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HS Orka annual results and update on operations

Svartsengi geothermal power plant of HS Orka, Iceland (source: Enex)
Alexander Richter 27 Feb 2014

Icelandic geothermal company HS Orka, majority owned by Canadian Alterra Power, announces its financial results for 2013, reporting a net loss of $2.9 million. It also reports an increase of 129% for its revenue share from the operation of the geothermal spa operations of the Blue Lagoon.

In a release on Tuesday, Canadian Alterra Power publishes the financial results for HS Orka, in which the company holds 66.6%.

The company announces an increase in electricity production from the Reykjanes and Svartsengi geothermal power plant by 7%, while revenue increased 5% to $57.7 million.

EBITDA figures and gross profits have decrease 11% or 27% respectively. This reflects “increased maintenance at the power plants in the year as a result of planned cleaning and repair of two boreholes in the period, in addition to increased transmission expenses resulting from an increase in transmission rates of 20% during the period. This transmission rate increase has since been rolled back, which will be reflected in future periods.”

Therefore the company reported a net loss of $2.9 million in 2013 compared to a net income of $5.2 million in 2012.

In an interesting side note the company highlights the operation of the Blue Lagoon, the geothermal spa in short distance from its Svartsengi geothermal power plant. The share of income from that operation has increased 129% to $3.2 million. The Blue Lagoon continues to outperform expectations due to increased visitors to the operation.  The dividend from the Blue Lagoon for HS Orka increased from $1.3 million to $1.8 million in 2013.

“HS Orka commenced a fluid reinjection program at the Reykjanes field by drilling a new large diameter well to enhance future field stability, whereby a portion of geothermal fluids extracted from current operations will be reinjected into the field to maintain or increase subsurface pressure and optimize the resulting electrical output.”

Source: Company release via email