Chairman’s Address

Úlfar Steindórsson

Chairman of the Board

Dear shareholders,

Over the past two years, the operations of Blue Lagoon have differed greatly from previous years.  Instead of the uninterrupted success and profitable operations experienced since 2011, the company suffered major disruptions, now for the second year in a row, due to the pandemic from which no part of the globe has been spared.

As a result, the company’s operations in Svartsengi had to be closed in October 2020. They were not reopened until last June, since there was no choice but to keep the facilities closed due to disease control measures and actions imposed by the authorities.  The uncertainty continued until the end of the year, however, since the disease control rules were repeatedly changed during the period, with consequent disruptions to the company’s operations.

However, there was a positive turnaround in the Blue Lagoon’s operations during the year, from the previous year, since revenue increased by 46%, which had a significant positive effect on the company’s results. The company’s net losses amounted to EUR 4.8 million, whereas its EBITDA totaled EUR 2.1 million compared to the negative EBITDA of EUR 12.6 million the year before. In comparison, the company’s losses in 2020 amounted to EUR 20.7 million.

It was not least thanks to the government’s support for the tourism industry, in terms of maintaining an employment relationship with its employees, that Blue Lagoon managed to keep an average of 396 employees on the payroll last year, despite closures in the first half of the year. Blue Lagoon is an important employer, especially in Reykjanes. Under these complex and uncertain circumstances, all emphasis was placed on defending the company’s interests, while at the same time efforts were made to strengthen its foundations so that it could spring back into action with full force when the situation improved again. At the end of the year, the company had 569 employees in 506 average equivalent positions.

These emphases yielded good results. The Blue Lagoon’s tax footprint in 2021 amounted to just over ISK 1.8 billion, which is over nine times the amount that the company availed of through the government’ support measures. There is therefore both old and new truth in the assertion that the robust operations of companies across the country form the basis of the prosperity of the nation as a whole.

Despite challenging conditions in 2021, the Blue Lagoon’s financial position is sound and the equity ratio according to the balance sheet at the end of 2021 amounted to over 37%.

In January 2021, considerable seismic activity started around Mt. Þorbjörn in the vicinity of the Blue Lagoon, culminating in an eruption and lava flow in Fagradalsfjall which began on March 19th and ended last December. Neither people nor constructions were at risk. We are constantly reminded of the forces of nature in Iceland. Further earthquakes or eruptions cannot be ruled out, but in the opinion of scientists they do not pose any risk to the inhabited areas of Reykjanes or the activities of Blue Lagoon. We are always aware of the potential threat of earthquakes and volcanic eruptions, which can never be ruled out on this volcanic island of Iceland.

On behalf of the company’s board, I would like to thank the employees for their selfless and outstanding work in challenging circumstances.  I would also like to thank my fellow members on the board of Blue Lagoon for their valuable co-operation and strong support.

We believe that the future is bright and that the turnaround will really start sooner rather than later.  The last few months have been promising on that front.