The year 2017 was a prosperous year for us and operations were successful. Energy generation is at an all-time high, the construction of two new power stations went according to plan and one of these stations began operations at the end of the year. Profit before unrealised financial items was the highest in Company history and we will soon be in a position to pay higher dividends to our owners.

We are pleased with the financial success of the Company this year but Landsvirkjun is a state-owned company and must therefore consider many other aspects of the business such as the economic, social and environmental aspects of sustainable development. This is reflected in the content of this annual report.

In light of this, we decided to focus on three of the UN’s Sustainable Development Goals: Goal 5 on Gender Equality, Goal 13 on Climate Action and Goal 7 on Affordable and Clean Energy.

Landsvirkjun's contribution to the fight against climate change is undisputed. Over 80% of the world's energy production is still based on fossil fuels and consumption must be reduced. The drive to increase sustainable energy production, using renewable energy sources, is inevitable.

The Blanda Hydropower Station was awarded the Blue Planet Sustainability Prize and the Fljótsdalur Hydropower Station received an outstanding rating for sustainability, according to an international protocol.

Landsvirkjun is committed to ensuring gender equality and was awarded the Gold Standard for Wage Equality by PWC for the third time. The proportion of female executives exceeded 30%, and an action plan was launched on the basis of the Equal Opportunities Indicator Capacent.

Landsvirkjun takes its responsibilities seriously.



Landsvirkjun's operations were successful in 2017. Revenues were higher than ever before and energy sales and generation were the highest ever recorded. Sales amounted to 14.3 TWh, an increase of more than 5% when compared with the previous year. Five power stations enjoyed a record year in production: Fljótsdalur, Sigalda, Búðarháls, Sultartangi and Steingrímsstöð.

External conditions were also advantageous to the Company. Aluminium prices increased by 23% between years and still have some effect on the Company's income. Most of our largest customers experienced a successful year of operations and the demand for electricity remained high.

All of these factors led to record profits before unrealised financial items. Landsvirkjun's finances are becoming stronger every year, which means that we will soon be able to increase dividend payments to the owner of the Company, the Icelandic people.

This strong cash flow has sustained major investments over the past few years. Two power stations were constructed concurrently for the first time in Company history and the Búðarháls Hydropower Station began operations in 2014. The first phase of the geothermal power station at Þeistareykir also began operations in November. The second phase will begin operations in the spring of 2018. The expansion of the Búrfell Hydropower Station will soon reach completion and is scheduled to begin operations by the middle of 2018. A total of 1.6 TWh will be produced by these three new power stations, representing a 12% increase in capacity.

These projects, which will lay the foundation for stronger and safer revenue resources for the Company, have temporarily slowed down debt-repayment. In 2018, this extended construction period will end, and the Company will be even stronger than before and better prepared to deal with future projects.

Landsvirkjun is a participant in the UN Global Compact, which is a global criteria for social responsibility and Landsvirkjun’s progress on those issues is outlined in the annual report.