First half of 2026Småkraft Group

In 1H 2026 production in Småkraft was 741 GWh compared to 785 GWh in 1H 2025, a decrease of 6 percent. The average spot prices obtained per MWh increased by 118 percent to 71.3 EUR/MWh, compared to the first half of 2025. However, there was no halted production in 1H 2026 related to low power prices, while during the same period in 2025, production volumes of 13 percent were curtailed due to low power prices. Småkraft has production capacity in seven different price areas in Norway and Sweden, and the spot prices obtained per MWh varied significantly between these areas.

Recognised total power revenue for 1H 2026 was EUR 53 million, up from EUR 25 million in 1H 2025.

In 1H 2026, the mark-to-market valuation of energy derivatives resulted in an unrealised negative value change of EUR 4 million, compared to EUR 1 million in 1H 2025. According to IFRS, these future hedge contracts, which will be realised in the coming year, are recognised in the Financial Statements at market value at period end. However, production and revenues are not recognised until the date of production. Therefore, in the first half of 2026, the EBITDA includes negative unrealised hedge revenues with no cash effect.

The impact of a stronger NOK compared to EUR in 1H 2026 represents a general increase of 4.2 percentage compared to 1H 2025. This affected the reported EUR figures for 1H 2026. This is particularly relevant for operating expenses, as these are primarily denominated in NOK.

Net financial items amounted to positive EUR 11 million in 1H 2026, compared to negative EUR 11 million in 1H 2025, reflecting a positive change of EUR 22 million. This improvement is mainly attributed to change in unrealised currency differences related to external financing in EUR in 1H 2026 compared to 1H 2025.

Interest items were broadly in line with 1H 2025. Remaining change in financial items is related to fair value changes in currency derivatives.

Småkraft focuses on selected Alternative Performance Measures (APMs) to measure performance from operational activities. Please refer to the Appendix for detailed information.

Adjusted power revenues, which includes realised financial power hedges, increased by 130 percent for 1H 2026 compared to 1H 2025 due to higher realised spot prices.

Adjusted EBITDA, which isolates operating profit from the unrealised value change of energy derivatives, was EUR 32 million in 1H 2026, which is almost 5 times the level reported in 1H 2025.

Cashflow from operations was EUR 27 million in 1H 2026, compared to EUR 8 million in 1H 2025.

Investment cash flows decreased from EUR 36 million in 1H 2025 to EUR 11 million in 1H 2026. The investments were partly financed by capital injections from owners amounting to EUR 6 million in 1H 2026 and EUR 30 million in 1H 2025. Inflows from loan raising were EUR 5 million in 1H 2026.

During the first half of 2026, Småkraft successfully refinanced its EUR 50 million Green Bond 2 through a bank facility at attractive terms. The refinancing demonstrated continued strong access to competitive financing.

As of 30 June 2026, total cash deposits were EUR 46 million, plus time deposits of EUR 1 million. Småkraft also has an undrawn revolving bank loan facility of EUR 20 million, providing a solid cash position.

The strong cash position allows Småkraft to fund upcoming investments, meet financing obligations and navigate the current volatile power price environment.

The group’s total assets as of 30 June 2026 were EUR 961 million. The equity ratio at the end of June 2026 was 46 percent, which comfortably exceeds the external debt covenant requirement.

According to the Norwegian Energy Regulatory Authority (NVE), the Norwegian power balance is expected to weaken in the coming years. As society’s demand for renewable energy continues to grow, Småkraft has maintained its efforts to develop renewable energy projects in collaboration with its suppliers and partners.

As of 30 June 2026, Småkraft had 14 power stations under construction, with an expected total production capacity of 246 GWh. These hydro power plants are scheduled to commence operations, and with 64 GWh during the remainder of 2026 and 182 GWh in 2027. In total, these projects represent investments amounting to EUR 120 million. Småkraft AS’s shareholders have committed approximately EUR 70 million of equity related to these projects, which will be injected into Småkraft before the projects are finalised. The remaining investments will be financed through external debt.

For the past few years, Småkraft has been the largest contributor of new renewable energy to the Norwegian grid, to a large degree due to a halt in large-scale wind and hydropower development according to NVE statistics. The company continues to have the highest capacity of renewable energy (hydro, solar and wind) under construction in Norway.

During the first half of 2026, Småkraft signed 9 new contracts with landowners who wish to build power stations in collaboration with Småkraft.

Småkraft adopts a long-term perspective, balancing healthy production and earnings while also prioritizing the preservation of biodiversity and local value creation. Although small-scale hydropower generally has a relatively small environmental footprint, Småkraft continuously strives to limit environmental risks and negative impacts during both construction and production by complying with governmental requirements.

In addition to improving the overall sustainability of new development, Småkraft invests in projects to upgrade older power plants, to enhance co-existence and better conserve local ecosystems.

Småkraft collaborates with key stakeholders and the small-scale hydropower industry association, Småkraftforeninga, to share knowledge and build competencies aimed at enhancing environmental and social sustainability across the Nordic hydropower industry.

In collaboration with Climate Futures, Småkraft contributed to two scientific papers being published in the first half of 2026. Thestudies improve production and streamflow estimates for run-of-river hydropower using machine learning and demonstrates that more accurate day-ahead production forecasts can reduce imbalance costs and market risk. This strengthen the basis for both Småkraft’s short-term forecasting and long-term production planning.

Further, Småkraft has maintained strong performance on key quality indicators. Short-term sick leave decreased to 1.3% in the first half of 2026. Management is closely monitoring this trend and considers the sick leave percentage to be within acceptable levels. Småkraft also tracks incidents that lead to lost time for both employees and its partners/suppliers. In the first half of 2026, no such incidents resulting in lost time with our suppliers were reported.

Småkraft stands as the leading sustainable hydroelectric power producer in Europe. In 2025, Småkraft once again secured its strong position in GRESB's annual review of companies’ ESG reporting with scoring of 99 out of 100 and earning 5 out of 5 stars.

Hydrology, power prices and capture rates remain the main risk factors for the upcoming periods. Only a few of the Småkraft AS power plants have reservoirs, and unregulated power production is more exposed to fluctuations than regulated production of electric power.

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, we assess how climate change can affect the design criteria for new installations, both in form of change in expected run-of, but also the safety of installations in relation to extreme weather.

As of 30 June 2026, Småkraft has signed construction contracts that will add 246 GWh to its portfolio. Småkraft’s shareholders have committed equity for at least 50 percent of the agreed price of these investments. The company is actively working with banks and debt investors to secure financing for the remaining investments. Several ongoing construction projects will be finalised, and construction loan facilities are expected to be transitioned to and refinanced with long-term debt structures.

Småkraft AS’s main bank facility of EUR 202 million matures in June 2027. Småkraft will during 3Q 2026 start the dialogue with its lenders for the refinancing of this facility.

Changes in interest rates may also influence our financial results. For Småkraft, it is important to reduce interest rate risk through different final maturity dates on all loan facilities as well as interest rate hedging. Småkraft’s current interest rate hedging covers more than 50% of its loan portfolio.

The Nordic commodity markets for power are still less liquid than in the past, making financial hedging activities challenging. Shifts in future power prices lead to changes in the unrealised value of energy derivatives, which affects equity and the equity ratio. Småkraft has halted its hedging activities and has no open power hedging contracts after November 2026.

Småkraft’s financial statements are presented in EUR. However, the functional currency of the company is NOK. Therefore, Småkraft’s financial statements are affected by currency exchange fluctuations between NOK and EUR, in addition to interest rate changes. This may lead to changes in equity and equity ratios.

No material events have occurred after 30 June 2026.

The Board of Directors of Småkraft AS,
Bergen, Norway, 26 August 2026