Difficult financial year but prospects are looking up

The company’s results for 2013 are a disappointment as there was a loss of ISK 570m in its operation. The company’s productivity, however, has increased and operating prospects are positive.

The group’s income in 2013 amounted to ISK 5bn as opposed to ISK 7.6bn the previous year. There was a significant decrease in domestic income, falling approximately 34% from the previous year with investments in Iceland in 2013 at an historic low when account is taken of GDP. The company’s equity at year-end amounted to ISK 1bn and its equity ratio was 26%.

There were few new projects in Iceland during 2013 and we continued our investments overseas. The year was characterised by cost control actions which involved reducing staff numbers and strengthening the company’s infrastructure. The effects of these actions, however, will not be fully realised before the 1st quarter of 2014.

EBITDA / Operating revenues

Equity ratio / Total equity

Investing in the future

The company continued to invest in development projects in 2013 in countries such as Hungary and Norway. We have complete faith that these investments will provide us with profitable projects in 2014. We saw signs of improvement by the fourth quarter of 2013 and the company has been returning a profit during the first quarter of this year, which is in accordance with expectations. The plans of the new Government to improve the corporate tax and operating environment bring hopes that such actions will stimulate the economy although developments have been slower than anticipated. The establishment of a transparent tax system and regulatory framework for investments in Iceland is of the greatest importance, irrespective of whether the investments in question are by means of domestic or foreign funds.

Employees

“We used 2013 to adapt and strengthen our foundations to increase the long term productivity of the company. We will continue our advance in overseas markets and anticipate that the greatest growth will be in the energy sector.“

Sigurhjörtur Sigfússon

CFO

Key figures for 2013

(ISK thousands)

Income statement:

2013

2012

2011

Operating revenues

4.984.165

7.570.391

8.757.456

Operating expenses

(5.460.977)

(7.538.609)

(7.546.060)

Profit before depreciation

(476.812)

31.782

1.211.396

Depreciation

(113.680)

(122.777)

(122.141)

Operating (loss) profit

(590.492)

(90.995)

1.089.256

Finance income (expenses)

(152.711)

20.894

74.769

Affiliated companies

(1.876)

(498)

0

Income tax

70.127

(34.149)

(238.299)

Minority interest

100.572

111.119

(174.566)

Profit (loss) of the year

(574.380)

6.371

751.160

(ISK thousands)

Balance Sheet:

2013

2012

2011

Fixed assets

2.293.317

2.424.298

2.304.297

Current assets

1.537.372

1.899.461

3.198.792

Total assets

3.830.689

4.323.759

5.503.089

Equity

1.007.733

1.736.076

2.229.700

Non-current liabilities

629.909

936.347

1.297.742

Current liabilities

2.193.047

1.651.336

1.975.647

Total equity and liabilities

3.830.689

4.323.759

5.503.089

Financial ratios:

2013

2012

2011

Working capital from operations

(552.790)

30.491

1.087.491

Current ratio

0,70

1,15

1,62

Equity ratio

26,3%

40,2%

40,5%

Return on equity

(41,9% )

0,3%

37,5%

As stated earlier, the operation in 2013 was a disappointment. We have, however, adapted successfully to the operating environment and see exciting although challenging times ahead.