Significant increase in revenue due to high aluminum content


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

Reykjavík Energy’s consolidated financial statements for the first quarter of 2022 were approved at a board meeting today. Within the group are, in addition to the parent company, Veitur Utilities, ON Power, Reykjavík Fiber Network and Carbfix.

High aluminum prices

The prices of various commodities on the world market have recently increased significantly. This includes aluminum prices, but ON Power’s electricity sales are partially tied to the market price of aluminum. These were more than 50% higher in the first three months of 2022 than in 2021 and 90% higher than in 2020. ON revenues in the first quarter increased by almost 1 billion ISK year over year. However, hedging aluminum reduces the impact on the Group’s results. Revenues from other OR activities also increased, mainly due to the increase in the number of customers and the increased use of district heating.

The storm that hit southwest Iceland in late February caused damage, particularly to overhead lines at Veitur Utilities, but major disruptions to the electrical system from the storm also damaged sewer pumps. The increase in maintenance costs leads to an increase in 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 what we have seen for a few years. We are also experiencing a rise in interest rates because we have, for hedging purposes, increased the weight of ISK in our financing. Fortunately, utility prices have fallen in real terms in recent years. But under current stresses, it is now increasingly important to effectively manage all of our operations and investments to minimize the impact of rising cost of goods and materials as well as third party contracts on Icelandic households.


Benedikt Kjartan Magnusson
+345 516 600

  • OR Q1 2022 Interim Financial Statements


Comments are closed.