Second half of 2025Småkraft Group

Småkraft curtailed production of 169 GWh in NO4 and NO3 during 2H 2025 due to negative power prices and imbalance costs. The situation was primarily driven by high reservoir fillings, especially in Northern of Norway. Strong price level in November and December balanced out the weak performance in third quarter.

Total production in 2H 2025 amounted to 703 GWh, compared to 951 GWh in 2H 2024, representing a 26 percent reduction. Taking into account curtailed production due to negative prices in NO3 and NO4, the production is 8 percent below 2H 2024. The average achieved spot price increased by 82 percent to 40.3 EUR / MWh in 2H 2025 compared to 2H 2024, reflecting significant price variations across the seven Norwegian and Swedish price areas in which Småkraft operates. For further details refer to Note 3.

Recognised total power revenue for 2H 2025 totalled EUR 28 million, an increase of 33 percent compared to 2H 2024.

The mark-to-market valuation of energy derivatives resulted in an unrealised positive value change of EUR 2 million in 2H 2025, compared to EUR 9 million in 2H 2024. In line with IFRS requirements, these future hedge contracts are measured at fair value, while production- revenues are recognised upon generation. Consequently, EBITDA for the period includes unrealised hedge revenues with no cash impact.

Net financial items amounted to EUR 7 million in 2H 2025, compared to EUR 26 million in 2H 2024, reflecting a positive development of EUR 19 million. This improvement was mainly driven by reduced disagio on external EUR financing, as well as EUR 1 million decrease in interest expense resulting from lower EURIBOR compared to 2H 2024.

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

Adjusted power revenue, which includes realised financial power hedges, increased by 14 percent for 2H 2025 compared to 2H 2024.

Adjusted EBITDA, which isolates operating profit from the unrealised value change of energy derivatives, was EUR 6 million in 2H 2025, compared to EUR 5 million in 2H 2024.

Cashflow from operations was a positive EUR 16 million in 2025 compared to EUR 13 million in 2024.

Net cash flow from investment activities increased in 2025 compared to 2024, due to a higher number of acquired power plants. These investments were financed through capital injections from shareholders amounting to EUR 59 million in 2025 and EUR 32 million in 2024. During 2H 2025, Småkraft successfully completed a NOK 394 million refinancing of recently acquired and recently closed construction projects. The net proceeds were used to refinance 15 power stations acquired during 2024 and 2025. Gross inflows from new loan facilities amounted to EUR 14 million.

As of 31 December 2025, total cash deposits were EUR 33 million, excluding time deposits of EUR 1 million. Småkraft also has access to an undrawn revolving credit facility of EUR 20 million, providing the group with a solid cash position.

This strong cash position enables Småkraft to support upcoming investments, meet refinancing obligations and manage the current volatile power price environment.

The group’s total assets amounted to EUR 917 million as of 31 December 2025. The equity ratio at the end of 2025 was 44 percent, comfortably above the external debt covenant requirement of minimum 30 percent equity ratio.

In recent years, Småkraft has continued to expand its portfolio through the acquisition of operating hydropower plants and construction of new plants. During the second half of 2025, the company maintained focus on construction and development of new power plants. According to the Norwegian Energy Regulatory Authority (NVE), the Norwegian power balance is expected to weaken over the coming years. With society’s increasing demand for renewable energy, Småkraft has continued its efforts to develop renewable energy projects in collaboration with its suppliers and partners.

As of 31 December 2025, Småkraft had 15 power stations under construction, with a total production capacity of 255 GWh. These hydro power plants will commence operations with 216 GWh in 2026 and 39 GWh in 2027. The total investments for these projects amount to EUR 136 million. Småkraft AS’s shareholders have committed EUR 70 million in equity, which will be injected into Småkraft prior to projects completion. The remaining financing will be secured through external debt facilities.

Småkraft has for several years been the largest contributor of new renewable energy to the Norwegian grid, largely due to limited development of large-scale wind and hydropower projects. The company also continues to have the highest capacity of renewable energy under construction in Norway.

Småkraft remains committed to advancing these projects towards investment decisions, with several opportunities, including acquisitions and new construction projects, approaching final approval.

During the second half of 2025, Småkraft signed four new agreements with landowners seeking to develop hydropower stations in partnership with the company.

Småkraft maintains a long-term perspective, balancing stable 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, complying with governmental and EU taxonomy requirements

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

Fosstveit power plant exemplifies our commitment to preserving biodiversity. Following investments and innovation to improve fish welfare, Småkraft reports promising results. Data indicates that the smolt and eel are now safely navigating past the turbine, suggesting that the new intake, combined with a surface escape route, effectively ensures safe downstream migration.

Recent measurements indicate that 80 percent of the PIT-tagged smolt used the escape route past the power plant, marking an improvement from previous results. No dead smolt or eel has been found in 2H 2025, suggesting that the modifications effectively prevent the fish from entering the turbine.

In 2H 2025, Småkraft conducted status surveys of the freshwater pearl mussel in Fulldøla – Follsjå. The results show that the population is larger than previously assumed. Recruitment of younger mussels, however, remains weak, consistent with findings from 2018 and 2022. The cause is still unclear, and Småkraft will continue to monitor the development and implement measures if needed to strengthen the population.

Småkraft collaborates closely 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 region.

Småkraft continue to demonstrate strong performance on key quality indicators. Short-term sick leave has decreased to 1.2percent in 2H 2025. Management is closely monitoring this trend and considers the sick leave percentage to be within acceptable levels. Småkraft also measures incidents resulting in lost time for employees as well as for partners and suppliers. In 2H 2025, one minor incident occurred involving a supplier, however it did not result in any lost time.

Småkraft remains the leading small-scale sustainable hydroelectric power producer in the Nordics. In 2025, Småkraft reaffirmed its strong ESG reporting position by achieving a score of 99 out of 100 in GRESB's annual assessment and earning the highest possible rating of 5 out of 5 stars.

Hydrology and power prices continue to represent the most significant risk factors for the periods ahead.

The Nordic power markets remain less liquid than previous years, making financial hedging activities challenging. As a result of fluctuations in forward power prices lead to changes in the unrealised value of energy derivatives, which in turn affect equity and the equity ratio. Småkraft discontinued its hedging activities during the summer of 2021.

Interest rates developments also influence the group’s financial performance. Småkraft mitigates interest rate risk through a diversified maturity profile across loan facilities and through interest rate hedging. As of year-end 2025, more than 50 percent of the group’s loan portfolio was hedged.

Due to substantial expansion, Småkraft is continuously working on various financing initiatives involving both new equity and debt. As of 31 December 2025, Småkraft has signed construction contracts that will add 255 GWh to its portfolio.

Småkraft’s shareholders have committed equity for at least 50 percent of the agreed investment amounts,. and the company is actively engaged with banks and debt investors to secure financing for the remaining portion. Several ongoing construction projects will be finalised in the coming years, with associated construction loan facilities expected to be transitioned to and refinanced into long-term debt structures.

In October, the Norwegian government published a consultation paper proposing a reduction in the resource rent tax threshold 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 material, reducing the group’s enterprise value for shareholders by approximately 40 percent. Based on the current composition of the Norwegian Parliament, there is no majority in favour of the proposed change.

As per 31 December 2025 the working capital is negative due to long term loan facilities of EUR 74.7 million classified short term. Green Bond 2 of EUR 50 million is due in April. The company is well advanced in the refinancing process of this bond facility, which is expected to be executed on or before due date.

The Board is presenting the financial statements based on going concern.

Småkraft presents its financial statements in EUR, while its functional currency is NOK. Accordingly, Småkraft’s financial reporting is affected by fluctuations in the NOK/EUR exchange rate as well as movements in the interest rate, which may influence both equity and equity ratios.

On 4 February 2026, Frostating Lagmannsrett issued a verdict in a case brought by the landowners related to the remuneration model. The court ruled fully in favour of Småkraft, confirming the validity and sound principles of the applicable remuneration model that has been applied since Småkraft was incorporated. The verdict was unanimous. The appeal deadline is set to 4 March 2026.

The Board of Directors of Småkraft AS,
Bergen, Norway, 24 February 2026