CEO’s statement

Landsvirkjun’s Most Successful Operating Year Yet

Hörður Arnarson, CEO of Landsvirkjun
Read the 2023 Annual Report

In 2023, Landsvirkjun witnessed its most successful operational year in nearly six decades. The profit from core operations surged by 19% compared to the previous year, which had set a record. The Company’s financial standing reached unprecedented levels, with the equity ratio higher than ever and debt to EBIT ratio from operating profits either as low as or lower than that of other energy firms in the Nordic region.

However, amidst the Company’s improved performance, clouds loom on the horizon in Iceland’s energy sector. Various delays hampered energy generation projects, including an inefficient licensing process, potentially impacting energy production meeting market demands due to energy exchanges and societal growth until approximately 2027-28.

Still, hopes remain high for the commencement of the Hvammsvirkjun and Búrfell Wind Farm projects in 2024, the most advanced ventures in the Company’s development pipeline. Final preparations are underway for the extension of Þeistareykir Power Station and the Sigalda Power Station. Board approval will be sought to proceed with tenders for these projects later in the year.

The exceptional operational years of 2022-23, driven by favourable market conditions, contract renegotiations, and lucrative power contracts with energy-intensive users, were connected to price developments in Nordpool that have now expired. Landsvirkjun is projected to continue achieving good results in 2024, but the market conditions may not be as favourable until renegotiations with Alcoa conclude, and new power stations become operational.

This comprehensive annual report details Landsvirkjun’s 2023 activities and servesas a progress report on our commitments under the United Nations Global Compact agreement. By submitting this report, we reaffirm our dedication to contributing to the UN’s development goals and adhering to the organisation’s ten principles. We declare our continued support for the UN Global Compact.