2025Annual report

In 2025, Småkraft generated power revenue of EUR 53 million, a decrease of EUR 1 million or 2% compared to 2024 (EUR 54 million).

Production reached 1,488 GWh, a 26% decrease compared to 2024. Adjusted for curtailed production in NO4 and NO3 of 286 GWh the decrease in production was 2%. Curtailed production as consequence of negative prices and high imbalance cost from April to September in NO4 and partly in NO3.The average obtained spot prices per MWh increased by 20% from 30 EUR/MWh in 2024 to 36 EUR/MWh in 2025. Småkraft has production in seven different price zones in Norway and Sweden, and the obtained spot prices per MWh varied significantly between these areas.

In 2025, the mark-to-market valuation of energy derivatives, which hedge about 10% of the expected production for 2026, resulted in a positive unrealized value change of EUR 1 million (compared to EUR 25 million in 2024). According to IFRS, these future hedge contracts, which will be realized in the coming years, are recognized in the Financial Statements at market value at year-end. However, production and revenue are not recognized until the date of production.

Småkraft is focusing on selected Alternative Performance Measures (APMs) to assess performance from operational activities. Please refer to appendix for details on these APMs. Adjusted power revenue showed a decrease of 5% for 2025 compared to 2024, highlighting the reduction in power prices in 2025 compared to the previous year.

Payroll and related costs increased by 4% compared to 2024, at EUR 4.7 million. Depreciations and impairments for 2025 amounted to EUR 22 million same as for 2024. Other operating expenses were reported at EUR 27.7 million, an increase of 9% compared to 2024.

The operating result for 2025 was negative EUR 8 million, compared to positive EUR 21 million in 2024. Excluding unrealized value change on energy derivatives, Småkraft would have reported an operating loss of EUR 9 million, compared to a loss of EUR 4 million in 2024. Adjusted EBITDA was EUR 13 million, down from EUR 18 million.

Net financial items for 2025 reported a loss of EUR 18 million (EUR 42 million in 2024). The reduction in net financial items is mainly explained by less fluctuations of currencies. Long-term financing granted in EUR implied a disagio on borrowings in 2025 of EUR 1 million (EUR 20 million in 2024).

Income tax reports an income of EUR 4 million in 2025 same as in 2024. The recognised tax positions are mainly deferred positions. Payable taxes as of 31 December 2025 were NOK 0.8 million compared to NOK 0.3 million per 31 December 2024.

Total comprehensive income 2025 was a loss of EUR 22 million in 2025, compared to a loss of EUR 35 million in 2024.

As of December 2025, consolidated total assets amounted to EUR 917 million (EUR 864 million).

Total non-current assets amounted to EUR 872 million (EUR 819 million). Current assets amounted to EUR 45 million (EUR 45 million). Considering time deposits presented as other receivables of EUR 1 million as per 31 December 2025 (EUR 8 million), total cash position was EUR 34 million (EUR 36 million).

Total equity amounted to EUR 406 million (EUR 368 million) an increase of EUR 38 million, resulting in an equity ratio of 44% (43%).

Total liabilities amounted to EUR 511 million (EUR 496 million). Total borrowings increased by EUR 19 million to EUR 488 million (EUR 469 million).

Cash flow from operating activities amounted to EUR 16 million compared to EUR 13 million for 2024. This improvement is primarily explained by changes in working capital due to reduced cash outflow to landowners in 2025 compared to 2024, based on earnings from previous years.

Cash outflow from investing activities amounted to EUR 60 million, up from EUR 47 million, mainly due to acquisitions of operating companies.

The cash inflow from financing activities amounted to EUR 50 million, up from EUR 24 million. Shareholders contributed with new capital of EUR 59 million (EUR 32 million). The Group received EUR 15 million (EUR 61 million in 2024) from new loan and paid EUR 6 million in instalments on credit facilities.

The Group makes estimates and assumptions concerning the future. These estimates are based on the actual underlying business, its present and forecasted profitability over time, and expectations about external factors such as power prices, interest rates, foreign exchange rates and other factors which are outside the Group’s control.

The resulting estimates will, by definition, seldom equal the related actual results. There is use of judgement in the considerations related to recognition of deferred tax asset for tax losses carried forward, and considerations related to contingent liabilities. Please refer to note 3 - Key accounting estimates and judgements in the Consolidated Financial Statements for further information.

Småkraft AS generated power revenue of EUR 23 million in 2025 same as in 2024. Production in 2024 was 532 GWh compared to 689 GWh in 2024. The reason for reduction in production is explained by curtailed production in NO4 and NO3 of approximately 100 GWh. Achieved higher prices in the other prices areas compensated for the curtailed production.

Småkraft AS has production in all price areas in Norway.

In 2025 the mark-to-market valuation of energy derivatives, which hedge about 10% of the expected production for 2026, caused a positive unrealized value change of EUR 1 million (EUR 25 million in 2024). Småkraft AS is the only company in the Group that sells forward power. According to IFRS, these future hedge contracts, which will be realized in the coming years, are recognized in the Financial Statements at market value at year end. However, production and revenue are not recognized until the date of production.

Småkraft AS is focusing on selected Alternative Performance Measures (APMs) to assess the performance from operational activities. Please refer to the appendix of this report for details these APMs. Adjusted Power revenue showed a decrease of 12% for 2025 compared to 2024, primarily due to changes in the realized value change on energy derivatives, which amounted to negative EUR 8 million in 2025 compared to negative EUR 7 million in 2024.

Payroll and related costs showed a small increase from EUR 4.2 million to EUR 4.3 million in 2025, reflecting salary cost increases.

Depreciation and impairments for 2025 was EUR 7.4 million, down from EUR 8.1 million. The overall growth of the group has directly impacted the increase in other operating expenses, which increased to EUR 12 million in 2025 compared to EUR 11 million in 2024.

The operating profit for 2025 was negative EUR 5 million (positive EUR 18 million). Excluding unrealized value change on energy derivatives, Småkraft AS would have reported an operating loss of EUR 7 million, similar to 2024. Adjusted EBITDA, excluding same MTM adjustment, was a profit of EUR 1 million, the same as in 2024. All value changes related to energy derivatives in the Group are incurred by Småkraft AS, as all forward contracts are entered into by Småkraft AS on behalf of the Group.

Net financial items for 2025 reported a loss of EUR 13 million compared to a loss of EUR 23 million the previous year. Lower negative currency fluctuations EUR / NOK for loans granted in EUR explains an improvement of EUR 13 million. An impairment of an investment in a subsidiary is the main explanation for the remaining negative difference.

Income tax income was EUR 3 million in 2025 compared to an income of EUR 1 million in 2024.

Total comprehensive income 2025 was a loss of EUR 17 million compared to a loss of EUR 22 million in 2024.

AS of 31 December 2025, total assets amounted to EUR 717 million, compared to 679 million in 2024. Total non-current assets amounted to EUR 703 million, up from EUR 661 million.

Current assets amounted to EUR 14 million, down from EUR 18 million.

Total equity amounted to EUR 426 million (EUR 385 million) an increase of EUR 41 million, increasing the equity ratio from 57% to 59%.

Total liabilities amounted to EUR 291 million (EUR 294 million). Borrowings decreased by EUR 4 million, due to scheduled instalments of main bank facility.

The Group is in compliance with all covenants considering that reporting of ADSCR (Annual Debt Service Coverage Ratio) also included cash in the calculations for the reporting as per 31.12.2025.

Cash flow from operating activities amounted to EUR 8 million in 2025 (negative EUR 1 million).

Cash outflow from investing activities amounted to EUR 56 million (EUR 36 million), primarily due to investments in new power production capacity, through acquisitions of operating companies.

Cash inflow from financing activities amounted to EUR 44 million (outflow of EUR 32 million in 2024). Shareholders contributed with new capital of EUR 59 million (EUR 32 million). The Company paid EUR 4 million in instalments on credit facilities and leases.

Production from our power plants depends on precipitation levels and snowmelt. This results in both seasonal and annual variability, creating significant volume risk in our production. Only a limited number of Småkraft’s power plants have reservoirs, meaning that most of our production is unregulated and therefore more exposed to fluctuations than regulated hydropower generation. Hydrological conditions therefore remain one of the main risk factors.

Småkraft is also exposed to operational risks, such as failures in power-generating equipment or other critical infrastructure. To mitigate these risks, the Småkraft group has well-established procedures for operations, maintenance, and emergency preparedness across all power plants.

All power plants are insured, and production losses are covered by business interruption insurance. In addition, considerable effort has been made to manage QHSE risks across the company.

Due to its significant growth, Småkraft is continuously working on financing initiatives with new equity and debt. Småkraft’s shareholders have committed to providing equity for at least 50% of the agreed price for upcoming investments. The company is actively working with banks and debt investors to finance the remaining part of the investments. In addition, several of the ongoing construction projects will be finalized and construction loan facilities will be rolled over to and refinanced with long term debt structures.

The financial risk management process focuses on the unpredictability of financial markets and aims to minimize potential adverse effects on the Group’s financial performance. To some extent, the Group uses derivative financial instruments to reduce certain risk exposures. Financial risk management is carried out at a Group level, where the financial risks are identified, evaluated and hedged in close co-operation with the Group’s operational units.

The Board of Småkraft AS has established written principles for risk management of foreign exchange risk, interest rate risk and the use of derivative financial instruments and defined cash deposits as an integral part of our risk policy.

Energy price levels fluctuate depending on the balance between power production and consumption. In addition, grid constraints can influence regional price levels.

Most of Småkraft’s production is unregulated run-of-river generation. This means that production volumes vary with hydrological conditions and cannot be shifted in time. As a result, the power-price achieved for our production is affected by variations in the capture rate, which can differ from the average spot market price.

Småkraft curtailed its hedging activities during the summer 2021, and during 2025 the company has adjusted some of its current hedges to better match its production volatility during the year.

Småkraft may also be affected by a changing climate, and the company has initiated several measures to identify potential risks and opportunities. Evaluation of new acquisitions and development opportunities are assessed in light of the expected changes in hydrology. During detailed planning of new plants, Småkraft assesses how climate change can affect the design criteria for new installations, both in form of increased run-of, but also the safety of installations in relation to extreme weather.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of credit facilities, to ensure sufficient cash or cash equivalents at all times to be able to finance its operations and investments in line with the Group’s strategic plan. At the end of 2025, Småkraft held cash and cash equivalents amounting to EUR 34 million including time deposits of EUR 1 million classified as other receivables. This is deemed to be sufficient funding for the Group’s current activity levels and committed capital expenditures during 2026. The Group aims to mitigate the market and liquidity risks through further cost reduction and efficiency improvement programs with a continued focus on capital discipline.

The Group operates internationally and is exposed to foreign exchange risk arising from various exposures to currency fluctuations, primarily with respect to EUR and NOK. The Group seeks to minimize these risks through currency hedging via financial instruments.

The Group’s exposure to the risk of changes in market interest rates primarily relates to its long-term debt obligations at floating interest rates.

The Group evaluates the level of interest rate hedging based on assessment of its total interest rate risk and currently has a combination of fixed and floating interest rates in order to limit exposure. The Board of Directors regularly reviews the interest rate hedging of the external financing and mandates administration to execute necessary changes. Including interest rate swaps entered into, the fixed-rate portion of the Group’s interest-bearing debt is approximately 52% as of 31 December 2025.

The current primary market for the group’s services is hydro power production, which is sold through brokers to Nord Pool. The Group conducts ongoing credit evaluations of its power brokers and generally does not require significant collateral. Credit risk is considered to be limited.

In October, the Norwegian government published a consultation paper proposing to reduce the threshold for resource rent tax from 10 MVA to 1.5 MVA. If implemented, approximately 90 percent of Småkraft’s Norwegian portfolio would become subject to resource rent taxation.

The estimated impact would be significant, potentially reducing the group’s enterprise value for shareholders by approximately 40 percent.

The proposal was subsequently rejected by a majority in the Norwegian Parliament. Based on the current composition of Parliament, there is presently no majority in favor of introducing such a change.

Shareholders willingness to invest in more green energy in our home market might be influenced.

Småkraft has a group insurance policy for the liability of the Company’s and its subsidiaries’ Directors and Officers. The insurance covers personal legal liabilities including legal costs for defence.