Reykjavik Energy‘s (OR) Board of Directors approved today, April 8th, actions to respond to the impact that the Covid-19 epidemic is expected to have on the Icelandic economy and the labor market. By taking these actions, OR shows its committment to social responsibility by increasing investments in projects that have a large impact on society, with the aim of maintaining domestic employment.
The Board agreed to increased investments of the OR group of about ISK 2bn in the year 2020. Veitur Utilities, one of OR‘s subsidiaries, have recently identified projects which might be considered but it is expected that constructions on supply systems will be the main pillar of the investment projects launched this year. It is assumed that the projects will be labor-intensive and that they will be in the operational area of Veitur Utilities.
Furthermore, the Board approved to increase investments in 2021 of about ISK 4bn but final decision on icreased investments in 2021 will be finalized when the financial forecast will be completed in the fall.
Increased dividend payment
The Board furthermore approved to propose increased dividend payment to owners‘ at the Annual General Meeting, which had been stated the financial forecast, from ISK 1.750m to ISK 3.000m which equals about 1.6% of equity at the end of 2019. Decision on dividend payment is based on procedures which measure whether dividend payment is possible, according to the dividend policy.
Increased authorization for financing
It is anticipated that increased investments, dividend payment and worse economic conditions overall, will increase OR‘s financing needs. Thus, the Board approved to increase the authorization for financing in the form of bonds, bills or bank loans from ISK 13bn, according to the financial forecast, to up to ISK 30bn. A part of this increase is intended to use for the refinancing of loans from OR‘s owners from 2011 and 2013. These loans were a part of the action plan put forward by OR and its owners to respond to OR‘s financial difficulties at the time, named „The Plan“.