Reykjavík Energy’s Q3 2025 Interim Financial Results

Reykjavík Energy‘s (Orkuveita Reykjavíkur) Board of Directors approved today the interim financial statements for the first nine months of 2025. The consolidated profit amounted to ISK 6.7 billion, compared to ISK 5.1 billion in the same period in 2024 — an improvement of 31%. Operating revenues increased by 3.9% year-on-year, while operating expenses rose by 2.0%. The interim financial statements cover the Reykjavík Energy Group, which includes, in addition to the parent company, Veitur Utilities, ON Power, Reykjavík Fibre Network, and Carbfix.

Solid Financial Position

“We want to respond to the government’s call for increased resilience and security in the community’s basic infrastructure. We have therefore emphasised expanding energy generation, particularly for Veitur Utilities’ district heating systems, but also on increasing sustainable electricity production,” says Sævar Freyr Þráinsson, CEO of Reykjavík Energy. “We are also ready to better protect our water works and water sources from potential threats. The world’s poor progress in tackling climate change, accompanied by rising sea levels, makes the long-term outlook for wastewater systems more challenging,” Sævar Freyr adds.

Cash flow from operations, which among other things supports investment activities, amounted to ISK 22.1 billion during the first nine months of the year — a 6.9% increase compared to the previous year.

Managers’ Overview

Operating year	2025	2024	2023	2022	2021
Amounts are at each year’s price level in ISK millions	1.1.-30.9.	1.1.-30.9.	1.1.-30.9.	1.1.-30.9.	1.1.-30.9.
Revenues	49,984	48,277	43,327	39,741	37,663
Expenses	-20,960	-20,549	-17,736	-15,516	-13,339
Thereof energy purchase and distribution	-5,028	-5,373	-4,993	-4,884	-4,174

EBITDA	29,024	27,728	25,591	24,225	24,325
Depreciation and amortisation	-12,817	-12,495	-11,544	-10,449	-9,966
EBIT	16,207	15,233	14,047	13,776	14,359

Cash flow statement
Received interest income	274	196	117	64	109
Paid interest expenses	-6,182	-5,768	-5,119	-3,437	-3,174
Net cash from operating activities	25,473	24,650	22,445	21,714	21,832
Working capital from operations	22,095	20,666	19,650	19,507	18,798

Liquid funds	30,9,2025	30,9,2024	30,9,2023	30,9,2022	30,9,2021
Deposits and marketable securities	16,100	10,229	11,273	13,962	13,195
Cash and cash equivalents	10,517	9,743	5,131	7,499	17,998
Undrawn credit lines	29,385	13,080	8,850	4,500	10,198
Liquid funds total	56,002	33,052	25,253	25,961	41,391

Revised Financial Forecast

Despite Reykjavík Energy’s strong financial position, the Board today approved amendments to the Group’s financial forecast, originally published on 7 October. The reason is that Norðurál, the Group’s largest single customer, has informed Reykjavík Energy that it will default on payments due to repeated equipment failures at its aluminium smelter in Grundartangi.

The amendments to the forecast include:

ISK 1 billion lower operating profit for the current year compared to the previous forecast.
ISK 2 billion reduction in operating costs in 2026.
ISK 6 billion reduction in investments that same year.
ISK 2 billion reduction in dividend payments in 2026.

“We must act responsibly and temporarily trim our sails should there be delays in the agreed payments for electricity. According to information from Norðurál, this temporary reduction could last throughout 2026,” says Sævar Freyr. According to the power purchase agreement between Reykjavík Energy and Norðurál, the company is obliged to pay for the contracted electricity, whether it consumes it or not. However, Norðurál has now stated that it will only pay for the electricity the smelter receives while repairs are being carried out.

“If we are to believe the statements that the owner of Norðurál has made to markets in the United States, Norðurál is insured against its losses, as this is a general malfunction. However, Norðurál’s notice to Reykjavík Energy is such that the declared payment default is said to be due to uncontrollable events similar to volcanic eruptions or acts of war. There seems to be an inconsistency there. We will get paid for the electricity — of that I have no doubt — but I am very disappointed that the company chooses to behave in this manner, failing to make contracted payments, yet expecting the contracted electricity to be available whenever it suits them,” says Sævar Freyr.

Contact:

Snorri Hafsteinn Þorkelsson
CFO
snorri.hafsteinn.thorkelsson@orkuveitan.is