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Published: 2022-02-18 15:19:50 CET
Annual Financial Report

Landsvirkjun‘s Financial Statements

Revenues have never been higher and proposal for USD 120m dividend

Key figures from the consolidated financial statements

  • Profit before unrealised financial items amounted to USD 227.1 million compared to USD 138,7 million in the previous year which is an increase of 63.7%.
  • The profit for the year amounted to USD 148.6 million but was USD 78.6 million in the previous year.
  • Operating revenues amounted to USD 558.8 million and increase by USD 105.3 million (23.2%) from the previous year.
  • Net debt decreased by USD 175 million between years and was USD 1,500.8 million at year end.
  • Cash flow from operating activities amounted to USD 323.3 million, an increase of 38.1% from the previous year.

Hörður Arnarson, CEO:

“After the uncertainty and difficulties in the company’s business environment at the beginning of the pandemic in 2020 there were very positive developments in Landsvirkjun’s operations in 2021. Profit before unrealised financial items, which is the benchmark we tend to use when evaluating the company’s core operations, was USD 227 million and increased by 64% between years. Landsvirkjun’s operating revenues increased by 23% between years and were higher than at any point in the company’s history.

The improved results can be attributed to a vast improvement in the operating environment of our industrial customers and of Landsvirkjun. Iceland’s electric power system was fully utilised towards the end of last year and demand was high from a variety of customers.

Total power sales increased by 5% between years. The average price on the wholesale market to homes and smaller companies did not increase from the previous year and was ISK 5.3/kWh while the average price to industrial customers increased by 55% and was USD 32.7/MWh. This increase is mainly due to favourable external conditions on aluminium and power markets and also because renegotiations have taken place with most of our customers. They now pay a similar price to what one can expect in those countries which we want to compare ourselves with. The improved results of last year can therefore be completely attributed to increased sales to power intensive users.

We continued along the same lines of reducing debt. Net debt decreased by about USD 175 million from the beginning of the year. The main debt ratios are now comparable to out sister companies in the Nordic countries which is an achievement we are proud of. The key benchmark net debt/EBITDA decreased substantially last year and net debt is now only 3.5 times operating profit before depreciation. It is therefore not necessary to continue to emphasise a rapid decrease in debt which is why the company’s ability to pay dividends has increased. In light of this, the Board of directors plans to recommend a dividend of USD 120 million for the prior year at the annual general meeting.

This strong financial position of Landsvirkjun provides a solid foundation for future challenges on the road to the community’s green and climate friendly future. There are a few projects in development related to increased power generation which will be ready to initiate later this year. There are a lot of opportunities and we have already started preparing projects which will support national energy transition and the government’s ambitious climate goals.

Power station operations were good, as in previous years, despite various challenges posed by the COVID-19 pandemic. We are therefore in a strong position to face the challenges which the future brings.“


Financial statements LV 2021.pdf
Press Release.pdf