HS Orka hf.: HS Orka hf announces Financial Statement for 2014

Financial Statements for 2014 of HS Orka hf. (the "Company") were approved at a Board of Directors meeting on 26 February 2015. The Financial Statements of HS Orka hf. are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and are stated in ISK. The Financial Statements can be found on the Company's website: http://www.hsorka.is

Operating revenue for the year 2014 increased by 6% to ISK 7,479 million compared to ISK 7,031 million in 2013, primarily due to increased retail sales. Profit for the year increased to ISK 736 million (2013: loss of ISK 355 million), while total comprehensive income increased to ISK 679 million vs. a loss of ISK 434 million in 2013. Both of these increases were driven by positive movement in the value of the embedded derivative in power purchase agreements (linked to aluminum price) which moved by ISK 2,582 million to ISK 1,556 million (loss) from ISK 4,138 million (loss) in 2013.

Company EBITDA increased by 5% to ISK 2,738 million (2013: ISK 2,603 million), primarily driven by the increased retail sales mentioned above. This was partially offset by a 6% increase in operating costs (ISK 310 million) resulting from an increased power purchases , as plant operating costs and transmission costs actually decreased during the period. Other operating costs are higher than in 2013 predominantly due the cost of preparing for the arbitration hearings connected to the power sales contract with Norðurál Helguvík. Those hearings are expected to take place in spring 2016.

The Company's equity ratio increased to 59.7% against 58.0% at year-end 2013, reflecting continued paydown of Company debt.

Further information can be provided by Ásgeir Margeirsson, Managing Director of HS Orka hf., tel. [phone].

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