The Board of Reykjavík Energy (Orkuveita Reykjavíkur) today approved the Group's financial forecast for 2027 and its long-term forecast for years 2028 through 2031. Investments totalling ISK 218.7 billion are planned over the period in energy production and infrastructure. The forecast also provides for continued growth in revenue and EBITDA, as well as a sound financial position for the Group.
The Board of Reykjavík Energy (Orkuveita Reykjavíkur) today approved the Group's financial forecast for 2027 and its long-term forecast for years 2028 through 2031. Investments totalling ISK 218.7 billion are planned over the period in energy production and infrastructure. The forecast also provides for continued growth in revenue and EBITDA, as well as a sound financial position for the Group.
The financial forecast is consolidated for the parent company and the subsidiaries Veitur, ON Power, Reykjavík Fibre Network, and Carbfix. The subsidiaries' forecasts have previously been approved by their respective boards. The forecast will be submitted to the City of Reykjavík for consideration as part of the City's consolidated budget.
Increased Value Creation and Robust Development for the Future
According to the forecast, the Reykjavík Energy Group's annual revenue will increase by ISK 22.2 billion, or 28.2%, from 2027 to 2031. Earnings before interest, taxes, depreciation and amortisation (EBITDA) will increase by ISK 17.1 billion, or 35.8%, over the same period, while operating expenses excluding depreciation and amortisation will increase by ISK 5.1 billion, or 16.5%. Reykjavík Energy's financial performance will improve over the period, with a profit of ISK 16.4 billion projected for 2031.
Total investment in 2027-2031 is projected at ISK 218.7 billion. The investments will focus, among other things, on increased energy production, the reinforcement and renewal of utility systems, enhanced security of hot-water supply, the energy transition, the digital development of telecommunications networks, research and innovation. The forecast does not provide for any change in the ownership of Reykjavík Fibre Network or Carbfix, although this remains under consideration.
According to the forecast, annual cash flow from operations will increase from ISK 34.5 billion in 2027 to ISK 42.5 billion in 2031, an increase of approximately 23.2%. Increased cash flow from operations will strengthen Reykjavík Energy's capacity to finance investments and repay borrowings.
According to the forecast, the equity ratio will be 50.1% in 2027 and 47.8% at the end of the forecast period. Projected dividend payments over the period amount to ISK 35.1 billion, and the conditions for dividend payments are expected to be met.
Investing for the Future
"Through the investments planned for the coming years, we are preparing Reykjavík Energy for continued societal growth and increased demand for reliable and sustainable essential services. At the same time, we are strengthening the companies' resilience to the climate crisis and other risks. The forecast reflects our ambition to increase energy production, consolidate utility systems and develop new solutions; harnessing deep geothermal resources and pursue new approaches to developing energy options. At the same time, we will maintain cost-effective operations to ensure a sound financial position. The extensive investments planned for the coming years will improve the reliability of our services and the future competitiveness of society," says Sævar Freyr Þráinsson, CEO of Reykjavík Energy.
The financial forecast does not predict the potential effects of further public levies on energy consumption and energy production.
Domestic and foreign borrowing is envisaged to finance investments. Financing will continue to be provided predominantly within Reykjavík Energy's Green Financing Framework. Foreign borrowing is also intended to help balance cash flows in foreign currencies over the forecast period.
Contact:
Snorri Hafsteinn Þorkelsson
CFO
snorri.hafsteinn.thorkelsson@orkuveitan.is
