Satisfactory performance given the global economic conditions Debt continues to
decrease
Key figures from the interim financial statements

-- Operating revenue amounted to USD 202.9 million which is a decrease of 6.9%
compared to the same period last year.
-- EBITDA amounted to USD 163.2 million. EBITDA ratio is 80.4% of turnover,
compared to 82.3% for the same period last year.
-- Profit before unrealised financial items amounted to USD 46.9 million,
compared to USD 50.5 million for the same period last year.
-- Cash flow from operations amounted to USD 118.1 million which is a decrease
of 11% compared to the same period last year.
-- Net debt decreased by USD 74 million during the period and amounted to USD
2,429 million at the end of June.

Hordur Arnarson, the CEO:

“Landsvirkjun's operations during the first six months of the year have
been successful, energy power sales agreements were concluded with two new
customers, electric generation has gone according to plan and the project
at Budarhals power station is for the most part on schedule.

The profit for the first six months of the year is acceptable taking the
world’s economic conditions into account. Revenue decreases by 6.9% partly
due to lower aluminium prices and its influence on price according to power
sales agreements. Realised aluminium hedges had a positive influence during
the period and in these circumstances we benefit from the renegotiation
with Rio Tinto Alcan where energy price was higher and not linked to
aluminium price.

Net debt of the Company continues to decrease, now by USD 74 million
despite the fact that the Company paid dividends and increased investments
compared to previous year. It is important to continue to decrease debt
because of the high leverage of the Company.”

Operational highlights

Generation and delivery of electric power was successful during the first
six months of the year 2012. All units in the Company's power stations were
available for generation 99.8% of the time with the exception of scheduled
maintenance. Energy generation was 6,096 GWh compared to 6,268 GWh in the
first six months of the year 2011. The outlook for energy generation over
the entire year is good.

The key element in the operation of energy companies is safety.
Landsvirkjun obtained satisfying results on July 30 this year when one year
had passed from the recording of the last accident-related absence.

Key figures from the interim financial statements in USD thousand: See
attachment.