HS Orka’s 2009 results and the involvement of Magma topic of a recent article
Icelandic HS Orka, partly owned by Magma Energy, has had an exceptional 2009 with profits of US$53 million despite the current state of the Icelandic economy.
A recent article looks into Iceland’s HS Orka, the country’s biggest privately owned energy producer, 41 percent owned by upstart Canadian geothermal power producer Magma Energy Corp. (CVE:MXY), is counting on continuing to tap Iceland’s geothermal assets.
Although the firm took a hit recently, due to contracts tied to the market price of aluminum, which tumbled in the month of December—much of the geothermal power produced by HS Orka is sold to large aluminum smelting facilities (analysts collectively expect the metal’s average price to increase 19 percent in 2010).
Nevertheless, HS Orka had an exceptional 2009, swinging into the black, with profits coming in at $53 million, compared with a loss of $90 million in the previous year. What makes this particularly impressive is it was accomplished in the face of the Icelandic economy being battered and sent into a tailspin by the effects of the global economic crisis, leaving the country on the brink of bankruptcy.
Magma, which next month expects to up its stake in the company by an additional 2.16 percent, is gearing up to pursue opportunities for expansion of geothermal development in Iceland. In preparation for its push, Magma has opened an office in Iceland and brought onboard some highly-experienced geological and executive talent to head up HS Orka’s planned large-scale development projects.
The office is being run by Asgeir Margeirsson, who has more than 15 years of senior management experience in the country’s geothermal industry, including stints as Chief Executive Officer of Geysir Green Energy, Chief Operating Officer of Reykjavik Energy, and technical director of Iceland Drilling.
No significant news on the development front is expected in the short-term, but Iceland’s rich geothermal energy reserves coupled with Magma’s solid backing makes HS Orka an excellent long-term play on the white-hot Icelandic energy market.”