Balance sheet
Landsvirkjun’s total assets amounted to USD 4,451 million at year-end 2018. Cash and cash equivalents at year- end 2018 amounted to USD 116 million. The increase in operating assets between years is mostly explained by the extensive investment in new power stations over the past years.
Interest-bearing debt amounted to USD 2,001 million at year end 2018 and has decreased by USD 168 million from year end 2017. Net debt is interest bearing debt less cash and cash equivalent. Net debt amounted to USD 1,885 million at year end 2018 and has decreased by USD 158 million from year end 2017. The decrease in net- and interest-bearing debt can mostly be explained by the paying down of debt.
Landsvirkjun has put great emphasis on decreasing debt during the past few years. Net debt is interest bearing debt less cash and cash equivalent. Net debt decreased by USD 158 million during the year. An extensive construction phase is coming to an end with USD 151 million invested in 2018. The most prominent projects are the power stations Þeistareykir and Burfell II which are now both fully operational. Cash flow from operations was USD 296 million during the year and therefore covered in full the investments for the period.
Key ratios
The Company’s debt measured against the operating profit before depreciation and amortisation (net debt/EBITDA) decreases from 5.9x at year end 2017 to 4.8x at year end 2018. The short-term goal of Landsvirkjun has been to reduce this ratio to 5x EBITDA, which has now been achieved. This achievement will provide Landsvirkjun with more leeway to pay out dividends and refinance foreign long-term debt at more favourable interest rates.
The ratio of funds from operations (FFO) to net debt was 13.8% at year-end 2017 and 16.8% at year-end 2018. Interest coverage (EBITDA/net interest expenses) decreased to 4.8x but was 5.5x at year end 2017. The ratio of funds from operations (FFO) to interest expenses decreased from 4.3x at year end 2017 to 3.7x at year end 2018.
Return on equity is calculated from profit where changes in the fair value of embedded- and other derivatives, along with foreign exchange fluctuations can have significant effects. Return on equity was 5.5% for 2017 and 5.9% for 2018.
Supporting documents
You can download the Financial Statements for 2018 in electronic form here. The documents contain the financial statements as a whole in Acrobat (pdf) document and the key figures in an Excel (xls) document.
