Landsvirkjun´s financial situation
20. October 2008
The economic environment in Iceland is challenging at the moment, as the three biggest banks have been taken over by the government. Measures have been taken to restore confidence and Landsvirkjun expects things to improve gradually over the coming months.
However, Landsvirkjun's operations have not been affected directly. Of course Landsvirkjun has been downgraded in line with the Republic but is regardless in a very good position. The Company has a very modern asset base of hydro and geothermal power plants. Landsvirkjun´s functional currency is USD, since 70% of revenues are denominated in USD coming from strong international entities. The Company has a sound cash position and cash flow is improving. Capex cost is much lowered after the completion of the Karanhnjukar Hydropower Project and maturities of long-term debt are well distributed. In addition, Landsvirkjun has a USD 400 million Revolving Credit Facility for back-up, which is largely undrawn. As a result Landsvirkjun has secured funding throughout 2009.
Please review the attached paper on Landsvirkjun and the new presentation that explains the Company's financial situation.