Dear stakeholders,

The year 2019 was operationally successful for the Blue Lagoon and the company continues its financial growth that began in 2011, making this is the ninth year in a row where the financial expansion of the company is positive and the Blue Lagoon’s turnover gradually continues to increase. For the first time in a decade, the number of travelers to Iceland decreased by 20%. The drop in visitors is largely due to WOW Air cancelling its operations and filing for bankruptcy. Icelandair also played into the decrease as the company had to amend its flight schedule due to the grounding of the Boeing Max 8 airplanes. Despite these setbacks, the country still saw more than a million tourists, and the Blue Lagoon’s operations were steady. Directors reacted correctly to these changes, securing Blue Lagoon’s profitable and successful operations.

Blue Lagoon’s net profit amounted for 125 million EUR, compared to 123 million EUR the previous year. The company’s EBITDA was 34.3 million EUR, compared to 39.6 million EUR the year before. Gross profit was 22 million EUR, comparing to about 26 million EUR the previous year. Income tax paid to Iceland’s Treasury in 2020 for the operation year of 2019, accounted for 5.8 million EUR which equals to 900 million ISK at today’s exchange rate.

At year-end 2019, Blue Lagoon’s balance sheet was very positive as the company’s equity accounts for 43%.

At the start of 2020, there were no indications that the Blue Lagoon could not expect growth to continue. A few weeks into the year, Þorbjörn, the volcano near the Blue Lagoon, became active, but fortunately no eruptions occurred. However, at the same time, the news of the virus spreading through Asia reached Iceland, which has since turned into a global pandemic. This has resulted in borders closing around the world, all for different periods of time, and immensely affecting the travel industry. In late June 2020, travel started to pick up again, but at a very slow and conscious speed. When the Coronavirus reached Iceland, Blue Lagoon needed to pause or close almost all its operations and, unfortunately, furlough employees. On the 19^th of June, Blue Lagoon re-opened its doors; however, it is a known fact that operations will not be as successful as previous years. At this point in time we can only hope we can manage the current situation successfully and the company will soon be running smoothly again, even though it is clear to everyone that it will take time.

As the news reports, the global pandemic has negatively impacted Iceland, as it has the rest of the world. A number of Icelandic travel companies and other related industries are faced with difficult challenges and thus employment rates have been affected. In general, the outlook on the job market is bleak as it is nearly impossible to forecast how Iceland’s economy will look in the coming months, since the uncertainty of what is to come is high.  This situation will tremendously affect Blue Lagoon’s operations in 2020, as we foresee the company will run at a loss instead of the profit we have experienced for the past decade.

Under these circumstances, the main task of the Blue Lagoon’s Board of Directors and CEO is to lead the company through these uncertain and unprecedented times. We have put in a strong effort of fighting this battle of unpredictability and will continue to do so. Fortunately, the company’s mindset has always been to prepare for unforeseen events, such as natural disasters or terrorism, which could temporarily affect the company’s operations and has been discussed thoroughly at Annual General Meetings for the past few years.

The current pandemic is the type of unforeseen event that the company has prepared for and as such we will guard the company’s interests and its stakeholders. We are hopeful that our strategy will yield positive results.

The first step in Blue Lagoon’s defensive strategy is to cancel dividend payments in 2020 for the profit year of 2019. The company’s stakeholders will thus supply Blue Lagoon with subsidies and support through these troubled times. I am not aware of anything additional that the stakeholders can do to steer the Blue Lagoon successfully through this global pandemic.

At last, I want to thank all Blue Lagoon employees, the Board of Directors, and the CEO for a very enjoyable cooperation last year. Together we can overcome this present challenge and have the Blue Lagoon, the pioneer in the Icelandic travel industry, strong and stable again.