A Stronger Foundation
The group’s EBITDA was close to ISK 290 million in 2017, compared to approximately ISK 460 million in 2016. The group’s income was close to ISK 5.8 billion, increasing slightly from the previous year. The company’s equity at year-end was ISK 1.2 billion and its equity ratio 43%.
The company’s basic operations were successful last year, despite the low increase in income from the previous year. The results are influenced by the fact that operating costs increased significantly from the previous year. The increased cost is mostly due to wage increases and the reassessment of certain properties and claims on our books, as well as the difficult operating environment overseas.
The company’s equity position is very strong, however, and cash from operating activities increased by ISK 100 million from the previous year. We have continued to reduce the company’s liabilities and are well on our way to pay up our debts.
As with other companies in Iceland, wage costs have increased, with an increase of over 7.6% last year. This is an important factor for a company where wage costs are approximately 75% of all operating costs. Much of our other costs are purchased services and their cost also increases along with the increase in wages.
It could therefore be said that over 80% of our operating costs increase along with the general rise in wages. As a counter-measure, we have managed to economise in other fields so our operating costs have not increased as much as the wages.
Currency fluctuations have a great effect on our operating environment. Our competitive position in foreign markets has become weaker due to the strengthening of the Icelandic króna.
Another challenge is the fact that the proportion of traditional construction projects has increased at the expense of industrial and power industry projects. Competition in this sector is different from the more specialised industrial and power industry projects. Adapting to these changed circumstances requires adaptability and flexibility and I believe that we have been successful in that regard.