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Board Approves Economical Measures

Reykjavik Energy´s (RE) Board has approved various measures aimed at strengthening the company´s operations, meeting its obligations to creditors and maintaining a high quality of customer service.

First and foremost, the objective is to ensure the solid foundation of RE´s operational and organizational functions in order to conduct core operations.   The measures taken are:

• An increase in prices
• Reduced operational costs
• Sale of assets

An increase in prices is expected to generate 4 billion ISK and reduced operational costs are set to generate 2 billion ISK per year.

RE´s real income from operations, excluding the wholesale of energy to heavy industry, has decreased substantially in the past few years. Credit rating agencies and RE´s creditors have expressed concerns over these developments.  In addition, the National Energy Authority (NEA) has noted that price rates for electricity distribution are well below NEA´s minimum income requirements.