long term liabilities are in currencies other than the company’s functional currency. The positive fair value of derivatives capitalised at the end of June 2008 amounts to approximately USD 824 million when the negative fair value of the derivatives contracts that the company has entered into has been deducted. The change in the fair value of the derivatives contracts was positive by USD 223 million for the period January-June 2008, attributable for the most part to the rise of the forward market price of aluminium. The effects of fair value changes are entered in the Income Statement.
 
The company’s liquidity position is good, with cash and cash equivalents amounting to USD 137 million at the end of June. Financing during the period has gone well despite difficult conditions on loan markets. During the first six months of the year, Landsvirkjun issued bonds for the equivalent of USD 272 million. The terms during the period were 25 to 100 basis points on top of Libor interest rates. Since the end of June, the company has issued bonds for USD 140 million on terms that are around 100 basis points or less on top of Libor interest rates. Also, the company has access to a USD 400 million revolving credit facility that the company can utilise at any time. By the end of June, the company had utilised USD 50 million of this amount. The company’s cash position, together with the unused bank loan at the end of June, amounted to a total of USD 487 million. The company has thus ensured financing until the end of 2010.
 
At the end of June, the company’s total assets amounted to USD 5.5 billion, and the equity ratio was 31.9%.
 
The prospects for Landsvirkjun’s operations in 2008 are favourable. The Kárahnjúkar Power Plant is fully operational and income from energy sales to power intensive industry will increase the company’s total revenue. However, fluctuations in foreign exchange and aluminium prices will largely determine performance this year.
 
Landsvirkjun’s interim financial statements for the period 1 January to 30 June 2008 were approved at a meeting of the Board of Directors on August 27, 2008.
 
Further information can be obtained from Kristján Gunnarsson, CFO, Tel: +354 515 9000.

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