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Landsvirkjun pays 50mn USD dividends for 2020

Two new executive vice presidents have been appointed to Landsvirkjun, Ásbjörg Kristinsdóttir and Jóna Bjarnadóttir.

Ásbjörg Kristinsdóttir and Jóna Bjarnadóttir join executive board of Landsvirkjun

Ásbjörg will be executive vice president of Project Planning and Construction. She has worked at Landsvirkjun intermittently since 2002, recently as executive director of Project Planning and Construction. Ásbjörg supervised building of the Búrfellsstöð II Hydropower Station, the first woman in Iceland to supervise such a project. She has a PhD in Engineering Management from MIT.

Jóna will be executive vice president of the new Community and Environment Division. Jóna started work at Landsvirkjun in 2014, and since 2017 she has led the Environment and Resources department. She has a Master’s degree in Environmental Management and Policy from Lund University. Jóna has extensive experience of environmental issues and cooperation with stakeholders.

As Ásbjörg and Jóna take up their new positions, there will be other organisational changes at Landsvirkjun. Einar Mathiesen, who used to lead the Energy Division, will take on the new Wind and Geothermal Division.

In addition Gunnar Guðni Tómasson has taken over as executive vice president of the Hydropower Division, having previously headed Project Planning and Construction.

Following these changes, eight executive vice presidents will sit on the Landsvirkjun Executive Board, with gender parity for the first time in the company’s almost 56-year history.

The CEO of Landsvirkjun signed a memorandum of understanding on February 23rd on behalf of the company, launching negotiations for the sale of Landsvirkjun’s shares in Landsnet to the government. A change in ownership of Landsnet has been underway for some time.

The CEO of Landsvirkjun signed a memorandum of understanding on February 23 on behalf of the company, launching negotiations for the sale of Landsvirkjun’s shares in Landsnet to the government. A change in ownership of Landsnet has been underway for some time. 

Landsnet operates the Icelandic transmission system and control of power systems. It is owned by four power companies: Landsvirkjun (64.73%), RARIK (22.51%), Orkuveita Reykjavíkur (6.78%) and Orkubú Vestfjarða (5.98%). All parties signed the memorandum of understanding, as did the Minister of Finance and Economic Affairs and the Minister of Tourism, Industry and Innovation on behalf of the Government.

The Icelandic Government decided in December 2018 to start discussions to ensure the direct state ownership of Landsnet and established a preparatory work group. The memorandum of understanding signed today states that the parties agree on the importance of securing that that the change in ownership will not negatively affect the financial strength of the sellers, the buyer, or the interests of Landsnet. The parties’ goal is to reach an agreement before the end of the year.

“We at Landsvirkjun think it is sensible to fully distinguish between owners of the electricity transmission system on the one hand and power generation on the other hand, even though it is not required by law,” says Hörður Arnarson, CEO of Landsvirkjun. “In the long run, it is not optimal that Landsnet is owned by power generators and distributors. One argument is that the independence of the transmission system will enhance equality between parties in the market. We enter the negotiations optimistic and see the decision as a positive step for the ongoing development of the electrical power system in Iceland.”

Key figures from the consolidated financial statements

Profit before unrealized financial items amounted to USD 138.7 million compared to USD 176.0 million in the previous year and decreases by 21.2% between years.

The profit for the year amounted to USD 78.6 million but was USD 114.9 million in the previous year.

Operating revenues amounted to USD 453.5 million and decrease by USD 56.1 million (11.0%) from the previous year.

Net debt decreases by USD 15.7 between years and was USD 1,675.8 at year end. Interest expenses decrease by USD 11.9 million between years.

Cash flow from operating activities amounted to USD 234.1 million, a decrease of 20.9% from the previous year.

‘’Landsvirkjun’s operations and results were inevitably affected by the pandemic during 2020 which had a substantial effect on the economy in Iceland and the rest of the world. Many of our customers reduced their manufacturing output due to decreasing demand and product prices. There was also a large price decrease in energy markets, although that development saw a reversal late in the year. Some of Landsvirkjun’s energy contracts are linked to aluminium price and electricity price on the Nord Pool market.

The year 2021 starts well as prices on aluminium and Nord Pool markets increase between years. There was a positive development earlier this week when Landsvirkjun signed an amendment to its current power purchase agreement with its oldest customer, Rio Tinto Iceland Ltd., which strengthens the operations of the aluminium smelter over the coming years and ensures the predictability of Landsvirkjun’s revenue stream.

Landsvirkjun is a pillar of the Icelandic economy. We have a great responsibility which is why we have worked hard to improve the company’s debt position over the past decade or so. As a result of this work we can now support our customers by offering them a temporary discount on energy prices and take part in the economic recovery by launching various construction, maintenance and research and development projects nationwide.

Profit before unrealized financial items, which is the measure which best reflects the company’s core operations, decreased by 21% between years. The largest effects of this decrease were due to a reduction in energy sales, special terms for our customers and the connection of aluminium- and Nord Pool prices to our energy prices. Operating revenues decreased by 11% and cash flow from operating activities decreased by 21%. However, it was positive to see that we managed to keep reducing net debt at the same time. The company’s operations went well despite this external turbulence. Power station operations were good. Our customers are increasing productions despite the current economic difficulties and Landsvirkjun sees various future opportunities, for example in green hydrogen production, eco-friendly industrial parks and other green innovation like the Orkídea project in southern Iceland, Blámi on the Westfjords and EIMUR in northern Iceland. The future looks bright despite the current difficulties.“

financial-statements-lv-2020-1.pdf

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Study shows shipping green hydrogen from Iceland to Rotterdam to be realistic before 2030

Landsvirkjun‘s credit rating upgraded

Landsvirkjun’s first quarter 2021 results

Study shows shipping green hydrogen from Iceland to Rotterdam to be realistic before 2030

Landsvirkjun‘s credit rating upgraded

Landsvirkjun’s first quarter 2021 results

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