Finance
Since it was established, Landsvirkjun has been a driving force behind progress in the Icelandic economy. The past fourteen years have been a period of unique development which has seen the company almost continuously involved in investments, while its electricity output has tripled. Landsvirkjun has managed to fund these developments with capital from operations and with extensive borrowing on advantageous terms. No funds have been provided by the company's owners, although they are indirectly responsible for its debts.
At the beginning of 2008, Landsvirkjun adopted the US dollar as the its functional currency in line with the provisions of the International Financial Reporting Standards (IFRS), given that approximately 70% of the company's income and a large proportion of its debt are in that currency. As a result, Landsvirkjun has not been as badly affected by the exchange rate fluctuations that have had an impact on other Icelandic companies since the collapse of the Icelandic króna. Landsvirkjun's domestic income and operating costs are balanced, and its exchange rate risk regarding the Icelandic króna is negligible.
Landsvirkjun's income is largely dependent on global aluminium prices, and there is considerable risk tied to a possible fall in the price of aluminium. In order to strengthen the company's income base, which is dependent on aluminium and other risk areas, the company has implemented a rigorous risk management system.