Reykjavik Energy’s operating results remain solid and stable

12. mar 2021


  • Consolidated Financial Statements 2020 approved today.
  • Emergency loan from owners due to the economic crisis fully retired.
  • Owners’ guarantees on loans significantly reduced – plans to end this type of borrowing.
  • Stable dividends – ISK 4 billion proposed this year.

Reykjavik Energy’s (Orkuveita Reykjavíkur; RE) finances and operations were solid for fiscal year 2020 with increased revenues, mainly due to increased sales of hot water. A cold season and increased number of connected housing led to an unparalleled 10% year-on-year increase in hot water sales. Investment was considerable, although less than expected. RE’s cash position is very strong. EBITDA and EBIT in 2020 increased from 2019, and the bottom-line result was ISK 5.6 billion, compared to ISK 6.9 billion for year 2019.

Reykjavik Energy Group comprises, in addition to the parent company, Veitur Utilities, ON Power, Reykjavik Fibre Network, and the latest addition, Carbfix, an innovation company that provides solutions combatting the climate crisis.

Reykjavik Energy Annual Report 2020 published today

Reykjavik Energy’s Annual Report 2020 is also published today. It is an integrated report, filed in accordance with international standards for corporate social responsibility. It provides a comprehensive description of environmental aspects of the Group’s operations, its social impact, and describes the governance that the consolidation complies with.

Link to the Annual Report.

Bjarni Bjarnason, CEO

Reykjavik Energy Group’s successful financial and cultural restructuring over the last decade allows us to throw our weight behind measures countering the effects the coronavirus has on economy and society. Operations are sound, results predictable, and in the last few years we have been able to considerably lower tariffs for water utilities and electricity distribution. Tariffs for district heating and wastewater have roughly been in line with inflation.

It is important, now that the state and municipalities face economic downturn caused by the coronavirus, that owners’ guarantees on RE’s loans have been vastly reduced. Over the last decade, the proportion of loans with owners’ guarantee has decreased from over 90% to 46%. Our goal is to end owners’ guaranteed borrowing. Furthermore, the emergency loan, issued to RE by its owners in 2011, in the amount of ISK 12 billion, has now been fully repaid. RE’s tax footprint for 2020 has been calculated. It was ISK 8.8 billion. We are proud of operations contributing on such a scale to our society.

Significant effect from the pandemic

The COVID-19 pandemic affected RE’s operations and activities in various ways last year and still does. RE’s Board of Directors decided to utilise the Group’s financial strength to counterbalance the economic recession. Increased number of summer- and part-time jobs were created. Planned investment was increased. Countering the effects of the pandemic, a total of ISK 6 billion, is divided between years 2020 and 2021, and distributed over Veitur Utilities’ operating areas in the South-West.

Operating expenses rose in line with inflation and increase in payroll, even though grappling with the coronavirus increased various costs. The essential nature of the basic services provided by RE’s subsidiaries, calls for more stringent disease prevention than dictated by official guidelines.

Substantial capital investment in 2021

Important preparations for various projects were hampered during 2020, in part due to the pandemic, and not all plans proceeded as scheduled. RE’s capital investment was ISK 16.8 billion versus ISK 19.4 billion in 2019. Plans are in place for increased investment for year 2021 in addition to conventional maintenance and renovation investment for power plants and utilities’ infrastructure. Substitution of approximately 160,000 meters for hot and cold water and electricity will commence, as smart metering is introduced in coming years. The refurbishment of a damaged portion of RE’s headquarters at Bæjarháls will soon be under way.

*The Group's carbon footprint increased in 2020 due to a borehole with a high CO2 concentration in steam was connected to the Hellisheidi Geothermal Power Plant. Plans are in place for sequestering all carbon-emissions from power plants.

Managers’ overview of financial and non-financial data
2015 2016 2017 2018 2019 2020 unit
Revenues 40,312 41,423 43,666 45,916 46,570 48,627 ISK Million
Expenses (15,183) (16,062) (17,285) (17,299) (18,398) (19,172) ISK Million
EBITDA 25,174 25,361 26,380 28,617 28,172 29,454 ISK Million
EBIT 14,428 14,968 17,318 18,346 16,051 16,398 ISK Million
Gender pay-gap 2.3% 2.1% 0.2% 0.0% 0.1% 0.0% Percentage
Employees’ happiness 4.3 4.4 4.4 4.4 4.3 4.4 Grade 0-5
Hot water 83 78 94 101 101 110 Million m3
3,249 3,411 3,473 3,507 3,536 3,581 GWh
Potable water 29 30 29 28 29 26 Million m3
Data over fibre
122,000 155,000 180,000 216,000 260,000 345,000 TB
Carbon footprint* 67,100 45,450 42,700 45,450 48,750 50,550 tn, CO2-equiv,
19% 34% 34% 39% 42% 48% Percentage

*The Group's carbon footprint increased in 2020 due to a borehole with a high CO2 concentration in steam was connected to the Hellisheidi Geothermal Power Plant. Plans are in place for sequestering all carbon-emissions from power plants.

Consolidated Financial Statements 2020