Significant increase in revenue due to high aluminium prices

23. may 2022


The Reykjavík Energy Group's operating revenue in Q1 2022 increased by 14% from the previous year, the main explanation being ON Power’s increased revenue from electricity sales to power-intensive industries. Profit for the period amounted to ISK 6.8 billion but one-time transactions and costly damage to utility systems in February storms increased operating costs for the period compared to Q1 2021.

OR Interim Financial Statements Q1 2022

The consolidated financial statements of Reykjavík Energy for Q1 2022 were approved at a meeting of the Board of Directors today. Within the Group are, in addition to the parent company, Veitur Utilities, ON Power, Reykjavík Fibre Network, and Carbfix.

High Aluminium Prices

Prices of various commodities on the world market have recently risen considerably. This includes aluminium prices, but ON Power’s power sales are partially linked to the market price of aluminium. Those were more than 50% higher in the first three months of 2022 than in 2021 and 90% higher than in 2020. ON’s Q1 revenue increased by almost ISK 1 billion year-on-year. However, aluminium hedging decreases the impact on the Group’s results. Revenues from OR’s other operations have also increased, mainly due to the increase in number of customers and increased use of district heating.

The storm that hit SW-Iceland in late February caused some damage, especially to Veitur Utilities’ overhead lines, but extensive disruptions in the electricity system due to the storm also damaged sewerage pumps. Increased maintenance costs result in increased operating costs in the interim financial statements.

Bjarni Bjarnason, CEO

Reykjavík Energy is not immune to the effects of inflation, which is now higher than we have seen for some years. We are also experiencing rising interest rates as we have, for hedging purposes, increased the weight of ISK in our financing. Fortunately, the utility tariffs have decreased in real terms in recent years. But under the current strains, it is now of increased importance to efficiently manage all our operations and investments to minimize the impact of the increased cost of goods and materials as well as third party contracting on Icelandic households.