Landsvirkjun s Q1 accounts

Transcription

1 Landsvirkjun s Q1 accounts Highest revenue quarter recorded in financial history of the Company Key figures from the interim financial statements Operating revenues amounted to USD million and increase by USD 22.4 million (18.8%) from the same period prior year. EBITDA amounted to USD million. EBITDA ratio is 74.6% of revenues compared to 74.3% in the same quarter prior year. Profit before unrealized financial items amounted to USD 55.9 million compared to USD 43.8 million in the same quarter prior year which is an increase by 27.7% between periods. The profit for the period was USD 9.1 million compared to USD 49.4 million in the same period prior year. Net liabilities decreased by USD 4.6 million from the beginning of the year and amounted to USD 2,038.1 million at the end of March. Cash flow from operations amounted to USD 81.1 million which is an increase of 22.4% compared to the same period prior year. Hörður Arnarson, CEO: First quarter of 2018 is the highest revenue quarter recorded in the Company s history, this is primarily due to increased energy sales and higher aluminium prices. Profit before unrealized financial items increased by nearly 28% from the same period prior year. The favourable news were received in the quarter that Moody s upgraded Landsvirkjun s credit rating by one notch to Baa2 which reflects improved operations position and future outlook of the Company. Theistareykir Geothermal Power Station is currently at full 90 MW capacity, expansion of Burfell Hydropower Station is under construction and it is expected to be powered up in midsummer The Company s capital formation (cash flow from operations) during Q1 fully sustained these investments and furthermore decreased net liabilities from the beginning of the year.

2 Operations Development of operating revenues Operating revenues increased by USD 5 m million between quarters. Compared to Q1 in 2017 the revenues have increased by a total of USD 22 million. This increase is mainly explained by higher aluminium prices, increased energy sales and strengthening of the Icelandic Krona in relation to USD. A part of the Company s electricity sales contracts are linked to aluminium prices and revenues related to the wholesale market are in ISK. EBITDA and EBITDA ratio 74.3% 69.9% 71.2% 70.7% 74.6% EBITDA EBITDA ratio Operating profit of the Group before depreciation, EBITDA, amounted to USD 105 million in Q1. The EBITDA trend has been in sync with the Company s revenue trend. Strengthening of ISK increased costs in USD but effects of the movements of the exchange rate of ISK are mostly balanced in the Company s EBITDA. 2

3 Profit before unrealized financial items Profit before unrealized financial items is the criterion used by Landsvirkjun in evaluating the Company's core operation. The profit amounted to USD 56 million in Q1 but was USD 44 million in the same period in This increase between period is mainly explained by increase in revenues. Items affecting profit before unrealized financial items in Q Operating revenues Operating and maintainance costs EBITDA Depreciation and impairment Financial items Profit before unrealized financial items Extensive construction period about to come to an end Landsvirkjun s focus in the last years has been on decreasing debt. Net debt are interest bearing debt after deducting cash and cash equivalent. The Company has in the last years carried out significant investments but in Q investments amounted to USD 43 million. Constructions at Theistareykir and Burfell will be completed in The Company s capital formation (cash flow from operations) during Q1 amounted to USD 81 million and thus sustained the period s investments. Net debt decreased by USD 5 million from the beginning of the year. 3

4 Net debt and equity ratio 39.9% 44.7% 45.4% 45.8% 44.0% 2,190 1,985 1,960 2,043 2, Q Net debt Equity ratio The Group s cash amounted to USD 328 million at the end of Q1 and increased by USD 17 million (19%) from the same period in The development can be seen in the graph below. Cash flow from operating activities has sustained the last years investing activities which is the prerequisite of the Company s improved debt level. Operating outlook Landsvirkjun's results will, as before, for the most part be subject to the development in aluminium prices, interest rates and foreign exchange rates. Landsvirkjun's income is partly linked to aluminium prices, part of the Company s loans carry floating rate interests and part of the loan portfolio is in other currencies than USD. Changes in these factors therefore affect the future earnings of Landsvirkjun but systematic steps have been taken to minimize that risk. Reykjavik, 24 May 2018 Further information is provided by: Rafnar Lárusson, CFO Tel

5 About the interim financial statements The Interim Financial Statements of Landsvirkjun are prepared in accordance with International Financial Reporting Standards (IFRS) and are presented in USD which is the parent Company s functional currency. Key figures from the interim financial statements in USD thousand: About Landsvirkjun Operation Operating revenues , , , , ,638 Realised aluminium hedges... ( 1,648) ( 653) 1,209 2,290 3,408 Total operating revenues , , , , ,046 Operating and maintainance expenses... ( 35,893) ( 30,544) ( 23,296) ( 22,410) ( 22,458) EBITDA ,269 88,268 82,207 89,255 82,588 Depreciation and impairment loss... ( 30,623) ( 29,180) ( 29,273) ( 27,573) ( 27,416) EBIT... 74,646 59,088 52,934 61,682 55,172 Financial items... ( 18,720) ( 15,307) ( 15,108) ( 9,655) ( 21,066) Profit before unrealised financial items... 55,926 43,781 37,826 52,027 34,106 Unrealised financial items: Fair value changes in embedded derivatives... ( 39,556) 42,555 ( 3,809) ( 4,679) ( 32,568) Fair value changes in other derivatives... 16,879 ( 8,110) ( 155) ( 7,306) ( 1,231) Unrealised foreign exchange difference... ( 18,856) ( 3,568) ( 26,896) 44,791 2,196 ( 41,533) 30,877 ( 30,860) 32,806 ( 31,603) Profit before income tax... 14,393 74,658 6,966 84,833 2,503 Income tax... ( 5,328) ( 25,277) ( 3,522) ( 29,253) 75 Profit... 9,065 49,381 3,444 55,580 2,578 Balance sheet 31/03/ /03/ /03/ /03/ /03/2014 Total assets... 4,712,186 4,472,638 4,261,913 4,202,682 4,496,933 Total equity... 2,072,166 2,017,992 1,920,232 1,746,998 1,663,121 Total liabilities... 2,640,020 2,454,646 2,341,681 2,455,684 2,833,812 Net liabilities... 2,038,072 1,965,833 1,974,816 2,028,575 2,403,087 Key figures Cash flow from operating activities... 81,142 66,285 68,711 82,850 69,046 Investing activities... ( 42,582) ( 67,732) ( 22,248) ( 14,403) ( 51,853) Financing activities ,679 95,757 ( 64,717) ( 52,293) ( 80,923) Total liquidity , , , , ,406 Equity ratio % 45.1% 45.1% 41.6% 37.0% Return on equity % 5.9% 1.8% 7.9% (0.3%) Interest cover (EBITDA/net interest expenses) x 5.26x 4.68x 4.05x 3.57x Net liabilities / EBITDA x 6.39x 6.28x 5.99x 7.42x Landsvirkjun was established in the year 1965 and is an energy production company owned by the Icelandic nation. Landsvirkjun s objective is to maximize yield on the energy sources entrusted to the Company with emphasis on sustainable utilization, creation of values and efficiency. The Company produces 70% of all electricity in Iceland from renewable energy resources, hydroelectric energy, geothermal energy and wind energy. The Company is at the same time leading in sustainable utilisation of energy resources and contributes to increased knowledge, innovation and technical development. 5