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HS Orka reports higher revenues for 2014

Reykjanes geothermal power plant of HS Orka, Iceland (source: flickr/ ThinkGeoEnergy, creative commons)
Francisco Rojas 27 Feb 2015

HS Orka is currently partially owned (66.6%) by the Canadian Alterra Power Corp. The financial results for Orka are positive thanks to higher revenues.

In a post made available by HS Orka hf yesterday, the Financial Statements for 2014 of the company were approved at a Board of Directors’ meeting on 26th of February 2015. The Financial Statements of HS Orka hf. is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Thanks to a parallel post done on CNW, the mentioned statement can be seen in USD.

Highlights for the year ended December 31, 2014 include (all amounts in US$):

  • Revenue increased 11% to $64.1 million (2013: $57.7 million) due to an increase in retail sales coupled with a strengthening ISK during the year.
  • HS Orka generated $23.5 million of EBITDA and $15.9 million of gross profit in 2014 (an increase of 10% and 13% respectively from 2013), reflecting increased revenue discussed above and a decrease in plant operating and transmission costs partially offset by higher power purchases during the year. Other operating costs increased in 2014 primarily due to the cost of legal proceedings and the cost of preparing for the arbitration hearings connected to the power sales contract with Norðurál Helguvík. The hearings are expected to take place in spring 2016.
  • Net income of $6.3 million was recorded in 2014 versus a net loss of $2.9 million in 2013. In addition to the operating results described above, this increase was primarily due to a year on year change in the fair value of the embedded derivative in power purchase agreements (linked to the aluminum price) which resulted in a positive movement of $13.3 million.
  • HS Orka’s share of income from associates increased 57% to $5.0 million (2013: $3.2 million) primarily due to results from the Blue Lagoon, which continues to outperform expectations due to increased visitor attendance.
  • HS Orka received a dividend of $2.8 million in the year from the Blue Lagoon (2013: $1.8 million) and consistent with previous years HS Orka is expecting to pass this dividend to its shareholders in 2015 (2014 HS Orka cash dividend paid to shareholders of $2.0 million, with Alterra’s share being $1.3 million).
  • HS Orka continues to use cash from operating activities to pay down loans and borrowings, with repayments of $19.1 million in 2014 (2013: $18.6 million) and a loan balance outstanding at year-end of $97.2 million. Loan repayments are set to decline substantially from 2017 onwards.
  • As part of the ongoing field maintenance program at the Reykjanes field, HS Orka has completed the drilling of a new large diameter reinjection well and commenced drilling of a second well in 2014. A pipeline to carry fluid to the wells is being built and reinjection is expected to commence in early 2015.

To read the full disclosure on USD, please follow this link.

Click here to read HS Orka’s official Annual report in ISK at their website.

Source: HS Orka & CNW – PR Newswire