HS Orka’s profits bounce back

8 February 2010

Icelandic geothermal company HS Orka’s profit for 2009 amounted to ISK6.8bn ($53m) compared to a loss of ISK11.7bn ($90m) for 2008.

After taking into account income and expenses recognised under equity, comprehensive income for the year amounted to ISK8.15bn ($64m) compared to a loss of ISK4.7bn ($36m) for 2008, the company’s annual financial statement shows.

The company attributes the increase in comprehensive income mainly to a decrease in foreign exchange loss and fair value changes of embedded derivatives. Its equity ratio was 33.5 per cent, whereas it was 16.3 per cent at the beginning of the year.

According to the statement of comprehensive income, HS Orka’s operating revenue in the year amounted to ISK6.2bn ($48m) compared to ISK5.4bn ($42m) for 2008. The increase in revenue is mainly due to service fees for services provided to HS Veitur, said HS Orka. Other revenues amounted to ISK784m ($6m) and are due to sale of land and geothermal rights, the company added.

‘Despite a difficult year for the Icelandic economy, HS Orka has been able to produce a very positive outcome for this year in terms of profit and an increase in the equity ratio from 16.3 per cent to 35.5 per cent,’ said Julius Jonsson, CEO of HS Orka. ‘The main reasons for the improved results are the increase in the aluminum price and a more stable Icelandic krona, and it’s important that this development continue.’

Production cost and cost of sales amounted to ISK4.4bn ($34m) compared to ISK3.1bn ($23m) for the previous year. The increase in production cost and cost of sales is due to increased cost of production, sale and distribution of electricity, in addition to cost of services provided to HS Veitur, said HS Orka. Aluminum prices increased during 2009, according to the company, and the future value of aluminum plant agreements increased by in excess of ISK7m ($50,000).

The weakening of the Icelandic krona against foreign currencies also lead to an ISK1.25bn ($9m) foreign exchange loss whereas in the previous year foreign exchange loss amounted to ISK10.4bn ($80m).

According to the balance sheet as of December 2009, HS Orka’s assets amounted to ISK42.1bn ($327m) and assets increased by ISK5.6bn ($42m) from the beginning of the year, which the company said is mainly due to fair value changes in derivatives and revaluation on operating assets.

HS Orka is the largest privately owned energy company in Iceland, with an installed geothermal power capacity in total is 175MW from the Svartsengi combined heat and power plant and Reykjanes power plant.

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Tags: geothermal

This story was published on Monday, February 8th, 2010 at 5:38 pm and is filed under Europe, companies, geothermal. You can follow any responses to article entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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