# 2024Annual report

## Table of Contents

1. About Småkraft
   1. Corporate Strategy
   2. Core values
   3. Småkraft at a glance
   4. 2024 in brief
   5. Key figures for the Group
2. CEO Letter
3. Sustainability
4. Our business
   1. Board of Directors
   2. Management team
   3. Corporate governance report
5. Board of Directors’ Report
6. Annual accounts and notes Småkraft Group
   1. Consolidated income statement and
      consolidated statement of other comprehensive income
   2. Consolidated statement of financial position
   3. Consolidated statement of changes in equity
   4. Consolidated statement of cash flow
   5. Notes
   6. Alternative Performance Measures
7. Annual accounts and notes Småkraft AS – parent company
   1. Statement of income and statement of other comprehensive income
   2. Statement of financial position
   3. Statement of financial position, continued
   4. Statement of changes in equity
   5. Statement of cash flow
   6. Notes
   7. Alternative Performance Measures
8. Independent auditor’s report

## About Småkraft

Småkraft is a renewable energy producer. Our 238 hydropower plants are spread across Norway and Sweden and deliver a mean annual production capacity of 2.1 TWh, making Småkraft Europe’s largest owner and operator within its field.

Small-scale hydropower borrows water from the river and utilizes the topography of the landscape to produce renewable and sustainable electricity. A minimum water level is maintained in the original river and the borrowed water, used to produce electricity, is returned once it passes through the turbine. The electricity grid transports and distributes our electricity out to consumers.

The value created is also shared with our other stakeholders, including creditors & debt investors, local landowners, local municipalities, and local communities. Småkraft is investing in the production of new renewable energy and our commitment to further growth is our contribution to the energy transition. We enable renewable energy production with minimal impact and careful consideration of the local environment.

Headquartered
Bergen, Norway

Listed Bond loans Oslo Børs Euronext

CEO
Terje Vedeler

Website www.smaakraft.no

### Corporate Strategy

Our mission is to create sustainable values for the next generation by investing, developing and operating small-scale hydropower plants.

Quality, Health, Safety and Environment Management are of critical importance to Småkraft, and we strive for high quality performance and safe and secure operations through continuous improvement programs. We aim for organisational robustness, zero injuries and failures, strong cyber and physical security, delivered by a competent and motivated workforce both at Småkraft and by our partners.

We have invested in an operational surveillance centre to operate our power plants, providing technological and management support to back- up operations. This integrated approach delivers tangible benefits, such as increased efficiency, reduced down-time, reduced costs, and improved planning and security.

### Core values

Småkraft has identified three core values that help define and lead our business:

Sustainable

- think and act long term
- care about both local and global environment
- conclude our decisions on facts and knowledge
- prioritise security for our employees and business partners

Creative

- seek new and better solutions
- maintain proven processes
- create added value

Honest

- be consistent in our communication and share knowledge
- deliver as promised
- tell the truth

### Småkraft at a glance

### 2024 in brief

#### Achieving ambitious growth targets

- Increased production capacity with 70 GWh in 2024
- Power revenue and adj. EBITDA further curbed by reduced electricity prices
- Solid pipeline of power stations under construction and planning

Increased renewable power production

Added production capacity of 70 GWh. Total production of 1811 GWh, 20 percent increase compared to 2023.

Upgrading plants for improved sustainability

Implemented new technical solutions securing passage for fish at Fosstveit powerplant.

Decreased system prices

The average monthly Nordpool system price was reduced from 56 EUR/ MWh in 2023 to 36 EUR/ MWh in 2024.

Limited interconnector capacity between north and south still gives significant price differences between the Nordic price areas.

Adding capacity, expanding powerplant pipeline

Ongoing construction program securing additional 289 GWh over the next two years.

Tap issue of EUR 24.5 mill to Green Bond 3.

### Key figures for the Group

##### Alternative Performance Measures (APMs) ref appendix

Adjusted power revenue
EUR million

47.2

-6.5 percent Y/Y

Adjusted EBITDA
EUR million

18.1

-19.1 percent Y/Y

##### Key metrics

Amounts in EUR million | 2024 | 2023
--- | --- | ---
Power revenue | 54 | 68
Profit (loss) before tax | -21 | 35
Cash flow from operations | 13 | -22
Production volume GWh | 1,811 | 1,504
Avg achieved prices (EUR / MWh) | 30.1 | 45.1

## CEO Letter

###### Småkraft constructs 26% of all new renewable energy projects in Norway

In 2024, Småkraft continued its expansion. Once again, the company had the largest contribution to strengthen renewable energy production in Norway, with an increased annual production capacity by 70 GWh for the full year. As NVE presents their updated statistics, Småkraft is constructing 26% of all new renewable projects under construction in Norway year-end 2024. This is a remarkable achievement for a team of 33 men and women. As CEO in Småkraft, I am proud to see how our employees, partners and landowners manage to lead the way and “walk the talk”. Year after year, we continue to create, invest, and grow.

Over the next years, our Scandinavian home market will electrify transportation, properties, and industry. There is a pressing need for new renewable energy as we need more production to match the increased demand. We continue to work actively with landowners, municipalities, grid operators and regulators to develop new capacity.

We will continue to grow and at year end, Småkraft had 21 power plants with annual production capacity of 289 GWh under construction. In addition to this, we have a pipeline of projects that we are working to mature into investment ready power plants in the years to come.

However, Småkraft’s history since 2002 proves that constructing renewable energy is consistent hard work and depend on detailed planning over time. We need to plan today for the investments we will do in three to five years from now. Thus, we have focused on expanding our project pipeline with great success.

###### Industrializing small-scale hydro power is necessary for profitability in a complex renewable energy sector

One of Småkraft’s main strategic goals over the last years has been to industrialise the company. Nearly all of our powerplants are operated and controlled remotely. We use state of the art digital technology to continuously identify critical parameters to improve our environmental, safety and productivity performance. We will not be able to continue our growth path without great partners, robust processes and supporting technology. We are blessed with more than 1100 landowners who challenge, supports, and bring us local competence and new ideas. World- class specialized and generalized suppliers within small scale hydro work side by side with our operations and technical department. Our goal is always to tear down the barriers between the suppliers and Småkraft. We believe that robust processes combined with our core value “Honesty” will make the unique teamwork Småkraft has with its partners even more valuable in future.

We have come a long way in industrialising Småkraft, but we still have a lot to do. This is work that we take on with great enthusiasm.

Complexity within the renewable energy sector increases. Because of interconnectivity of the energy system, geopolitical changes and climate changes that influence the precipitation patterns, we see more volatile prices that may influence profitability.

To face these challenges and grasp the represented opportunities, small scale hydro power companies need to invest in technology, systems, and knowledge. This is challenging for single small scale hydro power plants or companies with small portfolios of power plants, as the investments and know-how needed are significant compared to the value of a small or few power plants. To Småkraft, this represents great opportunities, as we are big enough to capitalise on economies of scale and synergies.

###### Sustainability is an important part of Småkraft’s strategy

Although small-scale hydropower generally has a relatively small environmental footprint, Småkraft continuously strives to limit environmental risks and negative impacts during construction, production and operations. Our objective is to develop more renewable energy while preserving nature and biodiversity in line with the governmental requirements. We also want to build strong local communities. This approach is applied both at existing plants and for new projects.

An example of this is the re-opening of the Fosstveit power plant in the second half of 2024. Following significant investments and improvements, we successfully reduce the high fish mortality rates in collaboration with NORCE (Laboratory for Freshwater Ecology and Inland Fisheries).

Utilizing the scale effects of large portfolios has always been a part of Småkraft’s investment strategy. In the current environment, these effects will be even more important for our performance than before. We strongly believe that our operations differentiate Småkraft from others. Improved operational performance will lead to better financial performance, providing better returns for our investors and offer improved downside protection for our creditors. In addition, it will pay better land lease returns to our landowners. Finally, getting more electricity out of the natural resources available to us, is probably one of the most sustainable ways to get more renewable energy.

###### Our operations are essential to meet these goals

Our operational model is set up as a digital and physical loop between the local operators living next to our power stations, the internal Småkraft technical team and its local partners, and the centralised operation centre. Småkraft has invested significantly into this operational model and professionalised our operational centre with technological and human resources we did not have before. Our inhouse technical team has identified the best local and regional partners to perform modifications, upgrades and repair. We have invested in training and equipment for our local operators who are more professional than ever. Finally, we continue to invest in improved solutions for our power plants.

###### Diversifying financing sources

New power stations demand large investments. Building renewable energy requires capital. Småkraft has strong committed owners that have contributed to the company’s growth. Our strategy is to work closely with partners that offer competitive and responsible financing, both equity and debt. Småkraft has diverse financing sources consisting of bank debt, bond obligations and US private placement financing. Having built trust over the last ten years with financing partners such as local Norwegian banks, larger Nordic banks, institutional Nordic Green Bond Investors and large private debt investors, gives us access to diversified financing opportunities that help us achieve our goals.

The last two years, interest rates have increased significantly. As Småkraft is investing in hydropower that last for decades, we have tried to find a good balance between fixed and floating interests that suits our long-term focus.

In June 2024, Småkraft completed a senior secured EUR 160 million refinancing of our main bank facility in addition to secure a EUR 20 million revolving credit facility, with our Nordic relationship banks.

During the second half of 2024, Småkraft successfully completed a EUR 24.5 million bond tap issue at an attractive pricing, financing 11 power plants acquired during 2023/2024.

## Sustainability

Sustainability is an integrated part of Småkraft’s strategy and business model. In recent years, Småkraft and its peer companies have faced increasing reporting requirements related to Environmental, Social and Governance (ESG) topics. Småkraft views these requirements positively, as they enhance transparency and focus on meaningful actions. Småkraft is committed to align its processes with the EU Taxonomy, the EUs Sustainable Financial Disclosure (SFDR) and other evolving reporting standards such as the Task Force for Climate Change (TCFD). For the financial year 2024, Småkraft will voluntarily report on double materiality as outlined in the Corporate Sustainability Reporting Directive (CSRD). In 2024, Småkraft once again secured its strong position in GRESB’s annual ESG reporting assessment. Småkraft will continue to strive for transparency in its interactions with the environment and society, as outlined in a separate Sustainability Report.

Sustainability is about creating meaningful impact, managing risks, seizing opportunities, making strategic investments and optimizing processes. Småkraft prioritizes investing in topics we have identified as the most material to Småkraft and its stakeholders.

Småkraft’s main efforts are concentrated on the following topics:

###### Climate Change

Småkraft’s production history shows that climate change leads to more precipitation and more extreme weather. This influences production, and it may increase the forces Småkraft’s installations need to sustain. Over the past few years, Småkraft has experienced a continued pattern of more extreme weather. Also in 2024, storms have had negative impact on infrastructure in Norway. While most of Småkraft’s power plants have proven resilient to the storms, there have been examples of flood damages. These incidents represent a small portion of Småkraft’s overall portfolio and proves the company’s ability to manage and recover from extreme weather events. Still, it is essential for Småkraft to understand how future climate change is likely to influence its power plants.

Småkraft, along with other companies in sectors vulnerable to climate change such as energy, food production, shipping, and insurance, has joined forces with leading research groups in a center for research-based innovation called Climate Futures. In the center, Småkraft has partnered with NORCE and the Norwegian Computing Center (NR) to develop sub-seasonal runoff forecasts. Going forward, the focus will shift to understanding how climate change will impact runoff in the catchments where Småkraft operates.

###### Life Cycle Emissions

Producing renewable energy generates significantly lower carbon emissions compared to other energy sources. Additionally, due to its long lifetime, small-scale hydro is efficient compared to other renewable energy options, with minimal carbon emissions per unit energy produced.

In discussion with key stakeholders about important ESG topics for Småkraft and the environment, emissions have been highlighted. As almost 100% of the life cycle emissions from small-scale hydro come during construction and upgrading activities, Småkraft has increased its focus on understanding these emissions. Småkraft has analysed such emissions for both new-builds and existing power plants. This analysis provides valuable insight that can be utilised to reduce emissions in future construction projects, in close cooperation with Småkraft’s partners.

###### Biodiversity

All energy production, including small-scale hydropower, has an impact on the local environment. Småkraft changes the flow patterns of the river between the intake and the power plant, which may affect the biodiversity and vulnerable species in and around the river around the power plant, the penstock and the intake.

The majority of Småkraft’s power plants are governed by restrictions on water flow for energy production. This implies that power plants must release water to the river to ensure ecological water flow and avoid drought. All Småkraft sites are inspected annually to detect and report negative impacts. Data from these inspections is what is reported in our ESG report, and not a 24/7l surveillance.

Other key concession requirements are bypass valves that ensure sufficient water in the river during an immediate production stop, restrictions regarding water level regulation in the reservoir or specific water flow requirements.

Småkraft from time to time invests in power plants that may not operate in compliance with the governmental intentions. This is assessed and reflected in the investment process, where Småkraft decides on upgrades to meet the requirements. In most cases, these investments are minor. However, in some cases, Småkraft needs to invest significantly to increase the environmental standards.

Fosstveit power plant is an example of this. Småkraft bought the power plant in 2022, aware of the high fish mortality in the river caused by fish and eel swimming through the turbine. After two years of significant reconstruction, the power plant in Tvedestrand municipality reopened in August 2024 with considerable improvements. The results from the second half of 2024 are promising, showing tagged smolt and eel that are able to pass the powerplant with significant reduction in mortality. This which indicates that the new intake, combined with a surface escape route, ensures improved downstream migration bypassing the power plant.

###### Social responsibility for own employees

In Småkraft, all critical functions of the company are to be covered by permanent employees. Non-critical functions are outsourced to suppliers to ensure larger professional environments and access to capacity, but the company possess ordering expertise in all disciplines to ensure the quality and efficiency of the services requested.

The company strives to offer equal pay for equal work. Småkraft does not give preference to or discriminate against employees based on gender, ethnicity, sexual orientation or religion, and strive to achieve a better gender balance through recruitment efforts and prioritise gender equality when conditions otherwise are equal. Confidential handling of reports is ensured through the available whistleblowing channel on Småkraft’s website.

The company conducts annual employee surveys to assess the internal working environment and analyse trends and implement measures. In Småkraft’s 2024 employee survey, its employees reported zero cases of discrimination. Additionally, the employees state that sustainability is a crucial factor in their choice of employer.

###### Local communities value creation

Hydropower plant installations may have some negative consequences for people in the local communities. Småkraft aims to reduce these negative consequences as much as possible. The company follows requirements in the license provisions and does the utmost to make sure that the hydropower plants successfully harmonise with the natural environment.

Småkraft's business model shares values with the local communities. The company’s operating procedure and management models ensure that large parts of the value creation from a small-scale power plant are local. In 2024, Småkraft made direct payments of more than EUR 65 million to municipalities throughout Norway through its investments, maintenance, operations, tax payments and waterfall lease payments. These payments will result in major ripple effects especially in minor municipalities where Småkraft is present with its small-scale power plants.

Rysna power plant in Vang municipality is a good example of this. In 2024, Småkraft celebrated the opening of the power plant. After a construction period, one of the landowners described the project as a positive contribution to the local community. Through the joint efforts of the landowners, the local entrepreneurs played a crucial role in the development of the power plant. This contributes to economically strengthen the local community.

###### Ethical business practices

Ethical business is about doing the right thing. Småkraft makes a living from creating and sharing resources that many people have interests in. For us, it is therefore fundamental to act transparently towards landowners, suppliers, authorities, investors and creditors. Småkraft shares information, as long as this is available, and sharing is not in breach with privacy regulations or negatively affecting competitive strengths. Transparency is crucial for the stakeholders, as it allows them to understand the rationale behind Småkraft’s decisions. Additionally, ethical business practices are important to stakeholders, as it reflects Småkraft’s commitment to integrity and responsibility.

Småkraft has implemented robust internal control measures to mitigate the potential for fraud or misconduct. In 2024, Småkraft encountered minor attempts of “CEO fraud” and similar schemes. Fortunately, all such attempts have been successfully detected by Småkraft’s or its partners security mechanisms. Over the past years, Småkraft has introduced a number of security measures to protect against fraud and attacks.

## Our business

Småkraft’s business model is to bring capital and competence forward to communities that own natural resources they want to utilize to create renewable energy. Our access to competence and capital combined with the commitment from the communities give us a unique position to create long-term partnerships between long-term investors and the communities around our installations.

We enter long-term lease contracts with the landowners who own the rights to utilize the rivers as part of their property. During this lease period, Småkraft operates the power stations as safe, efficient and sustainable as possible. The profits we generate are shared between Småkraft and the landowners in line with the contract. After the land lease period is finalized, the landowners have the rights to get the power station back at predefined terms.

During the operational phase, the power stations feed electricity into the grid. The grid transfers the electricity to the consumers

### Board of Directors

Annette Malm Justad

Chair

- Master in Technology Management and Master in Chemical Engineering
- More than 25 years of operational experience from Yara and Norsk Hydro, including shipping, and as CEO of listed EMS ASA
- Chair and Board Member of several listed and private companies

Claudia Ahnert

Board Member

- Degree in law from TU Dresden
- 7 years’ experience with hydropower as an Investment Manager at Aquila Capital
- 15+ years’ experience from legal sector, financial industry and renewables

Oldrik Verloop

Board Member

- LL.M. in Dutch Civil Law, Leiden University, and MBA, St. Gallen University
- 9 years’ experience with hydropower as Co-Head of Hydropower and Asset Management roles at Aquila Capital
- Advisor and Board Member of international private companies

Felix Renneke

Board Member

- LL.M. in corporate law, mergers and acquisitions, FOM University
- More than 10 years’ experience in the renewable energy industry
- Head of Asset & Fund Management, Hydropower, Aquila Capital
- 2 years’ consulting experience at PwC

### Management team

Terje Vedeler

Chief Executive Officer

- MSc in Hydropower Engineering from Norwegian University of Sciences and Technology (NTNU)
- 30 years’ experience in leading positions in companies including Framo, FMC, Aker Solutions and Frydenbø Industrier

Pia Christine Helland

Chief Financial Officer

- MSc in Finance (Siv.øk) from Norwegian School of Economics and Business Administration​, Master in Law (Cand.jur) from University of Bergen​, Executive Master Program in Sustainable Business Strategy from Norwegian School of Economics and Business Administration​
- More than 20 years of experience from various positions in Corporate Banking, Corporate Finance and Equity Capital Markets

David Inge Tveito

Chief Operational Officer

- MSc in Electrical Energy Engineering from Norwegian University of Science and Technology (NTNU)
- 20 years’ experience in energy companies including Statkraft, Scanenergy and Captiva

Bjarte Skår

Chief Commercial Officer

- 21 years’ experience as Head of Hydro at Brødrene Dahl AS
- 2 years as Chief Executive Officer at Hywer

### Corporate governance report

The corporate governance statement clarifies the distribution of roles between the owners, the board and the management in the company.

Efficient and transparent management and control of the business forms the basis for creating long-term value for the owners, employees, other stakeholders and society in general, and as a result, contributes to sustainable and lasting value creation. The distribution of roles inspires confidence among stakeholders through predictability and credibility. Open and accessible communication from the company ensures that the Group maintains a good relationship with society in general and with all stakeholders affected by the company’s activities.

###### Corporate governance statement

Småkraft AS is the parent company for an underlying Group structure, the Småkraft Group. Småkraft adheres to the Norwegian Code of Practice for Corporate Governance (NUES) within the framework established by the company’s organization and ownership.

Småkraft is subject to reporting requirements relating to corporate governance according to Section 2-9 of the Accounting Act.

The company’s annual report includes a statement on corporate responsibility.

###### Business

The objective of Småkraft AS, alone, or through participation in, or cooperation with other companies, is to operate, maintain, and optimize energy facilities, conduct physical and financial energy trading and perform naturally related operations. Growth is handled through acquisitions and turnkey contracts, and Småkraft AS is registered in Norway and its management structure is based on Norwegian company legislation. Småkraft is also subject to the Norwegian Securities Trading Act and stock exchange regulations associated with the company’s debt obligations.

###### Equity and dividends

Småkraft AS’ share capital totals NOK 271,865,850 divided among 5,437,317 shares of NOK 50 each. Capital increases are processed through the General meeting of shareholders in Småkraft AS. The Companies Act states that the general meeting cannot adopt a higher dividend than that proposed or accepted by the Board of Directors.

The Board of Directors maintains a continuous focus on adapting the company’s objectives, strategy and risk profile to the company’s capital situation. Småkraft’s investments are financed through a combination of retained capital, borrowings and new equity contributed by the owner.

###### Equal treatment of shareholders and transactions with related parties

Småkraft engages in some transactions with companies that are closely related to Småkraft’s shareholder. All transactions are based on regular market terms and principles.

The instructions to the Board of Directors state that neither board members nor the CEO may participate in the processing or resolution of issues that are of substantial personal or financial interest to them or closely related parties. Any persons in such a situation must, on their own initiative, disclose any interest they or their closely related parties may have in the resolution of an issue.

###### General meetings

The owners exercise their authorities in the General Meeting of Småkraft. Before the general meetings the Board of Directors decides in matters assumed to be of significant importance for the purpose of the enterprise/ company, or which will significantly change the character of the activities.

###### Nomination committee

Småkraft AS has no nomination committee. The election of the board members appointed by the owners in Småkraft AS will take place in the general meeting.

Board of directors: composition and independence Småkraft AS has four board members. The goal is for the board to collectively represent the desired expertise based on the company’s objective, business area, challenges and the owners’ goals.

###### The work of the board of directors

The Board of Directors usually meets eight to ten times a year. The Chair of the Board of Directors will call for board meetings as often as is required. The Board of Directors has stipulated board instructions with guidelines for the work and case processing of the board. The instructions also cover the CEO. The instructions define the work scope, duties and authorities of the CEO in more detail than follows from the legislation.

The Board of Directors prepares an annual agenda for its work, with a special emphasis on goals, strategies and implementation. The Board of Directors informs the boards of subsidiaries of matters of potential significance for the subsidiary in question. The Board of Directors evaluates its own performance and expertise annually.

The board’s Audit Committee comprises three of the Board of Director’s members. The committee functions as a preparatory body for the board’s management and supervision work, and at least one member of the Audit Committee shall have experience in accounts management, financial management or auditing.

###### Risk management and internal control

The internal control concept includes compliance with the company’s value base and guidelines for ethics and corporate responsibility. Risk management is an integral part of all activities across the organisation and of the decision-making process. It supports the decision makers to prioritise their actions. Managers at all levels of the organisation are responsible for appropriate risk management. Risk management is regulated by mandates, requirements and guidelines. Follow-up of risk and risk management are incorporated in the daily business operations.

Risk management and internal control are integral parts of the Board of Directors’ work. To ensure that Småkraft has suitable and efficient systems in place for risk management and internal control, the Board of Directors shall:
• Review the Group’s most important risk areas
• Ensure that the systems are adequately established, implemented and followed up, e.g. through processing of reports submitted to the board by the CEO
• Ensure that risk management and internal control are integrated in the Group’s strategy and business plans

Furthermore, the Board of Directors shall ensure that the CEO has:
• Stipulated instructions and guidelines for how the Group’s risk management and internal control will be carried out in practice
• Established adequate control processes and functions
• Ensured that Småkraft’s risk management and internal control are carried out, documented, monitored, and followed up in a prudent manner
• The Group’s CFO is responsible for the process for Internal Control in the Financial Reporting (ICFR) in Småkraft

###### Remuneration of the board of directors

The Board of Directors do not get remunerated for their work as Directors by Småkraft AS.

###### Information and communication

The Board of Directors has stipulated guidelines for financial reporting and other information. Småkraft AS publishes its annual financial statement. Each year, Småkraft AS releases two interim reports and one annual report.

The financial calendar, press releases and stock exchange notices, interim reports and annual reports and other relevant information are published on Småkraft’s website.

Småkraft emphasizes transparent communication with all stakeholders. The information the company provides to its owners, lenders and the financial markets in general shall provide sufficient details to permit an evaluation of the company’s underlying values and risk exposure.

The owner and the financial markets shall be treated equally, and information shall be communicated in a timely manner.

###### Auditor

The General meeting appoints the auditor based on the Board of Directors proposal and stipulates the auditor’s fee. The auditor serves until a new auditor is appointed.

The Board of Directors and the auditor hold at least one meeting annually where the CEO and other Group executives are not present. The Audit Committee evaluates the external auditor’s independence and has established guidelines for use of the external auditor for consultancy purposes.

As part of the ordinary audit, the auditor presents an audit plan to the Audit Committee including a summary of the audit from last year. The auditor reports in writing to Småkraft’s Audit Committee concerning the company’s internal control, applied accounting principles, significant estimates in the accounts and any disagreements between the auditor and the administration. The Board of Directors is briefed on the highlights of the auditor’s reporting. At the end of the audit the auditor performs a summary meeting with the Audit Committee.

## Board of Directors’ Report

Småkraft AS (the “Company”) is the ultimate parent of the Småkraft Group, comprised of the Company and its subsidiaries (the “Group”). Småkraft is a power generation company, which invests in, develops, and operates small- scale, hydropower plants in cooperation with local landowners.

Småkraft is headquartered in Bergen, Norway, with presence in Harstad, Flatanger, Lillestrøm, Sandnes, Førde, Dale and Gävle. The Group employs 33 people. Småkraft’s power plants are located in all price zones in Norway and in two price zones in Sweden.

Småkraft was established in 2002 and celebrated its 20th year anniversary in 2022 as the largest small-scale hydropower company in Norway. By year end of 2024, Småkraft had 238 operating hydropower plants (231 at year end 2023), with a total accumulated production capacity of 2,160 GWh.

Småkraft is a limited liability company incorporated in Norway with its registered address at Solheimsgaten 15 in Bergen, Norway. The Company is tax resident in Norway. Information related to shareholders can be found at Note 20 and Related parties at Note 24.

##### Equity and shares

As of 31 December 2024, the Group had a book equity of EUR 368 million and a book equity ratio of 43%. The Company has only one class of ordinary shares. Each common share in the Company carries one vote, and all common shares carry equal rights, including the right to participate in General Meetings. All shareholders are treated equally.

The shares and negotiability section of the Corporate Governance Report details the transferability of common shares. The number of registered ordinary shares issued in Småkraft AS as of 31 December 2024 is 5,401,633.

##### ESG and quality

In 2024, Småkraft acquired and constructed seven power stations adding a total of 70 GWh annual capacity to the Småkraft portfolio. Furthermore, Småkraft managed to maintain and expand its pipeline of power stations it constructs together with its partners. Småkraft has signed contracts that add 320 GWh of renewable energy over the next couple of years, and it has a significant pipeline of further projects to mature to formal investment decisions.

The Småkraft business model creates significant value for multiple stakeholders. Småkraft will pay out EUR 5 million in land lease based on the 2024 results.

Småkraft maintained good performance on key quality indicators. Over the past few years, short-term sick leaves have remained stable at below 2.0%. Småkraft closely monitors incidents that result in lost time work time for both employees and its partners/ suppliers. In 2024, Småkraft experienced 2 incidents that led to lost work time, all of which were minor.

Collaborating with turnkey contractors with robust ESG practices is crucial for sustainable and responsible operations in the small-scale power industry. The company has already incorporated the requirements of the Transparency Act in its internal governing documents. Småkraft is currently working with suppliers to obtain documentation ensuring that these defined requirements. Småkraft’s sustainability reports are published on the company website at www.smaakraft.no.

For further details about ESG and social responsibility, please refer to Småkraft’s Sustainability Report 2024 to be published during first half of 2025.

##### Work environment and personnel

Småkraft AS aims to be an attractive employer focused on employee retention and maintaining a positive working environment. The company values diversity of background, interests and knowledge, as it is important for developing the varied and best competencies to conduct Småkraft’s operations effectively. Any form of racism or discrimination is unacceptable at Småkraft.

The Småkraft Group is committed to provide equal opportunities for both men and women. The company acknowledges the under-representation of women within the organisation and the industry and are working systematically to improve diversity. In 2024, two out of five new employees in Småkraft were female. Overall, 24% of Småkraft’s full time employees are female. The Board consists of four Directors, two of whom are female, including the Chair.

##### Outlook

Acceptable price levels and increased volatility persisted during the first part of 2024, while prices dropped significantly in the third quarter.

Production is expected to increase in line with full-year production from power plants acquired in 2024 and new plants coming on stream in 2025. The Småkraft Group is pursuing a growth strategy and intends to invest further in new production capacity over the coming years.

Throughout 2024, Småkraft has continued to seek operational improvement and explore opportunities for growth and diversification. Projects have been initiated to ensure that Småkraft adapts to changes in the energy market. Småkraft strives to remain competitive in what we do and to be resilient to external factors affecting the company.

#### Financial Reviews

##### Consolidated Accounts

Comparable figures in brackets

Småkraft’s financial statements are presented in EUR. However, the functional currency of the company is NOK. Småkraft’s financial statements are therefore affected by currency exchange fluctuations between NOK and EUR.

###### Income Statement

In 2024, Småkraft generated power revenue of EUR 54 million in 2024, a decrease of EUR 14 million or 20% compared to 2023 (EUR 68 million). The decrease is explained by lower power prices.

Production reached 1,811 GWh, a 20% increase compared to 2023. The average obtained spot prices per MWh decreased by 33% from EUR 45 EUR/MWh in 2023 to 30 EUR/MWh in 2024. 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 2024, the mark-to-market valuation of energy derivatives, which hedge about 25%of the expected production for 2025 and 10% of 2026, resulted in a positive unrealized value change of EUR 25 million (compared to EUR 73 million in 2023). 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 7% for 2024 compared to 2023, highlighting the reduction in power prices in 2024 compared to the previous year.

Payroll and related costs remained at the same level as in 2023, at EUR 4.5 million. Depreciations and impairments for 2024 amounted to EUR 22 million (EUR 20 million in 2023). The increase is due to the depreciation of a larger portfolio of hydro power plants and a minor impairment related to six powerplants compared to 2023. Other operating expenses were reported at EUR 25 million, the same as in 2023.

The operating profit for 2024 was EUR 21 million, compared to EUR 76 million in 2023. Excluding unrealized value change on energy derivatives, Småkraft would have reported an operating loss of EUR 4 million, compared to a profit of EUR 2 million in 2023. Adjusted EBITDA was EUR 18 million, down from EUR 22 million.

Net financial items for 2024 reported a loss of EUR 42 million (EUR 41 million in 2023). Gross interest expenses in 2024 were EUR 20 million up from EUR 12 million in 2023. The increase in net interest expenses of EUR 7 million was partly offset by reduced negative impact of net foreign exchange losses and fair value changes of financial derivatives. Long-term financing granted in EUR implied a disagio on borrowings in 2024 of EUR 20 million (EUR 23 million in 2023).

Income tax reports an income of EUR 4 million in 2024 compared to an expense of EUR 8 million in 2023. The recognised tax positions are mainly deferred positions. Payable taxes as of 31 December 2024 were NOK 0 million compared to NOK 1 million per 31 December 2023.

Total comprehensive income 2024 was a loss of EUR 35 million in 2024, compared to a profit of EUR 7 million in 2023.

###### Balance sheet

As of December 2024, consolidated total assets amounted to EUR 854 million (EUR 874 million).

Total non-current assets amounted to EUR 819 million (EUR 812 million). Current assets amounted to EUR 45 million (EUR 62 million). Taking into account time deposits presented as other receivables of EUR 8 million as per 31 December 2024 (EUR 7 million), total cash position was EUR 36 million (EUR 47 million).

Total equity amounted to EUR 368 million (EUR 386 million) a decrease of EUR 18 million, resulting in an equity ratio of 43% (44%).

Total liabilities amounted to EUR 496 million (EUR 489 million). Total borrowings increased by EUR 28 million to EUR 469 million (EUR 441 million).

###### Cash flow

Cash flow from operating activities amounted to EUR 13 million compared to negative EUR 22 million for 2023. This improvement is primarily explained by changes in working capital due to reduced cash outflow to landowners in 2024 compared to 2023, based on earnings from previous years.

Cash outflow from investing activities amounted to EUR 47 million, down from EUR 62 million, mainly due to investment in new power production capacity, either as acquisitions of operating companies or new builds.

The cash inflow from financing activities amounted to EUR 24 million, up from EUR 17 million. Shareholders contributed with new capital of EUR 32 million (EUR 68 million). The Group received EUR 61 million (EUR 123 in 2023) from new loan and paid EUR 36 million (EUR 120 million) in instalments on credit facilities.

Dividends of EUR 15 million (EUR 38 million) were paid to the shareholders.

###### Critical accounting estimates

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 - parent company accounts

Småkraft AS owns nearly half of the Group’s power plants and employs all Norwegian staff within the Group.

###### Income Statement

In 2024, Småkraft AS generated power revenue of EUR 23 million in 2024 (EUR 30 million), a decrease of EUR 7 million or 23%. The decrease is attributed to lower achieved power prices in 2024 compared to 2023.

Småkraft AS has production in all price areas in Norway.

In 2024 the mark-to-market valuation of energy derivatives, which hedge about 25% of the expected production for 2025 and 10% of 2026, caused a positive unrealized value change of EUR 25 million (EUR 73 million in 2023). 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 an increase of 24% for 2024 compared to 2023, primarily due to changes in the realized value change on energy derivatives, which amounted to negative EUR 7 million in 2024 compared to negative EUR 17 million in 2023.

Payroll and related costs showed a small decrease from EUR 4.4 million to EUR 4.2 million in 2024, partly explained by a weaker NOK compared to EUR over the year and lower headcount during some months.

Depreciation and impairments for 2024 was EUR 8.1 million, up from EUR 7.9 million. This increase is due to the impairment of some early-stage growth project that will not be materialised. The overall growth of the group has directly impacted the increase in other operating expenses, which increased to EUR 11 million in 2024 compared to EUR 8.7 million in 2023.

The operating profit for 2024 was EUR 18 million (EUR 66 million). Excluding unrealized value change on energy derivatives, Småkraft AS would have reported an operating loss of EUR 7 million, similar to 2023. Adjusted EBITDA, excluding same MTM adjustment, was a profit of EUR 1 million, the same as in 2023. 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 2024 reported a loss of EUR 23 million compared to a profit of EUR 7 million the previous year. The main reason for this difference is a reduction in recognized distributions from subsidiaries, which was EUR 30 million higher in 2023 compared to 2024. An increase in interest expenses of EUR 5 million was offset by positive developments in negative fair value changes on interest and currency derivatives and lower negative currency fluctuations EUR / NOK for loans granted in EUR.

Income tax income was EUR 1 mill in 2024 compared to an expense of EUR 14 million in 2023.

Total comprehensive income 2024 was a loss of EUR 22 million compared to a profit of EUR 40 million in 2023.

###### Balance sheet

AS of 31 December 2024, total assets amounted to EUR 679 million, compared to 682 million in 2023. Total non-current assets amounted to EUR 661 million, up from EUR 657 million.

Current assets amounted to EUR 17 million, down from EUR 25 million.

Total equity amounted to EUR 385 million (EUR 390 million) a decrease of EUR 5 million, maintaining an equity ratio of 57%.

Total liabilities amounted to EUR 294 million (EUR 292 million). Borrowings increased by EUR 26 million, which was mainly offset by reduced MTM value of derivatives EUR 22 mill. Net interest-bearing debt amounted to EUR 269 million, up from EUR 237 million.

The Group is in compliance with all covenants taking into account that reporting of ADSCR (Annual Debt Service Coverage Ratio) has been exempted for reporting as per 31.12.2024.

###### Cash flow

Cash flow from operating activities amounted to EUR 0 million in 2024 (EUR 11 million).

Cash outflow from investing activities amounted to EUR 36 million (EUR 40 million), primarily due to investments in new power production capacity, either through construction of new plants or acquisitions of operating companies.

Cash inflow from financing activities amounted to EUR 32 million (outflow of EUR 11 million in 2023). Shareholders contributed with new capital of EUR 32 million (EUR 65 million). The Group received EUR 41 million from new loans (EUR 54 million) and paid EUR 15 million (EUR 88 million) in instalments on credit facilities and leases. Dividends of EUR 15 million (EUR 37 million) were paid to the shareholders.

##### Risk review

Risk management is important for value creation and is an integral part of Småkraft’s business activities.

###### Operational risk

Småkraft is exposed to operational risks, such as failure of the power producing equipment or other vital equipment. To limit these risks, the Småkraft Group has well-established procedures and emergency preparedness plans. All power plants are insured, and production is covered by interruptions insurance. Considerable efforts have been made to manage the QHSE risks within the company.

###### Financial risk factors

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 Group is exposed to a range of financial risks: Market-, climate-, liquidity-, currency-, interest rate and credit risk. 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.

###### Market risk

Significant volume, price, and foreign currency exchange risks are associated with the production and sale of electric power. 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.

Hydrology, power prices and capture rates remain the main risk factors for the upcoming periods.

Småkraft halted its hedging activities during the summer 2021, and during 2024 the company has adjusted some of its current hedges to better match its production volatility during the year. Reduced future power prices increase indirectly unrealized hedge loss. The reduction in future prices has decreased the unrealized losses and consequently improved Småkraft’s equity ratio by reversing preceding years derivative accruals.

###### Climate risk

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 now assess 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.

###### Liquidity risk

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 and for operations and to be able to finance its operations and investments in line with the Group’s strategic plan. At the end of 2024, Småkraft held cash and cash equivalents amounting to EUR 36 million including time deposits of EUR 8 million classified as other receivables. This is deemed to be sufficient funding for the Group’s current activity levels and committed capital expenditures during 2025. 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.

###### Foreign exchange risk

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.

###### Interest rate risk

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 56% as of 31 December 2024.

###### Credit risk with power brokers

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.

##### Tax and regulatory risks

By introducing new tax measures for Småkraft’s business, such as windfall taxes and changes in definition of power plants subject to ground rent taxation, Norwegian and Swedish government might increase the tax burden on companies like Småkraft over time. Regulatory risks exposure is furthermore relevant related to environmental requirements defined by governmental bodies.

Pending on new regulations, Småkraft’s profitability over time might be negatively impacted. Shareholders willingness to invest in more green energy in our home market might be reduced.

##### Director & Officer’s Liability Insurance

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.

##### Going concern

###### Going concern assumption

The financial statements have been prepared on the basis of the going concern assumption, which the Directors have confirmed that this was realistic at the time the accounts were approved. In assessing the going concern assumption, the Directors and management have considered cash flow forecasts, funding requirements and production capacity. Despite Småkraft’s geographical diversified production capacity, robust balance sheet with low leverage, and a long-standing relationship with its key lenders, the capital market may become more challenging and future funding sources somewhat more restricted. The Group’s refinancing risk is diversified, and its long-term debt obligations consist of secured bank debt, bonds and USPP financing maturing at different times until august 2034. Taking all relevant risk factors and available options for financing into consideration, the Board has a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future.

In 2024, Småkraft successfully refinanced its EUR 160 million main bank facility, which also includes an undrawn revolving credit facility of EUR 20 million. In November 2024, Småkraft issued a tap issue on Green Bond 3, raising EUR 24.5 million at favourable terms. There are no major loans maturing in 2025.

Based on this the Board is presenting the financial statements on going concern.

##### Subsequent events

After year-end, Småkraft has increased the portfolio of power plants. On 31 January 2025, Småkraft completed the acquisition of 100% of the shares in Nye Grøvla Kraft AS and Våmåns Kraft AB, which have power plants in operation with a capacity of 7.3 and 3.0 GWh, respectively. On 13 March 2025, Småkraft acquired Lysåelva Kraftverk AS, which owns a newbuilt power plant of 7.4 GWh in NO4.

Bergen, Norway, 25 March 2025
The Board of Directors, Småkraft AS

Chairperson of the Board
Annette Malm Justad

Member of the Board

Claudia Ahnert

Member of the Board
Oldrik Verloop

Member of the Board
Felix Renneke

CEO
Terje Vedeler

## Annual accounts and notes Småkraft Group

### Consolidated income statement and
consolidated statement of other comprehensive income

Amounts in EUR thousand | Note | 2024 | 2023
--- | --- | --- | ---
Power revenue | 8 | 54,433 | 67,758
Other income | 8 | 259 | 1,481
Fair value change on energy derivatives | 13 | 18,185 | 55,857
Unrealized value change on energy derivatives |  | 25,437 | 73,133
Realized value change on energy derivatives |  | -7,252 | -17,277
Share of the profit (loss) in equity accounted investments | 17 | 500 | 118
Payroll and related costs | 9 | -4,489 | -4,653
Depreciation and impairment of fixed assets and intangible assets | 14, 15, 16 | -22,198 | -20,010
Other operating expenses | 10 | -25,333 | -25,032
Operating profit/(loss) |  | 21,358 | 75,519
Financial income | 11 | 2,046 | 1,982
Net foreign exchange gain (loss) |  | -19,643 | -23,036
Fair value changes on interest rate and currency derivatives | 7, 13 | -3,757 | -6,265
Financial expenses | 11 | -20,883 | -13,325
Net financial items |  | -42,237 | -40,643
Profit/(loss) before tax |  | -20,879 | 34,876
Tax income (expense) | 12 | 3,621 | -7,633
Profit (loss) |  | -17,258 | 27,243
Profit/(loss) is attributable to:
Equity holders of the parent company |  | -17,041 | 27,411
Non-controlling interests |  | -216 | -167
Other comprehensive income:
Items that may be reclassified to profit or loss
Currency translation differences on foreign operations |  | 440 | 1,692
Items that will not be reclassificed to profit or loss
Currency translation differences |  | -18,263 | -21,664
Total comprehensive income for the year |  | -35,081 | 7,271
Total comprehensive income is attributable to:
Equity holders of the parent company |  | -34,285 | 8,274
Non-controlling interests |  | -796 | -1,003

### Consolidated statement of financial position

Non-current assets |  |  |
Amounts in EUR thousand | Note | 31.12.2024 | 31.12.2023
--- | --- | --- | ---
Intangible assets | 14 | 222,887 | 231,574
Property, plant and equipment | 16 | 552,353 | 552,395
Deferred tax assets | 12 | 26,359 | 16,913
Investments | 17 | 3,531 | 2,732
Derivatives | 13 | 3,309 | 714
Other long-term receivables | 18 | 10,182 | 7,691
Total non-current assets |  | 818,621 | 812,018
Current assets |  |  |
Inventories |  | 770 | 1,489
Trade receivables | 7 | 3,395 | 4,276
Other receivables | 7 | 11,589 | 12,285
Derivatives | 13 | 1,367 | 4,140
Cash and Cash equivalents | 19 | 28,310 | 40,120
Total current assets |  | 45,429 | 62,310
Total assets |  | 864,051 | 874,328

Shareholders equity |  |  |
Amounts in EUR thousand | Note | 31.12.2024 | 31.12.2023
--- | --- | --- | ---
Share capital | 20 | 22,898 | 23,046
Paid-in capital | 20 | 399,196 | 402,500
Other equity |  | -65,843 | -51,912
Total Shareholders equity |  | 356,250 | 373,633
Non-controlling interests |  | 12,136 | 12,057
Total equity |  | 368,386 | 385,690
Non-current liabilities |  |  |
Deferred tax liability | 12 | 6,463 | 0
Borrowings | 21 | 454,812 | 276,512
Derivatives | 13 | 30 | 8,524
Other non-current liabilities | 7 | 276 | 467
Total non-current liabilities |  | 461,582 | 285,504
Current liabilities |  |  |
Accounts payable | 7 | 3,946 | 7,573
Taxes payable | 12 | 306 | 1,257
Public duties payable | 7 | 1,498 | 0
Derivatives | 13 | 6,126 | 19,944
Borrowings | 21 | 14,057 | 164,312
Other current liabilities | 7 | 8,151 | 10,049
Total current liabilities |  | 34,084 | 203,134
Total liabilities |  | 495,665 | 488,638
Total equity and liabilities |  | 864,051 | 874,328

Bergen, Norway, 25 March 2025
The Board of Directors, Småkraft AS

Member of the Board
Claudia Ahnert

Chairperson of the Board
Annette Malm Justad

Member of the Board
Oldrik Verloop

Member of the Board
Felix Renneke

CEO
Terje Vedeler

### Consolidated statement of changes in equity

Amounts in EUR thousand | Note | Share capital | Paid-in capital | Foreign currency translation* | Retained earnings | Total shareholders equity | Non-controlling interests | Total equity
--- | --- | --- | --- | --- | --- | --- | --- | ---
Equity at 01.01.2023 |  | 22,861 | 401,420 | -19,080 | -67,268 | 337,933 | 14,131 | 352,064
Net profit |  | - | - | - | 27,411 | 27,411 | -167 | 27,243
Currency translation differences |  | -1,483 | -25,382 | -19,137 | 26,865 | -19,137 | -836 | -19,973
Total comprehensive income for the period |  | -1,483 | -25,382 | -19,137 | 54,276 | 8,274 | -1,003 | 7,271
Capital increase | 20 | 1,669 | 63,654 | - | - | 65,323 | 2,381 | 67,704
Purchase of shares from non-controlling interest | 5 | - | - | - | -704 | -704 | -2,517 | -3,222
Dividend |  | - | -37,192 | - | - | -37,192 | -935 | -38,127
Equity at 31.12.2023 |  | 23,046 | 402,500 | -38,217 | -13,697 | 373,633 | 12,057 | 385,690
Net profit |  | - | - | - | -17,041 | -17,041 | -216 | -17,258
Currency translation differences |  | -1,102 | -19,255 | -17,266 | 20,378 | -17,243 | -580 | -17,823
Total comprehensive income for the period |  | -1,102 | -19,255 | -17,266 | 3,337 | -34,285 | -796 | -35,081
Capital increase current period | 20 | 953 | 24,655 | - | - | 25,608 | - | 25,608
Capital increase current period not registered |  | - | 6,295 | - | - | 6,295 | - | 6,295
Changes in non-controlling interest | 5 | - | - | - | - | - | 1,126 | 1,126
Dividend |  | - | -15,000 | - | - | -15,000 | -251 | -15,251
Equity at 31.12.2024 |  | 22,898 | 399,196 | -55,483 | -10,360 | 356,250 | 12,136 | 368,386
*Currency translation differences that can be reclassified through other comprehensive income were EUR 1417 thousand per 31.12.2024 and EUR 977 thousand pr 31.12.2023

### Consolidated statement of cash flow

Cash flows from (used in) operating activities | Note | 2024 | 2023*
--- | --- | --- | ---
Cash flow from operations
Profit (-loss) before income tax |  | -20,879 | 34,876
Taxes paid for the period |  | -1,215 | -5,079
Depreciation, amortization, impairment | 14. 16 | 22,198 | 20,010
Net financial items |  | 20,680 | 11,821
Cash settlement derivatives | 13 | -7,252 | -17,277
Change in unrealized currency gains/losses |  | 18,904 | 25,115
Change in unrealized derivatives | 13 | -14,428 | -49,592
Change in working capital |  | -4,927 | -42,143
Net cash flow from operations |  | 13,081 | -22,269
Cash flow from investment activities
Outflows due to purchases of fixed assets and intangibles | 14. 16 | -39,603 | -35,117
Outflows due to investments in subsidiaries | 5 | -6,667 | -29,082
Outflows due to investments in other financial assets |  | -508 | -42
Inflows from sale of other financial assets |  | 0 | 1,452
Dividend received from equity accounted investments |  | 129 | 876
Net cash flow from investment activities |  | -46,650 | -61,914
Cash flow from financing activities
Capital increases | 20 | 31,903 | 67,704
Dividend payments |  | -15,251 | -38,127
Outflows from transactions with non-controlling interest |  | 1,126 | -3,222
Interest paid* |  | -19,042 | -11,966
Inflows from loan raising | 21 | 61,273 | 123,474
Outflows from loan payments | 21 | -36,391 | -120,504
Net cash flow from financing activities |  | 23,617 | 17,360
Currency translation differences |  | -1,858 | -8,311
Net change in bank deposits and cash |  | -9,952 | -66,822
Bank deposits and cash at beginning of period |  | 40,120 | 115,253
Bank deposits and cash at end of period |  | 28,310 | 40,120
* Presentation of interest payments is changes from operating to financing cash flows in the 2024 financial statements.

### Notes

#### Note 1 General information

The Småkraft Group comprises of Småkraft AS and the consolidated subsidiaries (Småkraft Group or the Group). Småkraft’s head office is located in Bergen, with local offices in Harstad, Stjørdal, Dale in Sunnfjord, Førde and Sandnes in Norway and Gävle in Sweden. The Group employs 33 people. Småkraft is a supplier of renewable energy based on small scale hydro power plants situated in Norway and Sweden.

The group consists of Småkraft AS and 24 fully or partly owned subsidiaries at year end 2024.

Småkraft’s consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU and further requirements in Norwegian Accounting Law (Regnskapsloven).

The statement of comprehensive income, statement of financial position, statement of equity, statement of cash flow and notes provide comparable information in respect of the previous period.

The financial statements have been prepared on a historical cost basis except for financial derivatives which are measured at fair value. The preparation of financial statements in conformity with IFRS requires the use of certain accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.

Presentation and classification of items in the financial statements is consistent for the periods presented. Application of the accounting policies by the subsidiaries has been changed where necessary, to ensure consistency with the Group’s accounting policies.

The functional currency of Småkraft AS is the Norwegian krone (NOK). The Group’s accounts are presented in EUR. Småkraft AS presents the financial statement in EUR, as most of the lenders and the owners are EUR-based.

#### Note 2 General accounting policies

###### Basis of Consolidation

The consolidated financial statements of the Group for the year ended 31 December 2024 comply with IFRS as endorsed by the European Union (EU).

The consolidated financial statements are comprised of the financial statements of the parent company Småkraft AS and its subsidiaries. Subsidiaries are all entities (including structured entities) over which Småkraft Group has control.

Småkraft Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. Subsidiaries are no longer consolidated from the date when control ceases.

Profits and losses resulting from intercompany transactions have been eliminated, as well as unrealized gains on transactions between group companies. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the transferred asset.

###### Acquisition of controlling interest in other entities – Business combinations or asset acquisition

When the Group acquired a controlling interest in another entity the transaction is accounted for either as a business combination or an asset acquisition depending on an assessment of the entity acquired. If the entity acquired includes the elements (input, process, and output) included in the definition of a business the transaction is accounted for a business combination, otherwise the transaction is accounted for as an acquisition of asset. In most transactions the group acquire a powerplant (with land rights) or several power plants, that do not represent a business under the definition in IFRS 3.

###### Acquisition of controlling interest in other entities – Business combinations

The acquisition method of accounting is used to account for all business combinations. The consideration is measured at the fair value of any transferred assets, liabilities or issued equity instruments. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition- by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred. If the consideration transferred (including any non-controlling interests and the fair value of previous assets) exceeds the fair value of identifiable net assets acquired, this is recognised as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase gain.

###### Acquisition of controlling interest in other entities – Asset acquisition

When the acquisition of a controlling interest in an entity does not constitute a business, the transaction is accounted for as an asset acquisition. In these transactions the individual identifiable asset acquired, and liabilities assumed are recognised. The cost of the group of assets and liabilities (purchase price of equity instruments and transaction costs) are allocated to the individual identifiable assets and liabilities based on their relative fair values at the date of purchase. Such a transaction or event does not give rise to goodwill. Apart from financial instruments the assets acquired in these transactions is the power plant and the intangible asset relating to the water rights.

###### Foreign currency translation

Functional and presentation currency

The financial statements are presented in EUR. The functional currency of the entities in the group is NOK or SEK. The subsidiaries in the group are consolidated into the functional currency of the parent (NOK) and then translated to the presentation currency, EUR. The currency differences arising in the translation to the presentation currency are presented in Other Comprehensive Incomes. Also, in the statement of equity the translation difference is included in retained earnings. All amounts are rounded to the nearest EUR thousand.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rate at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are generally recognised in profit or loss. Småkraft uses currency exchange rates from Norges Bank.

###### Sale of energy

The revenues from sale of energy bear the characteristic of delivering power at a certain price. The performance obligation is to deliver a series of distinct goods (power) and the transaction price is the consideration expected to receive, at either spot price, regulated price or contract price. The performance obligation is satisfied over time which entails that revenue should be recognised for each unit delivered at the transaction price. Småkraft applies a practical expedient under IFRS 15 whereby the revenue from power for most of the contracts is recognised at the amount of which the entity has a right to invoice. The right to invoice power arises when power is produced and delivered and the right to invoice the consideration will normally correspond directly with the value to the customer. In arrangements where Småkraft sells power on an exchange (e.g., Nord Pool), the exchange is determined to be the customer.

###### Segments

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. Furthermore, the entity’s component’s operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance, and thus separate financial information is available. The company has determined that the board of directors is collectively the chief operating decision maker.

The Group has only one segment: power supply. Småkraft produces renewable energy and sells electricity, el-certs and guarantees of origin on the Nordic power market.

###### Property, plant and equipment

Property, plant and equipment is measured at historical cost less accumulated depreciation. Land is not depreciated. Historical cost includes expenditures that are directly attributable to the acquisition of the item. Borrowing costs incurred during the manufacturing of tangible non-current assets are capitalised until the asset is ready for its intended use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. Repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate costs over their estimated useful lives. The assets’ useful lives are reviewed annually and adjusted if appropriate.

Gains and losses on disposals are determined by comparing actual proceeds with the carrying amount. Gains and losses on disposal are included in profit or loss.

###### Intangible assets

Intangible assets consist of waterfall rights acquired separately and rights to land acquired as part of the acquisition of a power plant. In general, the waterfall right is recognised as a separate intangible asset. The cost of the acquired water right lease is at initial recognition measured as a residual, based on the purchase price on acquisition of a power plant owning company. Småkraft distinguishes waterfall rights in time-limited and unlimited groups regardless of how they were acquired. Reference is made to note 14.

Intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses. Costs relating to intangible assets, are recognised in the statement of financial position when it is probable that the asset will generate future economic benefits and the costs can be measured reliably.

Intangible assets with a definite useful life, such as water rights owned are amortised over the useful life. Intangible assets with an indefinite useful life are not amortised but are instead tested annually for impairment.

###### Leases

The Group’s main lease type of agreements are related to water rights. The rights are considered intangible assets. Småkraft has elected to not recognise these types of agreements under IFRS 16 leases. The accounting treatment of the different water right lease agreements are described below:

###### Water right lease agreements

Småkraft enters into water right lease agreements with landowners, which entitles the company to utilize the water in the rivers. The agreement typically has a period varying from 40 to 75 years, starting when the power plant is put into commercial operation.

When Småkraft has a commitment to pay rent to the landowners, we account for this as a regular cost as the commitment arises. Such commitment arises, when:

1. Gross agreement/revenue-based agreement: Småkraft pays landowner a percentage of the annual power plant revenue. Upon expiration of the agreement the landowners have the right to purchase the power plant with all rights and technical installations at a price based on certain specific conditions.
   Småkraft accounts for this land lease when the relevant power plant generates revenue, upon which this land lease bases.
2. Fixed amount agreement: Småkraft pays landowner a fixed annual amount. Upon expiration of the agreement the landowner has the right to purchase the powerplant with all rights and technical installations at a price based on certain specific conditions.
   Småkraft accounts for this land lease monthly based upon the agreed yearly payment.
3. Profit share agreement: Småkraft shares the yearly powerplant- profit with the landowner. Upon expiration of the agreement the landowners have the right to purchase the power plant with all rights and technical installations based on certain specific conditions.
   Småkraft accounts for this land lease type by calculating the actual profit for each individual power plant on a monthly basis. Småkraft then calculates the exact share of the profit, that the landowners have the right to receive. If Småkraft is in a position, where land lease should be paid to landowners, Småkraft accounts for the estimated payment as a cost.
   In the case that Småkraft has a profit share lease agreement, where there (still) is an accumulated loss on the powerplant, Småkraft has the right to offset all accumulated losses before paying out land lease rent to the landowners. This will represent a future benefit for the company, that Småkraft does not recognise as an asset. This asset will be off-balance. Any positive or negative changes in these off-balance items, will not be recognised in Småkraft’s books. In some instances, Småkraft may pay out loans or minimum payments to landowners. These loans are interest bearing loans and will be recognised as normal loans in the Group’s Financial Statements.

###### Financial instruments

Financial instruments are recognised in the financial statements when the Group becomes party to contractual conditions relating to the financial instrument. Financial assets and financial liabilities are classified based on the type and purpose for holding the instruments at fair value, amortised cost or as a designated hedge accounting instrument (e.g. derivatives used for hedging financial risks).

###### Financial assets

The group classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value, and

• those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will be recorded in profit or loss. Financial assets recognised at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value of the financial instruments at fair value through profit or loss, including interest and dividends, are recognised in the income statement. Derivatives are always measured at fair value through profit or loss.

Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss.

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

###### Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

###### Accounts receivables and accrued revenue

Accounts receivables are measured at initial recognition at fair value. Accounts receivables are held with the objective to collect the contractual cash flows and therefore are subsequently measured at amortised cost using the effective interest method. For the purposes of impairment, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from the date of initial recognition of the receivables.

###### Financial liabilities

The Group classifies all financial liabilities at amortised cost, except for derivatives which are at fair value and financial guarantees (see below).

###### Accounts payables and other financial payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of period which are unpaid. They are recognised at fair value. Småkraft does not subsequently measure at amortised cost using the effective interest method, as the difference is insignificant. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.

###### Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

###### Taxes

Group companies that are engaged in energy generation in Norway are subject to the special rules for taxation of energy companies. The Group’s tax expense therefore includes, in addition to ordinary income tax, natural resource tax and resource rent tax for those plants exceeding 10,000 KVA, currently only the Holmen power plant.

Income taxes

Income tax is calculated in accordance with ordinary tax rules and by applying the adopted tax rate. The tax expense in the statement of comprehensive income comprises taxes payable and changes in deferred tax liabilities and deferred tax assets. Taxes payables are calculated on the basis of the taxable income for the year.

Deferred tax liabilities and deferred tax assets are calculated on the basis of temporary differences between the accounting and tax values and the tax effect of losses carried forward. The initial recognition exemption for the tax effect on temporary differences relating to purchase of power plants applies if the transaction is treated as an asset acquisition (not a business combination).

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Tax related to items recognised in other comprehensive income is also recognised in other comprehensive income, while tax related to equity transactions is recognised in equity.

Natural resource tax

Natural resource tax is a profit-independent tax that is calculated on the basis of the individual power plant’s average output over the past seven years. Natural resources tax consists of NOK 0.011 per kilowatt hour (KWh) to the municipality and NOK 0.002 per kwh to the county. Income tax can be offset against the natural resource tax paid. Any natural resource tax that exceeds income tax can be carried forward with interest to subsequent years and is recognised as prepaid tax.

Resource rent tax

Resource rent tax is a profit-dependent tax levied on the net resource rent revenue generated by each power plant. Resource rent tax is calculated with 57.7% of the resource rent income for each power plant. Negative resource rent tax is carried forward against future positive resource rent tax interest. Negative resource rent tax is included in the deferred tax asset, together with temporary differences regarding the power plant. Deferred tax assets related to negative resource rent tax and temporary tax differences are capitalised if it is probable that the power plant has resource rent income within a time limit of 15 years and is settled against future payable resource rent tax. Deferred tax liabilities/ deferred tax assets related to resource rent tax is calculated with a tax rate of 57.7%.

###### Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

###### Contributed equity

Ordinary shares are classified as equity. Issuance of new shares are recognised when paid, based upon the decision by the General Meeting. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

###### Adoption of new and revised standards

The following standards and amendments were mandatory application for the first time for the reporting period commencing 01.01.2024:

- Supplier Finance Arrangements (Amendments to IAS 7 & IFRS 7)
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
- Non-current Liabilities with Covenants (Amendments to IAS 1)

None of the amendments listed above have had any significant impact on the financial statements.

###### Standards and amendments issued but not yet effective

Certain amendments to accounting standards have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the group. These amendments are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

#### Note 3 Key accounting estimates and judgements

###### Introduction

The use of reasonable estimates and judgements is a critical element in preparing the financial statements. Due to the level of uncertainties inherent in Småkraft’s business activities, management must make certain estimates and judgements that effect the application of accounting policies, results of operations, cash flows and financial position as reported in the financial statements.

###### Areas of significant estimates

Impairment testing of goodwill, property plant and equipment (PPE) and intangible assets

In performing the impairment assessment of the carrying amount of PPE and intangible assets, as disclosed in Note 15, the recoverable amounts of the cash generating units (“CGUs”), are determined based on fair value less cost of disposal. Significant judgements are used to estimate the long-term price forecast for power, production volumes and discount rates applied in computing the recoverable amounts of different CGUs. In making these estimates, management has relied on market development and estimates from external consultancies as disclosed in note 15.

###### Fair value measurement of energy derivatives

Significant estimates are applied in the valuation of the Group’s long term power purchase and power sales contracts. The fair value estimate is based on the amounts for which the assets or liabilities could be exchanged at the relevant transaction date on the reporting period end. To the extent possible, the assumptions and inputs used, take into account externally verifiable inputs. However, such information is by nature subject to uncertainty, particularly where comparable market-based transactions do often not exist. In such cases Småkraft’s management is required to make market-based assumptions, see note 13.

#### Note 4 Subsequent events

After year end, Småkraft has increased the portfolio of powerplants. On 31 January 2025 Småkraft closed the acquisition of 100% of the shares in Nye Grøvla Kraft AS, which has a powerplant in operation with a capacity of 7.3 GWh to our portfolio in Norway. 30 January Småkraft AB acquired Våmån Kraft AB with one additional power plant of 4 GWh. On 13 March 2025, Småkraft acquired Lysåelva Kraftverk AS, which has a newbuilt power plant of 7.4 GWh.

#### Note 5 Subsidiaries

Småkraft purchased 4 subsidiaries in 2024 (15 in 2023):

Group companies | Date of acquisition/ Incorporation | Registered office | Ownership share | Voting share
--- | --- | --- | --- | ---
Småkraft AS |  | Bergen |  |
Reinli Kraft AS | 2005 | Bergen | 51% | 51%
Muoidejohka Kraft AS | 2010 | Bergen | 60% | 60%
Jorda Kraft AS | 2012 | Bergen | 51% | 51%
Kvemma Kraft AS | 2013 | Lærdal | 66% | 66%
Holmen Kraft AS | 2016 | Bergen | 100% | 100%
Follsjå Kraft AS | 2016 | Bergen | 82% | 82%
Sigdestad Kraftverk AS | 2018 | Bergen | 52% | 52%
Holsen Kraft Norddøla AS | 2020 | Bergen | 100% | 100%
Ytre Kandal Kraft AS | 2020 | Sandane | 61% | 61%
Fossåa 1 K AS | 2020 | Sør- Fron | 66% | 66%
Tokheim Kraft AS | 2020 | Bergen | 100% | 100%
Småkraft Green Bond 2 AS | 2020 | Bergen | 100% | 100%
Småkraft USPP 1 AS | 2022 | Bergen | 100% | 100%
Chr Salvesen & Chr Thams’s Communications AS | 2022 | Bergen | 100% | 100%
Svorka Småkraft AS | 2023 | Bergen | 65% | 65%
Småkraft Vekst 2025 AS | 2023 | Bergen | 100% | 100%
Småkraft Vekst 2026 AS | 2023 | Bergen | 100% | 100%
Glutra Kraft AS | 2024 | Bergen | 100% | 100%
Teitafossen Kraft AS | 2024 | Bergen | 100% | 100%
Småkraft Green Bond 1 AS | 2018 | Bergen | 100% | 100%
Saksenvik Kraft AS | 2016 | Bergen | 96% | 96%
Midt Kraft AS | 2023 | Bergen | 100% | 100%
Småkraft AB | 2022 | Uppsala | 100% | 100%
Småkraft Operations AB | 2022 | Uppsala | 100% | 100%

Note that 15 subsidiaries were absorbed through group internal mergers during 2024.

###### Financial initial effect from purchased subsidiaries

Based on the assessment of management none of the subsidiaries (power plants) acquired during 2024 and 2023 constitutes a business as defined in IFRS 3, thus all purchases are treated as acquisition of asset.

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Acquisition cost | 6,667 | 29,082
Deferred tax asset | 0 | 160
Intangible Assets | 6,678 | 28,383
Property, plants and equipment | 4,449 | 26,479
Short term receivables | 58 | 459
Non-controlling interests | 0 | -142
Interest bearing liabilities, non-current | -4,116 | -6,185
Other interest-free liability | -402 | -20,072
Total | 6,667 | 29,082

#### Note 6 Management of capital structure

The main aims of the Group’s management of its capital is to maintain a reasonable balance between the company’s debt and total assets. The Group has a long-term investment horizon, with contractual arrangements and investments that will last for decades. The reasonable balance between debt and total assets is thus set based upon the expectations towards short-term and long-term price expectations.

Overview of capital included in management of capital structure:

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Total non-current assets | 818,621 | 812,018
Interest-bearing liabilities, non-current | 454,812 | 276,512
Interest-bearing liabilities, current | 14,057 | 164,312
Cash and cash equivalents, excluding restricted cash | 28,310 | 40,120
Net interest- bearing liabilities (NIB) | 440,559 | 400,704
NIB/ Total non-current assets | 54% | 49%

#### Note 7 Financial instruments – Risk Management

The Group is exposed through its operations to the following financial risks:

- Credit risk
- Interest rate risk
- Foreign exchange risk
- Other market price risk
- Liquidity risk

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

(i)Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

- Trade receivables
- Cash and cash equivalents
- Accounts payable
- Bank overdrafts
- Floating-rate bank loans
- Fixed rate loans
- Interest rate swaps
- Forward currency contracts

(ii) Financial instruments by category

31.12.2024 |  |  |  |  |
Amounts in EUR thousand | Financial assets at fair value | Financial assets at amortized cost | Financial liabilities at fair value | Financial liabilities at amortized cost | Total
--- | --- | --- | --- | --- | ---
Assets
Investments |  | - |  |  | -
Long-term receivables |  | 10,182 |  |  | 10,182
Trade receivables |  | 3,395 |  |  | 3,395
Other receivables |  | 10,767 |  |  | 10,767
Derivatives non-current | 3,309 |  |  |  | 3,309
Derivatives current | 1,367 |  |  |  | 1,367
Cash and cash equivalents |  | 28,310 |  |  | 28,310
Liabilites
Borrowings non-current |  |  |  | -454,812 | -454,812
Borrowings |  |  |  | -14,057 | -14,057
Accounts payable |  |  |  | -3,946 | -3,946
Other non-current liabilities |  |  |  | -276 | -276
Other current liabilities |  |  |  | -8,151 | -8,151
Derivatives non-current |  |  | -30 |  | -30
Derivatives current |  |  | -6,126 |  | -6,126
Net financial assets and liabilities | 4,676 | 52,654 | -6,156 | -481,242 | -430,069

31.12.2023 |  |  |  |  |
Amounts in EUR thousand | Financial assets at fair value | Financial assets at amortized cost | Financial liabilities at fair value | Financial liabilities at amortized cost | Total
--- | --- | --- | --- | --- | ---
Assets
Long-term receivables |  | 7,691 |  |  | 7,691
Trade receivables |  | 4,276 |  |  | 4,276
Other receivables |  | 12,285 |  |  | 12,285
Derivatives non-current | 714 |  |  |  | 714
Derivatives current | 4,140 |  |  |  | 4,140
Cash and cash equivalents |  | 40,120 |  |  | 40,120
Liabilites
Borrowings non-current |  |  |  | -276,512 | -276,512
Borrowings |  |  |  | -164,312 | -164,312
Accounts payable |  |  |  | -7,573 | -7,573
Other non-current liabilities |  |  |  | -467 | -467
Other current liabilities |  |  |  | -10,049 | -10,049
Derivatives non-current |  |  | -8,524 |  | -8,524
Derivatives current |  |  | -19,944 |  | -19,944
Net financial assets and liabilities | 4,854 | 64,372 | -28,468 | -458,913 | -418,155
Småkraft has hedged a portion of the expected power sale. Total volume hedged for the future is shown in the table below

(iii) Financial instruments not measured at fair value

Financial instruments not measured at fair value includes cash and cash equivalents, trade and other receivables, trade and other payables, and loans and borrowings. The carrying value approximates their fair value.

(iv) Financial instruments measured at fair value

There were no transfers between levels during the period.

All the derivatives are valued at fair value at level 2 in accordance with the fair value hierarchy. For additional information see note 13.

###### Risk and risk management of financial instruments

Småkraft is engaged in activities that entail risk in many areas and has a unified approach to the Group’s market risks. The Group’s risk management policy is based upon assuming the right risk based on the Group’s ability and willingness to take risks, expertise, financial strength and development plans. The purpose of risk management is to identify threats and opportunities for the Group, and to manage the overall risk level to provide reasonable assurance that the Group’s objectives will be met. In Småkraft, market risk will primarily relate to prices of energy, interest rates and foreign currency. The following section contains a more detailed description of the various types of market risks, and how these are managed.

###### Description of market risk related to prices on energy and commodities

Småkraft is exposed to significant market risk in relation to the generation and trading of power. Revenues from power generation are exposed to volume and power price risk. Småkraft manages market risk in the energy markets by trading physical and financial instruments in the Nordic Market.

Risk management in energy trading in Småkraft focuses on residual market exposure after considering land lease contracts and minority interests. In general, Småkraft enters standard fixed price contracts where Småkraft agrees to sell a certain production volume at an agreed price in the future. Around 1/4 of the expected annual production capacity for 2024 have such contracts to reduce the residual risk after land lease and minority interests. Småkraft has set risk limits within which trading activities are allowed. All energy trading contracts are financial contracts.

Småkraft has hedged a portion of the expected power sale. Total volume hedged for the future is shown in the table below:

Total hedged volume |  |  |
Amounts in GWh | Year 1 | Year 2 | Year 3
--- | --- | --- | ---
Pr. 31.12.2024 | 385 | 193 | 0
Pr. 31.12.2023 | 441 | 385 | 193

The energy derivatives are hedged against Nordic system prices. Småkraft also has EPADs for selected price areas.

Both realized cash effects and unrealized non-cash effects from trading are presented in the line item “Fair value change on energy derivatives” in the consolidated statement of income.

###### Description of foreign exchange risk

Småkraft incurs currency risks in the form of transaction risk, mainly in connection with energy sales revenue and investments. Balance sheet risk is related to debt in EUR.

Småkraft settlement currency at the Nordic power exchange Nord Pool is EUR and NOK, and all power contracts traded in the Nordic power exchange Nasdaq are denominated in EUR. In addition, most of Småkraft’s power purchase agreements in Norway and all power purchase and sales abroad are denominated in EUR. The objective of Småkraft’s hedging is to secure the EUR value of future cash flows exposed to changes in foreign currency rates. Economic hedging is partly achieved by using debt in EUR currencies as hedging instruments. For these hedging relationships hedge accounting is not applied.

As of 31 December, the Group’s net exposure to foreign exchange risk was as follows:

31.12.2024 | Functional currency of individual entity
--- | ---
Amounts in EUR thousand | NOK | SEK | Total
Net foreign currency financial assets/(Liabilites)
Currency
NOK |  |  | -
EURO | -410,238 |  | -410,238
SEK | 151 |  | 151
Total net exposure | -410,087 | - | -410,087
31.12.2023 | Functional currency of individual entity
Amounts in EUR thousand | NOK | SEK | Total
Net foreign currency financial assets/(Liabilites)
Currency
NOK |  |  | -
EURO | -386,354 |  | -386,354
SEK | -612 |  | -612
Total net exposure | -386,966 | - | -386,966

###### Description of interest rate risk

Småkraft’s interest rate risk is defined as gross interest exposure because of outstanding loans with floating interest rates as well as undrawn signed financing. As soon as a term sheet is signed, the interest rate exposure from this financing must be included in the interest rate risk calculation.

The ratio is defined as the expected outstanding loan balance with a fixed interest rate above the total expected outstanding loan balance. Småkraft must ensure that it stays within the following security level at all times:

Hedge ratio |  |  |  |
| Year 1 | Year 2 | Year 3 | Year 4
Hedge ratio | 56% | 57% | 54% | 58%

###### Interest rate exposure for power plants under construction

In the same way that Småkraft does not hedge power prices for signed production during construction, the expected interest rate exposure for potential future debt linked to development is also not to be included in the interest rate risk calculations. This interest rate risk shall not be hedged.

###### Approved instruments

Småkraft can use interest rate swaps, fixed interest rate coupons or interest rate options. Options must only be used for hedging and stop-loss levels must be defined.

As of 31 December 2024, Småkraft has the following interest rate derivatives.

Interest rate derivatives |  |  |  |  |  |
Maturity date | Currency | Amount | Fixed rate | MTM | Secured part | EUR equivalent
--- | --- | --- | --- | --- | --- | ---
24.06.2027 | EUR thousand | 79,000 | 4.20% | 800,827 | 50% | 79,000
15.07.2026 | EUR thousand | 8,938 | -0.27% | 315,060 | 50% | 8,938
02.01.2025 | NOK thousand | 55,160 | 2.33% | 585 | 100% | 4,678
18.08.2025 | NOK thousand | 14,831 | 2.01% | 27,704 | 50% | 1,258

The interest rate derivatives are linked to the bank loans. The future development in interest rates will affect the value of the interest rate derivatives.

###### Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected, after the impact of hedge accounting. With all other variables held constant, the Group’s profit and equity before tax is affected through the impact on floating rate borrowings, as follows:

| Increase/ (decrease) in basis points | Effect on profit before tax | Effect on equity
31.12.2024 | 100 | -4,689 | -3,657
31.12.2023 | 100 | -4,408 | -3,438

###### Covenants

Småkraft group has various loan agreements with financial covenants requirements.

Annual Debt Service Cover Ratio – ADSCR
Means the ratio of EBITDA during a period to the total amount of debt service paid in respect of that period.

For reporting of 2025 figures, the definition is temporarily amended to the following; the ratio of EBITDA and cash (period end) divided by debt service during the period. *)

Interest coverage ratio – ICR
Means, for any period, the ratio of Cash Flow Available for Debt Service plus amounts invested pursuant to any Equity Cure to Interest Payments. All within a defined period.

Equity ratio
Means the ratio of book equity to the total assets.

Minimum liquidity
Småkraft shall maintain a minimum Liquidity equal to the estimated sum of the interest payments (of the Group) falling due over the next six months, but however limited to a maximum of EUR 5,000,000

Covenants |  |  |  |  |  |
Amounts in EUR thousand
Facility | Outstanding loan | Covenant | Minimum requirement | Status | Measured entity | Reporting frequency
--- | --- | --- | --- | --- | --- | ---
Bank facility | 158,000 | ADSCR | 1.15 | Exempted reporting 31.12.2024 | Group | Semi Annual
|  | Equity ratio | 30% | Satisfied | Group | Semi Annual
Green Bonds | 124,500 | Equity ratio | 30% | Satisfied | Group | Semi Annual
|  | Minimum liquidity | EUR 5 million | Satisfied | Group | Semi Annual
US Private placements | 120,000 | ICR | 1.05 | Satisfied | Group company | Semi Annual

*) If the amended definition of ADSCR had been applicable as per end 2024 the minimum requirement would have been satisfied.

###### Credit risk

Credit risk is the risk that Småkraft incurs losses due to the failure of counterparties to honour their financial obligations. Småkraft is facing credit risk when entering transactions with financial institutions. Credit risk against financial institutions arises from cash or current account, deposit, investment of interest-bearing securities, derivative transactions and incoming guarantees. Småkraft also assumes credit risk when providing loans to associates and joint ventures. In addition, Småkraft assumes credit risk in connection with physical sales contracts. The total risk of counterparties not being able to meet their obligations is low. Historically, Småkraft’s credit losses have been limited.

All of Småkraft’s main counterparties with regards to revenue settlement and hedging activities are rated as Investment Grade by well-known rating agencies within the 12 months.

###### Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Groups approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Groups reputation. The table below shows the maturity structure of the Group’s financial liabilities.

31.12.2024 |  |  |  |  |  |
|  | Cash flows including interest |
Amounts in EUR thousand | Carrying amount | 1 year | 2 years | 3 years | 4 years | >5 years
--- | --- | --- | --- | --- | --- | ---
Borrowings | 468,869 | 40,765 | 102,580 | 169,412 | 88,189 | 133,490
Accounts payable | 3,946 | 3,946 |  |  |  |
Derivatives | 6,156 | 6,126 |  |  |  |
Other current liabilities | 9,649 | 9,649 |  |  |  |
Total | 488,621 | 60,486 | 102,580 | 169,412 | 88,189 | 133,490
31.12.2023 |  |  |  |  |  |
|  | Cash flows including interest |
Amounts in EUR thousand | Carrying amount | 1 year | 2 years | 3 years | 4 years | >5 years
Borrowings | 440,824 | 177,565 | 16,554 | 95,315 | 10,418 | 215,515
Accounts payable | 7,573 | 7,573 |  |  |  |
Derivatives | 28,468 | 19,944 | 8,094 | 430 |  |
Other current liabilities | 10,049 | 10,049 |  |  |  |
Total | 486,914 | 215,130 | 24,648 | 95,745 | 10,418 | 215,515

#### Note 8 Power revenues and other income

###### Sale of electric energy
The revenues originate from the generation of hydropower.

Guarantees of Origin and EL certificate schemes are market-based support schemes. In this system, producers of renewable electricity receive one certificate per MWh of electricity they produce for a period of up to 15 years.

###### Disaggregation of revenues by price area

Amounts in EUR thousand |  | 2024 | 2023
Price area NO1 | Norway | 2,962 | 3,074
Price area NO2 | Norway | 14,651 | 21,284
Price area NO3 | Norway | 10,641 | 10,072
Price area NO4 | Norway | 4,907 | 3,711
Price area NO5 | Norway | 14,881 | 18,724
Price area SE2 | Sweden | 770 | 1,407
Price area SE3 | Sweden | 2,829 | 4,223
Other green revenue |  | 2,790 | 5,262
Power revenues |  | 54,433 | 67,758

*Included in other green revenue is income from EL-certificates

###### Other income

###### Guarantees of origin

Introduced with the EU’s first Renewable Energy Directive (Directive 2001/77/EC) in 2001, Guarantees of Origin are defined as a labelling scheme for electricity to show the electricity customer that a quantity of power has been produced from a specified energy source. All power producers can receive guarantees of origin corresponding to their power production. A guarantee of origin corresponds to 1 MWh of electricity produced.

Guarantees of Origin not yet delivered to customers are presented as inventory. Changes in inventory related to origin guarantees is presented below in the note.

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Guarantees of origin – change in inventory | -599 | 1,265
Other operating income | 858 | 217
Other operating income | 259 | 1,481

#### Note 9 Payroll and related costs

###### Payroll costs

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Wages and salaries | 3,428 | 3,397
Payroll tax | 639 | 695
Pension costs | 367 | 432
Other benefits | 54 | 129
Sum | 4,489 | 4,653
Number of full-time employees | 33 | 32

###### Compensation to the Group Leadership Team

Amounts in EUR thousand |  |  |  |  |  |
Executive | Position, period | Year | Salaries | Pensions | Other Benefits | Total Compensation
--- | --- | --- | --- | --- | --- | ---
Terje Vedeler | CEO | 2024 | 215 | 15 | 5 | 235
|  | 2023 | 320 | 14 | 6 | 341
Erik Sterud | CFO, until 15.08.2024 | 2024 | 98 | 10 | 1 | 110
|  | 2023 | 211 | 15 | 3 | 229
Pia Helland | CFO, from 16.08.2024 | 2024 | 110 | 6 | 1 | 117
|  | 2023 | 0 | 0 | 0 | 0
David Inge Tveito | COO | 2024 | 148 | 15 | 7 | 170
|  | 2023 | 169 | 14 | 10 | 192
Bjarte Skår | CCO | 2024 | 149 | 15 | 11 | 175
|  | 2023 | 130 | 14 | 13 | 157

Pension

The Group has an established pension scheme that is classified as a defined contribution plan. The pension scheme is in line with the requirements of the law. Contributions to the defined contribution schemes are recognized in the consolidated statement of profit and loss in the period in which the contribution amounts are earned by the employees. The defined contributions plan does not commit Småkraft beyond the amounts contributed.

###### Fees paid to external auditors

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Statutory audit | 437 | 384
Tax counselling | - | -
Other assurance services | 46 | 107
Other services | - | -
Sum | 483 | 491

#### Note 10 Other operating expenses

Amounts in EUR thousand | 2024 | 2,023
Water rights costs* | 5,097 | 3,774
El-certs costs | 0 | 152
Transmission costs | 3,147 | 3,016
Property tax and licence fees | 3,206 | 3,004
Telecommunications | 57 | 53
Rent and related expenses | 746 | 758
Transport | 78 | 75
Purchase of various services | 3,968 | 4,238
IT expenses | 968 | 720
Repair/maintenance regarding equipment, machines etc. | 2,395 | 4,635
Consultant services | 2,118 | 1,662
Other operating expenses | 3,553 | 2,943
Other operating expenses | 25,333 | 25,032
*See also note 23.

#### Note 11 Financial items

Financial income |  |
Amounts in EUR thousand | 2024 | 2,023
Interest income | 2,016 | 1,958
Other financial income | 30 | 24
Total | 2,046 | 1,982

Financial expenses |  |
Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Interest expense | 19,737 | 12,111
Other financial expenses | 1,147 | 1,214
Total | 20,883 | 13,325

#### Note 12 Taxes

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Profit/(loss) before tax | -20,879 | 34,876
Tax rate, percent | 22% | 22%
Expected tax expense (income) | -4,593 | 7,673
Effect on taxes of
Permanent differences | -6 | 259
Taxes on resource rent payable | 75 | 471
Deferred resource rent tax | 228 | 84
Changes related to deferred tax on off-balance sheet items | 882 | -824
Other changes, including tax effect of different tax rates in other countries | -207 | -29
Tax expense (income) | -3,621 | 7,633
Effective tax rate | 17% | 22%

Taxes payable in the balance sheet

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Tax payable (receivable) from previous years | -111 | 271
Income tax payable | 262 | 424
Taxes on ground rent payable/receivable | 74 | 478
Natural resource tax payable | 81 | 84
Used natural resource tax | - | -
Taxes payable in the balance sheet | 306 | 1,257

Specification of temporary differences and deferred tax

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Fixed assets | 201,390 | 214,823
Current assets/current liabilities | 678 | 632
Interest deduction carry forward | -1,353 | -1,298
Unrealized derivatives | -609 | -22,936
Deferred ground rent tax | 336 | 116
Natural resource rent tax carried forward | -114 | -115
Other differences | 1,151 | 1,066
Temporary differences | 201,478 | 192,288
Losses carried forward | -128,983 | -98,470
Differences not affecting deferred tax* | -163,299 | -170,568
Basis for deferred tax | -90,804 | -76,750
Net deferred tax assets (-)/liability (+) in the balance sheet, | -19,896 | -16,913
Deferred tax (assets) | -19,896 | -16,913
*Deferred taxes are not recognised for temporary differences that arise on initial recognition assets acquired in a transaction which is not a business combination.
Deferred tax assets are capitalized due to surplus values related to the powerplants.
Deferred taxes on ground rent are included in defered tax. The amount is not significant in 2024 and 2023.

###### Presentation

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Deferred tax assets | 26,676 | 16,913
Deferred tax liabilities | 6,781 | -
Net | 19,895 | 16,913

#### Note 13 Derivatives

###### Derivatives

The Group has derivatives related to the hedging of income from future power production, interests in connection with interest bearing debt and currency volatility between EUR and NOK.

The table below shows the financial position and profit and loss accounts for the derivatives:

31.12.2024 |  |  |  |
Amounts in EUR thousand | Energy derivatives | Interest rate swaps | Currency derivatives | Total
--- | --- | --- | --- | ---
Opening balance (net) 31/12/2023 | -24,869 | 3,825 | -2,570 | -23,614
Additions/sale | -343 | 0 | 0 | -343
Fair value changes | 18,185 | -2,554 | -1,203 | 14,428
Cash settlement | 7,252 | 0 | 0 | 7,252
Currency translation differences | 813 | -155 | 138 | 796
Sum | 1,038 | 1,116 | -3,635 | -1,480
Classification |  |  |  |
Non-current asset | 2,214 | 1,095 | 0 | 3,309
Current Asset | 1,346 | 20 | 0 | 1,367
Total asset | 3,560 | 1,116 | 0 | 4,676
Non-current liabilities | 0 | 0 | 30 | 30
Current liabilities | 2,522 | 0 | 3,604 | 6,126
Total liability | 2,522 | 0 | 3,635 | 6,156

31.12.2023 |  |  |  |
Amounts in EUR thousand | Energy derivatives | Interest rate swaps | Currency derivatives | Total
--- | --- | --- | --- | ---
Opening balance (net) 31/12/22 | -104,447 | 9,249 | -1,115 | -96,312
Additions/sale | -1,452 | 0 | 0 | -1,452
Fair value changes | 55,857 | -4,762 | -1,503 | 49,592
Cash settlement | 17,277 | 0 | 0 | 17,277
Currency translation differences | 7,897 | -662 | 48 | 7,283
Sum | -24,869 | 3,825 | -2,570 | -23,614
Classification |  |  |  |
Non-current asset | 0 | 714 | 0 | 714
Current Asset | 1,029 | 3,111 | 0 | 4,140
Total asset | 1,029 | 3,825 | 0 | 4,854
Non-current liabilities | 8,241 | 0 | 283 | 8,524
Current liabilities | 17,657 | 0 | 2,287 | 19,944
Total liability | 25,898 | 0 | 2,570 | 28,468

All the derivatives are valued at fair value at level 2 in accordance to the fair value hierarchy: “Fair value is based on data inputs other than quoted prices included in Level 1, which are observable for the asset, either directly or indirectly”.

#### Note 14 Intangible assets

Amounts in EUR thousand | Waterfall right Time-unlimited | Waterfall rights Time-limited* | Total
--- | --- | --- | ---
Cost at 1 January 2023 | 4,095 | 220,217 | 224,313
Additions | - | 6,008 | 6,008
Acquisition of subsidiaries | - | 28,383 | 28,383
Currency translation | -265 | -13,686 | -13,951
Cost at 31 December 2023 | 3,831 | 240,922 | 244,753
Additions |  | 904 | 904
Acquisition of subsidiaries | - | 6,678 | 6,678
Currency translation | -180 | -10,707 | -10,887
Cost at 31 December 2024 | 3,651 | 237,798 | 241,448
Acc. deprecations at 1 Jan. 2023 | - | -8,049 | -8,049
Amortisation charge | - | -3,603 | -3,603
Impairment charge | - | -1,958 | -1,958
Currency translation | - | 431 | 431
Acc. depreciations at 31 Dec. 2023 | - | -13,179 | -13,179
Amortisation charge | - | -3,927 | -3,927
Impairment charge | - | -1,422 | -1,422
Currency translation |  | -32 | -32
Acc. depreciations at 31 Dec. 2024 | - | -18,560 | -18,560
Balance at 1 January 2023 | 4,095 | 212,168 | 216,263
Balance at 31 December 2023 | 3,831 | 227,743 | 231,574
Balance at 31 December 2024 | 3,651 | 219,238 | 222,887

Intangible assets by country

Amounts in EUR thousand | Norway | Sweden | Total
--- | --- | --- | ---
Balance at 31 December 2023 | 209,672 | 21,902 | 231,574
Balance at 31 December 2024 | 201,896 | 20,992 | 222,887

*Waterfall rights time-unlimited includes rights acquired as part of the acquisition of a power plant and goodwill. Goodwill is as of 31 December 2024 EUR 7,043 thousand. The group’s goodwill originates from historical acquisitions of power plant companies and arose because deferred tax was valued at nominal amounts whereas discounted amounts were reflected in the purchase amounts. The difference between deferred tax valued at nominal and discounted amounts was recognised as goodwill.

#### Note 15 Impairment testing

Goodwill and intangible asset with an indefinite useful life are not subject to amortisation and is tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired.

Non-financial assets are allocated to cash-generating units for the purpose of impairment testing. Each CGU being the physical power plant installation and the associated water right lease agreement in the same connected water system. As of year-end management has performed an impairment test for all CGU’s and found that the recoverable amount is higher than the carrying amount, for all CGU’s with the exception of 6 CGU’s. An impairment was recognised for each of the 6 CGUs, amounting to a total impairment of EUR 1,422 thousand. The recoverable amount of the 6 CGUs was based on the asset’s estimated fair value and amounted to EUR 31,083 thousand. The fair value measurement was level 3 according to the fair value hierarchy.

The recoverable amount has been estimated using the Discounted Cash Flow (DCF) method. The enterprise value (EV) for each CGU is calculated as the sum of the present values of future cash flows that a business can be expected to generate over its useful life, discounted by a weighted average cost of capital (WACC).

The most important assumptions behind the valuation are the following:

###### Power production

- Total yearly production for all power plants with no future increases per plant. All plants are fully operational.
- Production values based on estimates, which rely on historical production values to the extent possible and otherwise estimates in hydrological reports.
- Normalized yearly production is estimated based on a 30-year average of historical production for as many available years as possible and technical due diligence assumptions.

###### Power price

Future power prices are computed using the following methodology. The first year is based on Nasdaq forward prices, and from year 2 onwards an average of three different power price curves from power market analysts (SKM, Volue Insight, and Thema) is applied.

A capture rate that reflects the discount to the market price the specific power station achieves because of its production profile. Normally, an average capture rate is used on a portfolio of power stations.

###### Operational expenses include five main items:

- Grid fee
- Property tax
- Landowner compensation
- O&M
- Overhead costs

###### Cost of capital

Weighted Average Cost of Capital (WACC) for the current valuation is 6.6% for the Norwegian part of the portfolio compared to 6.7% used in the valuation last year. For the Swedish portfolio a WACC of 5.4% has been applied, compared to 5.9% used in the valuation last year.

###### Climate risk

Småkraft’s operations are largely dependent on precipitation, and changes in precipitation patterns may affect both our production and the price picture in the power market. Climate change is unpredictable and different scenarios will affect Småkraft’s production. Colder winters and dry summers may negatively affect Småkraft’s production, while milder winters and wetter summers may have a positive impact on Småkraft’s production. Climate change may also lead to more extreme precipitation and/or snowmelt, which may increase water loss over Småkraft’s dams. Climate change, as we are experiencing today, is moving in the direction of milder winters and wetter summers, resulting in increased production from our power plants. Climate risk is discussed in detail in Småkraft’s Sustainability Report and is considered not to have a significant impact on the impairment test.

#### Note 16 Property, plant and equipment

Amounts in EUR thousand | Power plants | Inlet and waterway | Infra- structure | Other | Plant under constructions | Total
--- | --- | --- | --- | --- | --- | ---
Cost at 1 January 2023 | 252,578 | 268,730 | 96,667 | 6,640 | 22,202 | 646,817
Additions, purchased, reallocations | -4,837 | 6,795 | 14,317 | -1,921 | 14,756 | 29,110
Acquisition of subsidiaries | 6,480 | 11,779 | 4,087 |  | 4,133 | 26,479
Effect of currency movements | -16,303 | -17,076 | -5,955 | -460 | -1,133 | -40,927
Cost at 31 December 2023 | 237,918 | 270,228 | 109,117 | 4,259 | 39,958 | 661,480
Additions, purchased, reallocations | 2,625 | 2,074 | 210 | 936 | 32,856 | 38,701
Acquisition of subsidiaries | 2,289 | 1,166 | 995 | - | - | 4,449
Effect of currency movements | -8,815 | -10,988 | -4,249 | -80 | -1,836 | -25,969
Cost at 31 December 2024 | 234,017 | 262,479 | 106,072 | 5,114 | 70,979 | 678,661
Acc. depreciations at 1 January 2023 | -47,076 | -33,281 | -17,477 | -2,125 | -971 | -100,929
Depreciation charge | -6,277 | -5,276 | -2,342 | -555 | - | -14,451
Effect of currency movements | 2,943 | 2,067 | 1,092 | 128 | 63 | 6,294
Acc. deprecations at 31 Dec. 2023 | -50,410 | -36,490 | -18,726 | -2,551 | -908 | -109,084
Depreciation charge | -8,083 | -5,330 | -2,388 | -554 | - | -16,354
Impairment charge |  |  |  | -495 |  | -495
Effect of currency movements | 45 | 30 | 17 | -5 | -459 | -373
Acc. deprecations at 31 Dec. 2024 | -58,447 | -41,790 | -21,096 | -3,606 | -1,367 | -126,307
Balance at 1 January 2023 | 205,503 | 235,449 | 79,191 | 4,515 | 21,231 | 545,888
Balance at 31 December 2023 | 187,507 | 233,739 | 90,391 | 1,708 | 39,050 | 552,396
Balance at 31 December 2024 | 175,570 | 220,689 | 84,975 | 1,508 | 69,611 | 552,353
Accumulated impairment charge 31 Desember 2024 | -879 | -353 | - | -495 | - | -1,727
Depreciation method | Straight-line | Straight-line | Straight-line | Straight-line |  |
Percentage | 1,2-20% | 1,25 - 2,5% | 1,25 - 2,85% | 12,5-20% |  |
Economic life | 5 ‑ 75 | 40 - 80 | 35 - 80 | 5 ‑ 8 |  |
Leased assets have been included as Other, with a net book value at 31 December 2024 of EUR 254 thousand.

Amounts in EUR thousand | Norway | Sweden | Total
--- | --- | --- | ---
Balance at 31 December 2023 | 537,599 | 14,795 | 552,395
Balance at 31 December 2024 | 537,788 | 14,566 | 552,353

Contractual obligations in signed Share Purchase Agreements and New-build contracts as per 31.12.2024 are specified in the table below:

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Short term | 45,532 | 43,448
Long term | 30,632 | 57,096
Outgoing balance | 76,164 | 100,544

#### Note 17 Investments

| Date of aquisition | Registered office | Ownership share | Voting rights | Presentation
Luster Småkraft AS | 2005 | Gaupne | 50% | 50% | Equity method
Rullestad & Skromme Energi AS | 2006 | Etne | 50% | 50% | Equity method
Proxima Hydrotech AS | 2021 | Seimsfoss | 33% | 33% | Equity method
Småvirkjanir EHF | 2022 | Reykjavik, Island | 50% | 50% | Equity method
Gjerdelva Kraft AS | 2022 | Dale, Sunnfjord | 50% | 50% | Equity method
Kraftanmelding AS* | 2024 | Skien | 8% | 8% | Fair value

Småkraft AS owns 50% of Luster Småkraft AS. The remaining 50% is owned by Luster Energi AS. The company successfully operates 3 small-scale hydro power plants: Kvåle, Holen and Vanndøla. Combined they have a normalized annual production of about 50 GWh.

Småkraft AS owns 50% of Rullestad & Skromme Energi AS. The remaining 50% is owned by Sunnhordland Kraftlag AS. The company has three hydropower plants under construction in Etne, Vestland. The annual production capacity for the powerplants is calculated to 89 GWh.

Småkraft AS owns 33% in Proxima HydroTech AS which is an independent service provider within operations and maintenance services. The company is focusing on services to hydropower plants and is developing relevant surveillance IT systems for the likes of Småkraft power plants.

Småkraft AS entered 23 December 2022 into a Sale and Purchase Agreement for 50% of the shares in Gjerdelva Kraft AS. Agreed remuneration for the shares is equivalent to EUR 22 thousand – payment of this amount will take place after construction of the power plant under construction have been finalized.

Småkraft AS acquired 8% of the shares in its powersale broker Kraftanmelding AS 1 September 2024.

Amounts in EUR thousand | Equity method | Fair value
--- | --- | ---
Closing balance at 31 December 2022 | 3,697 |
Investments previous year | 43 |
Dividend | -876 |
Share of current year net income | 118 |
Effect of currency movements | -251 |
Closing balance at 31 December 2023 | 2,731 | 0
Investments current year | 484 | 501
Effect of change in shares | -212 |
Dividend | -129 |
Share of current year net income | 286 |
Effect of currency movements | -132 | -7
Closing balance at 31 December 2024 | 3,028 | 493

#### Note 18 Receivables; amounts due after more than one year

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Loans to associates:
Loans to associates - R&S Energi AS | 2,649 | -
Provisions for loss on loans to associates | -60 | -
Other receivables:
Deposit rent | 101 | 102
Prepaid water right lease | 6,392 | 6,463
Other long term receivables | 1,101 | 1,126
Total | 10,182 | 7,691

The bank has pledged security in operating equipment and accounts receivable, in addition to first priority to the power plant and related water lease agreements.

Please see note 24 for further details about prepaid water right lease.

#### Note 19 Cash and cash equivalents

Bank deposits, cash etc. does not include restricted tax deduction funds as of 31.12.2024. The company has established a bank guarantee for the payment of withholding tax.

#### Note 20 Share capital, ownership structure and dividend

| No. of shares* | Share capital*
Amounts in EUR thousand | 2024 | 2023 | 2024 | 2023
--- | --- | --- | --- | ---
Ordinary shares
Issued and fully paid 1 January | 5,181,032 | 4,807,092 | 23,046 | 22,861
Issued new share capital | 220,601 | 373,940 | 953 | 1,669
Currency presentation effect |  |  | -1,101 | -1,483
31 December | 5,401,633 | 5,181,032 | 22,898 | 23,046
* Number of shares not registred are 35 684 (2023: 81 635) and share capital TEUR 151 (2023:TEUR 363).
Ownership structure 31.12.2024* | No. of shares | Nominal amount NOK | Voting share | Ownership share
Aquila GAM Fund GmbH & Co. Geschlossene Investmentkommanditgessellschaft | 785,744 | 50 | 14.5 % | 14.5 %
Aquila Capital Europeean Hydropower Fund S.A. | 1,155,487 | 50 | 21.3 % | 21.3 %
ACEH Norway 1 B.V. | 2,132,544 | 50 | 39.2 % | 39.2 %
ACEH Norway 2 B.V. | 1,279,432 | 50 | 23.5 % | 23.5 %
ACEH Smakraft Amaranthine C.V. | 84,110 | 50 | 1.5 % | 1.5 %
Sum | 5,437,317 | 50 | 100% | 100%
*Includes not registred capital increase

Dividends

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Ordinary dividends | 15,000 | 37,192
Extraordinary dividends | 0 | 0
Sum | 15,000 | 37,192

#### Note 21 Borrowings and guarantees

Borrowings

Amounts in EUR thousand |  |  |
Lenders | Currency | 31.12.2024 | 31.12.2023
--- | --- | --- | ---
Banks | NOK | 51,073 | 51,431
Banks | EUR | 175,876 | 168,613
Convertible debt from owners | EUR | - | 3,659
Green Bond 3 | EUR | 74,500 | 50,000
Green Bond 2 | EUR | 50,000 | 50,000
US private placement 1 | EUR | 80,000 | 80,000
US private placement 2 | EUR | 40,000 | 40,000
Other debt | NOK | 20 | 21
Capitalised loan expenses/ fees/ commissions | NOK | -2,599 | -2,900
Total |  | 468,869 | 440,824
Total long term debt |  | 454,812 | 276,512
Total short term debt |  | 14,057 | 164,312

*Convertible loan from shareholders will be converted to share capital within following quarter in accordance with loan agreement.

Changes in debt to financial institutions and bond debt during the year

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Ingoing balance | 440,824 | 434,067
Repayments/ downpayments: | -36,391 | -120,504
New debt | 61,273 | 123,474
Debt from purchased subsidaries | 4,051 | 6,185
Net capitalized transactions costs related to borrowings | -661 |
Capitalised loan expenses/ fees/ commissions | 827 |
Capitalized contruction loan interest | 1,402 |
Currency exchange rate changes | -2,456 | -2,398
Outgoing balance | 468,869 | 440,824

Secured borrowings etc.

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Borrowings from financial institutions and bondholders | 471,449 | 443,703
Agent commission | -2,599 | -2,900
Total | 468,849 | 440,803

Carrying amount of pledged assets

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Operating equipment | 1,729 | 1,232
Accounts receivable | 3,121 | 3,324
Power plants and related water lease agreements | 557,001 | 557,131
Total | 561,851 | 561,686

The bank and bondholders have pledged security in operating equipment, bank accounts and accounts receivable, in addition to 1. priority pledge in the power plants and related water lease agreements.

Småkraft AS has provided a bank guarantee as a security for the payment of withholding tax.

According to the shareholders agreement with Luster Småkraft AS, Småkraft AS is obligated to make capital available to Luster Småkraft AS.

See note 7 for information on debt covenants and maturity structure of the Group’s borrowings.

#### Note 22 Concessions

As of 31.12.2024, there are currently 21 power stations under construction representing an annual production of 289 GWh both owned by subsidiaries in the group and companies signed to be acquired.

In addition to this, Småkraft AS has concessions for additional 8 power plants with a potential annual production of approximately 85 GWh, where construction is not commenced.

#### Note 23 Water and lease agreements

As part of several of the net-agreements, Småkraft offers interest bearing loans and/ or minimum payments in the first years of the land lease agreements. Net agreements typically have deficits the first years. Småkraft offers interest bearing loans/ minimum payments to offer more stable payouts to the landowners, while simultaneously not amending the balance in the land lease agreement between landowner and company.

The loans are normally interest-bearing loans. The minimum payments are interest bearing payments to the landowners that will be offset against future land lease profits.

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Loans to landowners | 830 | 795
Minimum payments to landowners | 5,562 | 5,668
Total | 6,392 | 6,463
Amounts in EUR thousand | 31.12.2024 | 31.12.2023
Receivables towards landowners, off balance | 32,486 | 26,467
Total | 32,486 | 26,467

When net-agreements have deficit, Småkraft AS finances the landowner share of the deficit. Småkraft AS accrues a receivable against the landowners, against which future profits will offset. This is a contingent asset to Småkraft, that according to IFRS is off balance. It represents a future benefit for the company contingent on future profits from the power plant.

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Gros | 4,280 | 5,137
Net | 733 | 1,841
Fixed | 125 | 173
Settlements | -41 | -3,377
Total | 5,097 | 3,774

The table shows the different water lease agreements with the landowners.

#### Note 24 Related party transaction and balance items

Småkraft Group and its associates have seeked to do transactions on commercial terms. These are shown in the table below. Associated companies are listed in note 17.

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Sales of various goods and services | 8 | 8
Purchase of services from related party | 358 | 169
Interest income from loans | 150 |
Interest bearing loans | 2,501 | -
Liabilities at the end of the period | 15 | 59

### Alternative Performance Measures

Adjusted Power revenues is defined as Power revenues adjusted for Realised value change on energy derivatives. Småkraft uses this APM to visualize cash flow generated from power sales over time.

EBITDA is defined as operating profit (-loss) + depreciation of fixed assets and intangible assets + impairment of fixed assets and intangible assets. This APM is widely used by analysts comparing Norwegian Hydropower companies.

Småkraft uses this APM to visualize performance over time irrespective of price.

Adjusted EBITDA is defined as operating profit (-loss) + depreciation of fixed assets and intangible assets + impairment of fixed assets and intangible assets – unrealised value change on energy derivatives. Småkraft uses this APM to measure performance from operational activities. Unrealised value on energy derivatives is deducted in the adjusted figures as the value change on these derivatives usually be negatively correlated to value changes in future power production that is not recognised, thus creating an accounting mismatch that is not alleviated through hedge accounting. Adjusted EBITDA should not be considered as an alternative to operating profit/loss and profit/loss before tax as an indicator of the company’s operations in accordance with generally accepted accounting principles. Nor is adjusted EBITDA underlying an alternative to cash flow from operating activities in accordance with generally accepted accounting principles.

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Power revenue | 54,433 | 67,758
Realized value change on energy derivatives | -7,252 | -17,277
Adjusted power revenue | 47,181 | 50,482
Amounts in EUR thousand | 2024 | 2023
Operating profit (loss) | 21,358 | 75,519
Depreciation, amortization, impairment | 22,198 | 20,010
EBITDA | 43,556 | 95,529
Change in unrealized value change on energy derivatives | -25,437 | -73,133
Adjusted EBITDA | 18,119 | 22,396

## Annual accounts and notes Småkraft AS – parent company

### Statement of income and statement of other comprehensive income

Amounts in EUR thousand | Note | 2024 | 2023
--- | --- | --- | ---
Power revenue | 8 | 23,487 | 30,392
Other income | 8 | -54 | 522
Fair value change on energy derivatives | 13 | 18,185 | 55,857
Unrealized value change on energy derivatives |  | 25,437 | 73,133
Realized value change on energy derivatives |  | -7,252 | -17,277
Payroll and related costs | 9 | -4,172 | -4,430
Depreciation and impairment of fixed assets and intangible assets | 14, 15, 16 | -8,116 | -7,875
Other operating expenses | 10 | -10,960 | -8,686
Operating profit/(loss) |  | 18,370 | 65,780
Financial income | 11 | 6,198 | 36,814
Net foreign exchange gain (loss) |  | -13,177 | -16,709
Fair value changes on interest rate and currency derivatives | 7, 13 | -3,386 | -5,906
Financial expenses | 11 | -12,844 | -6,917
Net financial items |  | -23,208 | 7,281
Profit/(loss) before tax |  | -4,838 | 73,061
Tax income (expense) | 12 | 1,198 | -13,712
Profit (loss) |  | -3,641 | 59,348
Other comprehensive income:
Items that will not be reclassificed to profit or loss
Currency translation differences |  | -18,635 | -19,289
Total comprehensive income for the year |  | -22,275 | 40,059

### Statement of financial position

Amounts in EUR thousand | Note | 31.12.2024 | 31.12.2023
--- | --- | --- | ---
Intangible assets | 14 | 21,057 | 21,875
Property, plant and equipment | 16 | 178,467 | 191,753
Deferred tax assets | 12 | 21,662 | 21,492
Investments in subsidiaries | 5 | 376,949 | 367,428
Investments | 17 | 1,051 | 623
Derivatives | 13 | 2,995 | -0
Other long-term receivables | 18 | 58,965 | 53,517
Total non-current assets |  | 661,145 | 656,688
Current assets
Inventories |  | 382 | 625
Trade receivables | 7 | 1,635 | 1,240
Other receivables | 7 | 1,685 | 730
Derivatives | 13 | 1,367 | 4,128
Cash and Cash equivalents | 19 | 12,789 | 18,582
Total current assets |  | 17,857 | 25,305
Total assets |  | 679,002 | 681,993

### Statement of financial position, continued

Amounts in EUR thousand | Note | 31.12.2024 | 31.12.2023
--- | --- | --- | ---
Share capital | 20 | 22,898 | 23,046
Paid-in capital | 20 | 399,196 | 402,500
Other equity |  | -37,365 | -35,442
Total Shareholders equity |  | 384,729 | 390,104
Non-current liabilities
Borrowings | 21 | 277,750 | 102,755
Derivatives | 13 | 30 | 8,524
Other non-current liabilities | 7 | 276 | 467
Total non-current liabilities |  | 278,056 | 111,747
Current liabilities
Accounts payable | 7 | 650 | 1,700
Public duties payable | 7 | 901 | 493
Derivatives | 13 | 6,126 | 19,944
Borrowings | 21 | 4,000 | 152,669
Other current liabilities | 7 | 4,538 | 5,337
Total current liabilities |  | 16,216 | 180,142
Total liabilities |  | 294,272 | 291,889
Total equity and liabilities |  | 679,002 | 681,993

Bergen, Norway, 25 March 2025
The Board of Directors, Småkraft AS

Member of the Board
Claudia Ahnert

Chairperson of the Board
Annette Malm Justad

Member of the Board
Oldrik Verloop

Member of the Board
Felix Renneke

CEO
Terje Vedeler

### Statement of changes in equity

Amounts in EUR thousand | Note | Share capital | Paid-in capital | Foreign currency translation* | Retained earnings | Total equity
--- | --- | --- | --- | --- | --- | ---
Equity at 01.01.2023 |  | 22,861 | 401,420 | -17,406 | -85,076 | 321,801
Net profit |  |  |  |  | 59,348 | 59,348
Currency translation differences |  | -1,483 | -25,382 | -19,289 | 26,866 | -19,289
Total comprehensive income for the period |  | -1,483 | -25,382 | -19,289 | 86,214 | 40,059
Capital increase | 20 | 1,669 | 63,654 |  |  | 65,323
Effect from merger |  |  |  |  | 111 | 111
Dividend |  |  | -37,192 |  |  | -37,192
Equity at 31.12.2023 |  | 23,046 | 402,500 | -36,695 | 1,250 | 390,104
Net profit |  |  |  |  | -3,641 | -3,641
Currency translation differences |  | -1,102 | -19,255 | 1,729 | -7 | -18,635
Total comprehensive income for the period |  | -1,102 | -19,255 | 1,729 | -3,648 | -22,275
Capital increase current period | 20 | 953 | 24,655 |  |  | 25,608
Capital increase current period not registered |  |  | 6,295 |  |  | 6,295
Dividend |  |  | -15,000 |  |  | -15,000
Equity at 31.12.2024 |  | 22,898 | 399,196 | -34,966 | -2,399 | 384,729

### Statement of cash flow

Amounts in EUR thousand | Note | 2024 | 2023
--- | --- | --- | ---
Cash flow from operations
Profit (-loss) before income tax |  | -4,838 | 73,061
Depreciation, amortization, impairment | 14. 16 | 8,116 | 7,875
Dividends from investments in subsidiaries |  |  | -32,843
Net financial items |  | 11,462 | 784
Cash settlement derivatives |  | -7,252 | -17,277
Change in unrealized currency gains/losses |  | 12,313 | 18,621
Change in unrealized derivatives | 13 | -14,799 | -49,950
Change in working capital |  | -5,781 | 10,692
Net cash flow from operations |  | -780 | 10,963
Cash flow from investment activities
Outflows due to purchases of fixed assets and intangibles |  | -3,997 | -11,412
Outflows due to investments in subsidiaries | 5 | -27,179 | -48,046
Outflows due to investments in other financial assets |  | -508 | -42
Inflows from sale of other financial assets |  | 0 | 1,452
Inflows from dividend from equity accounted investments |  | 0 | 876
Inflows from dividend in subsidiaries |  | 0 | 11,214
Outflows from loans to others |  | -22,264 | -2,664
Inflows from loans to others |  | 17,931 | 9,071
Net cash flow from investment activities |  | -36,017 | -39,552
Cash flow from financing activities
Capital increases | 20 | 31,903 | 65,323
Dividend payments |  | -15,000 | -37,192
Interest paid* |  | -11,445 | -5,440
Inflows from loan raising | 21 | 41,118 | 54,426
Outflows from loan payments | 21 | -14,658 | -87,810
Net cash flow from financing activities |  | 31,918 | -10,693
Currency translation differences |  | -914 | -4,551
Net change in bank deposits and cash |  | -4,879 | -39,282
Bank deposits from merged companies |  | 0 | 639
Bank deposits and cash at beginning of period |  | 18,582 | 61,777
Bank deposits and cash at end of period |  | 12,789 | 18,582
* Presentation of interest payments is changes from operating to financing cash flows in the 2024 financial statements.

### Notes

#### Note 1 General information

Småkraft (the Company) is located in Bergen, Norway, with local offices in Harstad, Stjørdal, Dale, Førde, Hamar and Sandnes in Norway,The Company employs 31 people. All of Småkraft’s business is in Norway. Småkraft is a supplier of renewable energy based on small scale hydro power plants. In addition, Småkraft AS has subsidiaries in the same industry in Norway and Sweden.

Småkraft’s consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU and further requirements in Norwegian Accounting Law (Regnskapsloven).

The statement of comprehensive income, statement of financial position, statement of equity, statement of cash flow and notes provide comparable information in respect of the previous period.

The financial statements have been prepared on a historical cost basis except for financial derivatives which are measured at fair value. The preparation of financial statements in conformity with IFRS requires the use of certain accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies.

Presentation and classification of items in the financial statements is consistent for the periods presented.

#### Note 2 General accounting policies

###### Foreign currency translation

Functional and presentation currency

The functional currency of Småkraft AS is the Norwegian krone (NOK). The Company accounts are presented in EUR. Småkraft AS presents the financial statement in EUR, as most of the lenders and the owners are EUR based.

The currency differences arising in the translation to the presentation currency are presented in Other Comprehensive Incomes. Also, in the statement of equity the translation difference is included in retained earnings. All amounts are rounded to the nearest EUR thousand.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rate at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are generally recognized in profit or loss. Småkraft uses currency exchange rates from Norges Bank.

###### Sale of energy

The revenues from sale of energy bear the characteristic of delivering power at a certain price. The performance obligation is to deliver a series of distinct goods (power) and the transaction price is the consideration expected to receive, at either spot price, regulated price or contract price. The performance obligation is satisfied over time which entails that revenue should be recognized for each unit delivered at the transaction price. Småkraft applies a practical expedient under IFRS 15 whereby the revenue from power for most of the contracts is recognized at the amount of which the entity has a right to invoice. The right to invoice power arises when power is produced and delivered and the right to invoice the consideration will normally correspond directly with the value to the customer. In arrangements where Småkraft sells power on an exchange (e.g. Nord Pool), the exchange is determined to be the customer.

###### Segments

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. Furthermore, the entity’s component’s operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance, and thus separate financial information is available. The company has determined that the board of directors is collectively the chief operating decision maker.

The Company has only one segment: Power supply. Småkraft produces renewable energy and sells electricity, el- certificates and guarantees of origin on the Nordic power market.

###### Property, plant and equipment

Property, plant and equipment is measured at historical cost less accumulated depreciation. Land is not depreciated. Historical cost includes expenditures that are directly attributable to the acquisition of the item. Borrowing costs incurred during the manufacturing of tangible non-current assets are capitalised until the asset is ready for its intended use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. Repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate costs over their estimated useful lives. The assets’ useful lives are reviewed annually and adjusted if appropriate.

Gains and losses on disposals are determined by comparing actual proceeds with the carrying amount. Gains and losses on disposal are included in profit or loss.

###### Intangible assets

Waterfall right is recognised as a separate intangible asset. Småkraft distinguishes waterfall rights in time-limited and unlimited groups regardless of how they were acquired. Reference is made to note 14.

Intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses. Costs relating to intangible assets, are recognised in the statement of financial position when it is probable that the asset will generate future economic benefits and the costs can be measured reliably.

Intangible assets with a definite useful life, such as water rights owned are amortised over the useful life. Intangible assets with an indefinite useful life are not amortised but are instead tested annually for impairment.

###### Leases

The Company´s main lease type of agreements is related to water rights. The rights are considered intangible assets. Småkraft has elected to not recognize these types of agreements under IFRS 16 leases. The accounting treatment of the different water right lease agreements are described below:

Water right lease agreements

Småkraft enters into water right lease agreements with landowners, which entitles the company to utilize the water in the rivers. The agreement typically has a period varying from 40 to 75 years, starting when the power plant is put into commercial operation.

When Småkraft has a commitment to pay rent to the landowners, we account for this as a regular cost as the commitment arises. Such commitment arises, when:

1. Gross agreement/revenue-based agreement: Småkraft pays landowner a percentage of the annual power plant revenue. Upon expiration of the agreement the landowners have the right to purchase the power plant with all rights and technical installations at a price based on certain specific conditions.

Småkraft accounts for this land lease when the relevant power plant generates revenue, upon which this land lease bases.

1. Fixed amount agreement: Småkraft pays landowner a fixed annual amount. Upon expiration of the agreement the landowner has the right to purchase the powerplant with all rights and technical installations at a price based on certain specific conditions.

Småkraft accounts for this land lease monthly based upon the agreed yearly payment.

1. Profit share agreement: Småkraft shares the yearly powerplant profit with the landowner. Upon expiration of the agreement the landowners have the right to purchase the power plant with all rights and technical installations based on certain specific conditions.

Småkraft accounts for this land lease type by calculating the actual profit for each individual power plant on a monthly basis. Småkraft then calculates the exact share of the profit, that the landowners have the right to receive. If Småkraft is in a position, where land lease should be paid to landowners, Småkraft accounts for the estimated payment as a cost.

In the case that Småkraft has a profit share lease agreement, where there (still) is an accumulated loss on the powerplant, Småkraft has the right to offset all accumulated losses before paying out land lease rent to the landowners. This will represent a future benefit for the company, that Småkraft does not recognise as an asset. This asset will be off-balance. Any positive or negative changes in these off-balance items, will not be recognised in Småkraft’s books. In some instances, Småkraft may pay out loans or minimum payments to landowners. These loans are interest bearing loans and will be recognised as normal loans in the Company´s Financial Statements.

###### Financial instruments

Financial instruments are recognised in the financial statements when the Company becomes party to contractual conditions relating to the financial instrument. Financial assets and financial liabilities are classified based on the type and purpose for holding the instruments at fair value, amortised cost or as a designated hedge accounting instrument (e.g. derivatives used for hedging financial risks).

Financial assets

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value, and
- those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will be recorded in profit or loss. Financial assets recognised at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value of the financial instruments at fair value through profit or loss, including interest and dividends, are recognised in the income statement. Derivatives are always measured at fair value through profit or loss.

Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss.

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Accounts receivables and accrued revenue

Accounts receivables are measured at initial recognition at fair value. Accounts receivables are held with the objective to collect the contractual cash flows and therefore are subsequently measured at amortised cost using the effective interest method. For the purposes of impairment, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from the date of initial recognition of the receivables.

###### Financial liabilities

The Company classifies all financial liabilities at amortised cost, except for derivatives which are at fair value and financial guarantees (see below).

Accounts payables and other financial payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of period which are unpaid. They are recognised at fair value. Småkraft does not subsequently measure at amortised cost using the effective interest method, as the difference is insignificant. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled, or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

###### Taxes

Income taxes

Income tax is calculated in accordance with ordinary tax rules and by applying the adopted tax rate. The tax expense in the statement of comprehensive income comprises taxes payable and changes in deferred tax liabilities and deferred tax assets. Taxes payable are calculated on the basis of the taxable income for the year. Deferred tax liabilities and deferred tax assets are calculated on the basis of temporary differences between the accounting and tax values and the tax effect of losses carried forward. From 2020 and onward, Småkraft uses the initial recognition exemption for the tax effect on temporary differences relating to purchase of power plants.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Tax related to items recognised in other comprehensive income is also recognised in other comprehensive income, while tax related to equity transactions is recognised in equity.

###### Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

###### Contributed equity

Ordinary shares are classified as equity. Issuance of new shares are recognised when paid, based upon the decision by the General Meeting. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

Adoption of new and revised standards

The following standards and amendments were mandatory application for the first time for the reporting period commencing 01.01.2024:

- Supplier Finance Arrangements (Amendments to IAS 7 & IFRS 7)
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
- Non-current Liabilities with Covenants (Amendments to IAS 1)

None of the amendments listed above have had any significant impact on the financial statements.

Standards and amendments issued but not yet effective

Certain amendments to accounting standards have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the group. These amendments are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

#### Note 3 Key accounting estimates and judgements

###### Introduction

The use of reasonable estimates and judgements is a critical element in preparing the financial statements. Due to the level of uncertainties inherent in Småkraft’s business activities, management must make certain estimates and judgements that effect the application of accounting policies, results of operations, cash flows and financial position as reported in the financial statements.

###### Areas of significant estimates

Impairment testing of property plant and equipment (PPE) and intangible assets

In performing the impairment assessment of the carrying amount of PPE and intangible assets, as disclosed in Note 15, the recoverable amounts of the cash generating units (“CGUs”), are determined based on fair value less cost of disposal. Significant judgements are used to estimate the long-term price forecast for power and pre-tax discount rates applied in computing the recoverable amounts of different CGUs. In making these estimates, management has relied on market development and estimates from external consultancies as disclosed in note 15.

Fair value measurement of energy derivatives

Significant estimates are applied in the valuation of the Group’s long term power purchase and power sales contracts. The fair value estimate is based on the amounts for which the assets or liabilities could be exchanged at the relevant transaction date on the reporting period end. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature subject to uncertainty, particularly where comparable market-based transactions do often not exist. In such cases Småkraft’s management is required to make market-based assumptions, see note 13.

#### Note 4 Subsequent events

After the year-end, Småkraft has expanded its portfolio of power plants even further. On 31 January 2025, Småkraft completed the acquisition of 100% of the shares in Nye Grøvla Kraft AS, adding an operating power plant with a capacity of 7.3 GWh to its portfolio in Norway. Additionally, on 30 January Småkraft AB acquired Våmåns Kraft AB, including an additional power plant of 4 GWh in Sweden.

#### Note 5 Subsidiaries

Group companies | Date of acquisition/ Incorporation | Registered office | Ownership share | Voting share
--- | --- | --- | --- | ---
Småkraft AS |  | Bergen |  |
Reinli Kraft AS | 2005 | Bergen | 51% | 51%
Muoidejohka Kraft AS | 2010 | Bergen | 60% | 60%
Jorda Kraft AS | 2012 | Bergen | 51% | 51%
Kvemma Kraft AS | 2013 | Lærdal | 66% | 66%
Holmen Kraft AS | 2016 | Bergen | 100% | 100%
Follsjå Kraft AS | 2016 | Bergen | 82% | 82%
Sigdestad Kraftverk AS | 2018 | Bergen | 52% | 52%
Holsen Kraft Norddøla AS | 2020 | Bergen | 100% | 100%
Ytre Kandal Kraft AS | 2020 | Sandane | 61% | 61%
Fossåa 1 K AS | 2020 | Sør- Fron | 66% | 66%
Tokheim Kraft AS | 2020 | Bergen | 100% | 100%
Småkraft Green Bond 2 AS | 2020 | Bergen | 100% | 100%
Småkraft USPP 1 AS | 2022 | Bergen | 100% | 100%
Chr Salvesen & Chr Thams’s Communications AS | 2022 | Bergen | 100% | 100%
Svorka Småkraft AS | 2023 | Bergen | 65% | 65%
Småkraft Vekst 2025 AS | 2023 | Bergen | 100% | 100%
Småkraft Vekst 2026 AS | 2023 | Bergen | 100% | 100%
Glutra Kraft AS | 2024 | Bergen | 100% | 100%
Teitafossen Kraft AS | 2024 | Bergen | 100% | 100%
Småkraft Green Bond 1 AS | 2018 | Bergen | 100% | 100%
Saksenvik Kraft AS | 2016 | Bergen | 96% | 96%
Midt Kraft AS | 2023 | Bergen | 100% | 100%
Småkraft AB | 2022 | Uppsala | 100% | 100%
Småkraft Operations AB | 2022 | Uppsala | 100% | 100%

#### Note 6 Management of capital structure

The main aims of the Company’s management of its capital is to maintain a reasonable balance between the company’s debt and total assets. The Company has a long-term investment horizon, with contractual arrangements and investments that will last for decades. The reasonable balance between debt and total assets is thus set based upon the expectations towards short-term and long-term price expectations.

Overview of capital included in management of capital structure:

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Total non-current assets | 661,145 | 656,688
Interest-bearing liabilities, non-current | 277,750 | 102,755
Interest-bearing liabilities, current | 4,000 | 152,669
Cash and cash equivalents, excluding restricted cash | 12,789 | 18,582
Net interest- bearing liabilities (NIB) | 268,961 | 236,842
NIB/ Total non-current assets | 41% | 36%

Covenants

Småkraft group have various loan agreements with financial covenants requirements. As per 31 December 2024 all covenant requirements have been satisfied. Reference is made to Note 7 of the Consolidated Financial Statements.

#### Note 7 Financial instruments – Risk Management

The company is exposed through its operations to the following financial risks:

- Credit risk
- Interest rate risk
- Foreign exchange risk
- Market price risk
- Liquidity risk

In common with all other businesses, Småkraft is exposed to risks that arise from its use of financial instruments. This note describes Småkraft objectives, policies, and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the company’s exposure to financial instrument risks, its objectives, policies, and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

###### Principal financial instruments

The principal financial instruments used by Småkraft, from which financial instrument risk arises, are as follows:

- Trade receivables
- Cash and cash equivalents
- Trade and other payables
- Bank overdrafts
- Floating-rate bank loans
- Fixed rate loans
- Interest rate swaps, and
- Forward currency contracts

31.12.2024 |  |  |  |  |
Amounts in EUR thousand | Financial assets at fair value | Financial assets at amortized cost | Financial liabilities at fair value | Financial liabilities at amortized cost | Total
--- | --- | --- | --- | --- | ---
Assets
Investments |  |  |  |  | -
Long-term receivables |  | 58,965 |  |  | 58,965
Trade receivables |  | 1,635 |  |  | 1,635
Other receivables |  | 1,685 |  |  | 1,685
Derivatives non-current | 2,995 |  |  |  | 2,995
Derivatives current | 1,367 |  |  |  | 1,367
Cash and cash equivalents |  | 12,789 |  |  | 12,789
Liabilites
Borrowings non-current |  |  |  | -277,750 | -277,750
Borrowings |  |  |  | -4,000 | -4,000
Accounts payable |  |  |  | -650 | -650
Other non-current liabilities |  |  |  | -276 | -276
Other current liabilities |  |  |  | -4,538 | -4,538
Derivatives non-current |  |  | -30 |  | -30
Derivatives current |  |  | -6,126 |  | -6,126
Net financial assets and liabilities | 4,361 | 75,073 | -6,156 | -287,215 | -213,937

31.12.2023 |  |  |  |  |
Amounts in EUR thousand | Financial assets at fair value | Financial assets at amortized cost | Financial liabilities at fair value | Financial liabilities at amortized cost | Total
--- | --- | --- | --- | --- | ---
Assets
Long-term receivables |  | 53,517 |  |  | 53,517
Trade receivables |  | 1,240 |  |  | 1,240
Other receivables |  | 730 |  |  | 730
Derivatives non-current
Derivatives current | 4,128 |  |  |  | 4,128
Cash and cash equivalents |  | 18,582 |  |  | 18,582
Liabilites
Borrowings non-current |  |  |  | -102,755 | -102,755
Borrowings |  |  |  | -152,669 | -152,669
Accounts payable |  |  |  | -1,700 | -1,700
Other non-current liabilities |  |  |  | -467 | -467
Other current liabilities |  |  |  | -5,337 | -5,337
Derivatives non-current |  |  | -8,524 |  | -8,524
Derivatives current |  |  | -19,944 |  | -19,944
Net financial assets and liabilities | 4,128 | 74,069 | -28,468 | -262,929 | -213,200

###### Financial instruments not measured at fair value

Financial instruments not measured at fair value includes cash and cash equivalents, trade and other receivables, trade and other payables, and loans and borrowings. The carrying value approximates their fair value.

###### (iii) Financial instruments measured at fair value

There were no transfers between levels during the period.

All the derivatives are valued at fair value at level 2 in accordance with the fair value hierarchy. For additional information see note 13.

###### Risk and risk management of financial instruments

Småkraft is engaged in activities that entail risk in many areas and has a unified approach to the Company’s market risks. The risk management policy is based upon assuming the right risk based on the ability and willingness to take risks, expertise, financial strength, and development plans. The purpose of risk management is to identify threats and opportunities, and to manage the overall risk level to provide reasonable assurance that the Company´s objectives will be met. In Småkraft, market risk will primarily relate to prices of energy, interest rates and foreign currency. The following section contains a more detailed description of the various types of market risk, and how these are managed.

###### Description of market risk related to prices on energy and commodities

Småkraft is exposed to significant market risk in relation to the generation and trading of power. Revenues from power generation are exposed to volume and power price risk. Småkraft manages market risk in the energy markets by trading physical and financial instruments in the Nordic Market.

Risk management in energy trading in Småkraft focuses on residual market exposure after considering land lease contracts and minority interests. In general, Småkraft enters standard fixed price contracts where Småkraft agrees to sell a certain production volume at an agreed price in the future. Around 1/4 of the expected annual production capacity for the next four to five years have such contracts to reduce the residual risk after land lease and minority interests.

Småkraft has set risk limits within which trading activities are allowed.

Småkraft has hedged a portion of the expected power sale. Total volume hedged for the future is shown in the table below:

Total hedged volume |  |  |
Amounts in GWh | Year 1 | Year 2 | Year 3
--- | --- | --- | ---
Pr. 31.12.2024 | 385 | 193 | 0
Pr. 31.12.2023 | 441 | 385 | 193

The energy derivatives are hedged against Nordic system prices. Småkraft also has EPADs for selected price areas.

Both realized cash effects and unrealized non-cash effects from trading are presented as a part of other revenue in the profit and loss statement.

###### Description of foreign exchange risk

Småkraft incurs currency risks in the form of transaction risk, mainly in connection with energy sales revenue and investments. Balance sheet risk is related to debt in EUR.

Småkraft settlement currency at the Nordic power exchange Nord Pool is EUR and NOK, and all power contracts traded in the Nordic power exchange Nasdaq are denominated in EUR. In addition, most of Småkraft’s power purchase agreements in Norway and all power purchase and sales abroad are denominated in EUR. The objective of Småkraft’s hedging is to secure the EUR value of future cash flows exposed to changes in foreign currency rates. Economic hedging is partly achieved by using debt in EUR currencies as hedging instruments. Few of these hedging relationships fulfil the requirements of hedge accounting.

As of 31 December, Småkraft’s net exposure to foreign exchange risk was as follows:

31.12.2024 | Functional currency of individual entity
--- | ---
Amounts in EUR thousand |  |  | NOK
Net foreign currency financial assets / (liabilites)
Currency
NOK |  |  | -
EURO |  |  | -275,956
SEK |  |  | 11,588
Total net exposure | - | - | -264,368
31.12.2023 | Functional currency of individual entity
Amounts in EUR thousand |  |  | NOK
Net foreign currency financial assets / (liabilites)
Currency
NOK |  |  | -
EURO |  |  | -251,261
SEK |  |  | 15,231
Total net exposure |  |  | -236,030

###### Description of interest rate risk

Småkraft’s interest rate risk is defined as gross interest exposure because of outstanding loans with floating interest rates as well as undrawn signed financing. As soon as a term sheet is signed, the interest rate exposure from this financing must be included in the interest rate risk calculation.

The ratio is defined as the expected outstanding loan balance with a fixed interest rate above the total expected outstanding loan balance. Småkraft must ensure that it stays within the following security level at all times:

| Year 1 | Year 2 | Year 3
Hedge ratio | 46% | 46% | 54%

###### Interest rate exposure for power plants under construction

In the same way that Småkraft does not hedge power prices for signed production during construction, the expected interest rate exposure for potential future debt linked to development is also not to be included in the interest rate risk calculations. This interest rate risk shall not be hedged.

###### Approved instruments

Småkraft can use interest rate swaps, fixed interest rate coupons or interest rate options. Options must only be used for hedging and stop-loss levels must be defined.

As of December 31, 2024, Småkraft has the following interest rate derivatives.

Interest rate derivatives |  |  |  |  |  |
Amounts in EUR thousand
Maturity date | Currency | Amount | Fixed rate | MTM | Secured part | EUR equivalent
--- | --- | --- | --- | --- | --- | ---
24.06.2027 | EUR | 79,000 | 4.20% | 801 | 50% | 79,000

The interest rate derivatives are linked to the bank loans. The future development in interest rates will affect the value of the interest rate derivatives.

| Increase(decrease) in basis points | Effect on profit before tax | Effect on equity
31.12.2024 | 100 | -2,818 | -2,198
31.12.2023 | 100 | -2,554 | -1,992

###### Credit risk

Credit risk is the risk that Småkraft incurs losses due to the failure of counterparties to honour their financial obligations. Småkraft is facing credit risk when entering transactions with financial institutions. Credit risk against financial institutions arises from cash or current account, deposit, investment of interest-bearing securities, derivative transactions, and incoming guarantees. Småkraft also assumes credit risk when providing loans to associates and joint ventures. In addition, Småkraft assumes credit risk in connection with physical sales contracts. The total risk of counterparties not being able to meet their obligations is low. Historically, Småkraft’s credit losses have been limited.

All of Småkraft’s main counterparties with regards to revenue settlement and hedging activities are rated as Investment Grade by well-known rating agencies within the 12 months.

###### Liquidity risk

Liquidity risk is the risk that Småkraft will not be able to meet its financial obligations as they fall due. The company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Småkraft’s reputation.

The table below shows the maturity structure of the Company’s financial liabilities:

31.12.2024 |  |  |  |  |  |
|  | Cash flows including interest |
Amounts in EUR thousand | Carrying amount | 1 year | 2 years | 3 years | 4 years | >5 years
--- | --- | --- | --- | --- | --- | ---
Borrowings | 281,750 | 15,350 | 64,524 | 157,080 | 77,554 | 0
Accounts payable | 650 | 650 |  |  |  |
Derivatives | 6,156 | 6,156 |  |  |  |
Other current liabilities | 5,440 | 5,440 |  |  |  |
Total | 293,996 | 27,597 | 64,524 | 157,080 | 77,554 | 0
31.12.2023 |  |  |  |  |  |
|  | Cash flows including interest |
Amounts in EUR thousand | Carrying amount | 1 year | 2 years | 3 years | 4 years | >5 years
Borrowings | 255,424 | 157,658 | 4,219 | 53,547 | 3,281 | 52,515
Accounts payable | 1,700 | 1,700 |  |  |  |
Derivatives | 28,468 | 19,944 | 8,094 | 430 |  |
Other current liabilities | 5,830 | 5,830 |  |  |  |
Total | 291,422 | 185,131 | 12,313 | 53,977 | 3,281 | 52,515

#### Note 8 Power revenues and other income

Sale of electric energy
The revenues originate from the generation of hydropower.

Guarantees of Origin and EL certificate schemes are market-based support schemes. In this system, producers of renewable electricity receive one certificate per MWh of electricity they produce for a period of up to 15 years.

Disaggregation of revenues by price area

Amounts in EUR thousand |  | 2024 | 2023
Price area NO1 | Norway | 1,440 | 1,730
Price area NO2 | Norway | 9,210 | 12,904
Price area NO3 | Norway | 3,706 | 3,806
Price area NO4 | Norway | 2,437 | 1,786
Price area NO5 | Norway | 5,650 | 7,840
Other green revenue |  | 1,044 | 2,326
Power revenues |  | 23,487 | 30,392

###### Other income

Guarantees of origin

Introduced with the EU’s first Renewable Energy Directive (Directive 2001/77/EC) in 2001, Guarantees of Origin are defined as a labelling scheme for electricity to show the electricity customer that a quantity of power has been produced from a specified energy source. All power producers can receive guarantees of origin corresponding to their power production. A guarantee of origin corresponds to 1 MWh of electricity produced.

Guarantees of Origin not yet delivered to customers are presented as inventory. Changes in inventory related to origin guarantees are presented below in the note.

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Guarantees of origin – change in inventory | -206 | 485
Other operating income | 152 | 37
Other operating income | -54 | 522

#### Note 9 Payroll and related costs

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Wages and salaries | 3,218 | 3,247
Payroll tax | 576 | 651
Pension costs | 336 | 405
Other benefits | 42 | 128
Sum | 4,172 | 4,430
Number of full-time employees | 31 | 30

Compensation to the Group Leadership Team

Amounts in EUR thousand |  |  |  |  |  |
Executive | Position, period | Year | Salaries | Pensions | Other Benefits | Total Compensation
--- | --- | --- | --- | --- | --- | ---
Terje Vedeler | CEO | 2024 | 215 | 15 | 5 | 235
|  | 2023 | 320 | 14 | 6 | 341
Pia Christine Helland | CFO, from 16.08.24 | 2024 | 110 | 6 | 1 | 117
|  | 2023 |  |  |  |
David Inge Tveito | COO | 2024 | 148 | 15 | 7 | 170
|  | 2023 | 169 | 14 | 10 | 192
Bjarte Skår | CCO | 2024 | 149 | 15 | 11 | 175
|  | 2023 | 130 | 14 | 13 | 157
Erik Sterud | CFO, to 15.08.24 | 2024 | 98 | 10 | 1 | 110
|  | 2023 | 211 | 15 | 3 | 229

###### Pension

Småkraft has an established pension scheme that is classified as a defined contribution plan. The pension scheme is in line with the requirements of the law. Contributions to the defined contribution schemes are recognized in the consolidated statement of profit and loss in the period in which the contribution amounts are earned by the employees. The defined contributions plan does not commit Småkraft beyond the amounts contributed.

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Statutory audit | 422 | 368
Tax counselling | - | 66
Other assurance services | 21 | 0
Other services | - | -
Sum | 443 | 433

#### Note 10 Other operating expenses

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Water rights costs* | 1,471 | -415
El-certs costs | 0 | -
Transmission costs | 1,350 | 1,363
Property tax and licence fees | 1,134 | 1,167
Telecommunications | 55 | 51
Rent and related expenses | 245 | 287
Transport | 76 | 67
Purchase of various services | 2,389 | 2,767
IT expenses | 710 | 592
Repair/maintenance regarding equipment, machines etc. | 427 | 360
Consultant services | 1,355 | 967
Other operating expenses | 1,748 | 1,482
Other operating expenses | 10,960 | 8,686
*See also note 23.

Purchase of various services consists of external accounting, audit, legal, transactions and operational services.

#### Note 11 Financial items

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Income from subsidiaries | 2,194 | 32,843
Interest income | 4,004 | 2,646
Other financial income | 0 | 1,325
Total | 6,198 | 36,814

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Interest expense | 11,953 | 5,950
Other financial expenses | 891 | 968
Total | 12,844 | 6,917

#### Note 12 Taxes

Differences not affecting deferred tax relates to goodwill in connection with former acquisitions and subsequent mergers with Småkraft AS.

Deferred tax benefit is recognised as Småkraft expects to come in tax position over the next years.

Reconciliation of nominal tax rate and effective tax rate |  |
Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Profit/(loss) before tax | -4,838 | 73,061
Tax rate, percent | 22% | 22%
Expected tax expense (income) | -1,064 | 16,073
Effect on taxes of |  |
Permanent differences | -107 | -2,361
Changes related to deferred tax on off-balance sheet items | -26 | -
Tax expense (income) | -1,198 | 13,712
Effective tax rate | 25% | 19%
Taxes payable in the balance sheet |  |
Amounts in EUR thousand | 31.12.2024 | 31.12.2023
Taxes payable in the balance sheet | - | -

Specification of temporary differences and deferred tax |  |
Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Fixed assets | 5,981 | 8,082
Current assets/current liabilities | - | -1,702
Interest deduction carry forward | -1,353 | -1,298
Unrealized derivatives | -1,026 | -23,771
Profit and loss account | -314 | -440
Other differences | -22 |
Temporary differences | 3,267 | -19,129
Losses carried forward | -99,647 | -76,375
Differences not affecting deferred tax* | -2,085 | -2,188
Basis for deferred tax | -98,465 | -97,692
Net deferred tax assets (-)/liability (+) in the balance sheet, ordinary tax | -21,662 | -21,492
Off-balance sheet deferred tax benefits | - | -
Deferred tax (assets) | -21,662 | -21,492
*Deferred taxes are not recognised for temporary differences that arise on initial recognition assets acquired
in a transaction which is not a business combination.
Deferred tax assets are capitalized due to surplus values related to the powerplants.
Presentation |  |
Deferred tax assets | -21,662 | -21,492
Deferred tax liabilities |  | -
Net | -21,662 | -21,492

#### Note 13 Derivatives

This note provides information about the company’s financial instruments:

###### Derivatives

The Company has derivatives related to the hedging of income from future power production, as well as interest rate swaps in connection with interest bearing debt.

For the period 2025-2026, Småkraft AS has hedged part of the estimated production against price fluctuations. Fair value calculations are based on available year end market prices, and future price curve estimates in cases where there are no official closing prices.

The Company has entered financial currency swaps from EUR to NOK. The Company has entered these contracts to make sure that the future capital increases in EUR will fully cover future acquisitions in NOK.

The Company does not apply hedge accounting for contracts for power hedging or for currency swaps, meaning that unrealised changes in value are recognised through the profit or loss and presented on the line ’Other operating revenue’ and financial income/expenses respectively.

The table below shows the financial position and profit and loss accounts for the derivatives:

31.12.2024 |  |  |  |
Amounts in EUR thousand | Energy derivatives | Interest rate swaps | Currency derivatives | Total
--- | --- | --- | --- | ---
Opening balance (net) 31.12.2023 | -24,869 | 3,099 | -2,570 | -24,340
Additions/sale | -343 | 0 | 0 | -343
Fair value changes | 18,185 | -2,183 | -1,203 | 14,799
Cash settlement | 7,252 | 0 | 0 | 7,252
Currency translation differences | 813 | -115 | 138 | 836
Sum | 1,038 | 801 | -3,635 | -1,795
Classification |  |  |  |
Non-current asset | 2,214 | 781 | 0 | 2,995
Current Asset | 1,346 | 20 | 0 | 1,367
Total asset | 3,560 | 801 | 0 | 4,361
Non-current liabilities | 0 | 0 | 30 | 30
Current liabilities | 2,522 | 0 | 3,604 | 6,126
Total liability | 2,522 | 0 | 3,635 | 6,156

31.12.2023 |  |  |  |
Amounts in EUR thousand | Energy derivatives | Interest rate swaps | Currency derivatives | Total
--- | --- | --- | --- | ---
Opening balance (net) 31.12.2022 | -104,451 | 8,096 | -1,115 | -97,470
Additions/sale | -1,452 | 0 | 0 | -1,452
Fair value changes | 55,857 | -4,403 | -1,503 | 49,950
Cash settlement | 17,277 | 0 | 0 | 17,277
Currency translation differences | 7,901 | -594 | 48 | 7,355
Sum | -24,869 | 3,099 | -2,570 | -24,340
Classification |  |  |  |
Non-current asset | 0 | 0 | 0 | 0
Current Asset | 1,029 | 3,099 | 0 | 4,128
Total asset | 1,029 | 3,099 | 0 | 4,128
Non-current liabilities | 8,241 | 0 | 283 | 8,524
Current liabilities | 17,657 | 0 | 2,287 | 19,944
Total liability | 25,898 | 0 | 2,570 | 28,468

All the derivatives are valued at fair value at level 2 in accordance to the fair value hierarchy: “Fair value is based on data inputs other than quoted prices included in Level 1, which are observable for the asset, either directly or indirectly”

#### Note 14 Intangible assets

Amounts in EUR thousand | Waterfall right Time-unlimited | Waterfall rights Time-limited* | Total
--- | --- | --- | ---
Cost at 1 January 2023 | 4,094 | 16,493 | 20,587
Additions | - | 4,179 | 4,179
Merger | 379 |  | 379
Currency translation | -288 | -999 | -1,288
Cost at 31 December 2023 | 4,186 | 19,673 | 23,857
Reallocation | -379 | 379 | -
Additions | - | 585 | 585
Currency translation | -197 | -832 | -1,028
Cost at 31 December 2024 | 3,610 | 19,805 | 23,414
Acc. deprecations at 1 Jan. 2023 | - | -1,525 | -1,525
Amortisation charge | - | -548 | -548
Currency translation | - | 90 | 90
Acc. depreciations at 31 Dec. 2023 | - | -1,983 | -1,983
Amortisation charge | - | -371 | -371
Currency translation | 5 | -8 | -3
Acc. depreciations at 31 Dec. 2024 | 5 | -2,362 | -2,358
Balance at 1 January 2023 | 4,094 | 14,968 | 19,063
Balance at 31 December 2023 | 4,185 | 17,690 | 21,875
Balance at 31 December 2024 | 3,615 | 17,443 | 21,057

*Waterfall rights time-limited includes rights acquired as part of the acquisition of power plants and goodwill. Goodwill is as of 31 December 2024 EUR 2,316 thousand. The company’s goodwill arose from historical acquisitions of power plant companies and arose because deferred tax was valued at nominal amounts whereas discounted amounts were reflected in the purchase amount. The difference between deferred tax valued at nominal and discounted amounts was recognised as goodwill.

#### Note 15 Impairment testing

Goodwill and intangible asset with an indefinite useful life are not subject to amortisation and is tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired.

Non-financial assets are allocated to cash-generating units for the purpose of impairment testing. Each CGU being the physical power plant installation and the associated water right lease agreement in the same connected water system. As of year-end management has performed an impairment test for all CGU’s and found that the recoverable amount is higher than the carrying amount.

The recoverable amount has been estimated using the Discounted Cash Flow (DCF) method. The enterprise value (EV) for each CGU is calculated as the sum of the present values of future cash flows that a business can be expected to generate over its useful life, discounted by a weighted average cost of capital (WACC).

The most important assumptions behind the valuation are the following:

###### Power production

- Total yearly production for all power plants with no future increases per plant. All plants are fully operational.
- Production values based on estimates, which rely on historical production values to the extent possible and otherwise estimates in hydrological reports.
- Normalized yearly production is estimated based on a 30-year average of historical production for as many available years as possible and technical due diligence assumptions.

###### Power price

- Future power prices are computed using the following methodology. The first year is based on Nasdaq forward prices, and from year 2 onwards an average of three different power price curves from power market analysts (SKM, Volue Insight, and Thema) is applied.
- A capture rate that reflects the discount to the market price the specific power station achieves because of its production profile. Normally, an average capture rate is used on a portfolio of power stations.

###### Operational expenses include five main items:

- Grid fee
- Property tax
- Landowner compensation
- O&M
- Overhead costs

###### Cost of capital

- Weighted Average Cost of Capital (WACC) for the current valuation is 6.6% compared to 6.3% used in the valuation last year.

###### Climate risk

Småkraft’s operations are largely dependent on precipitation, and changes in precipitation patterns may affect both our production and the price picture in the power market. Climate change is unpredictable and different scenarios will affect Småkraft’s production. Colder winters and dry summers may negatively affect Småkraft’s production, while milder winters and wetter summers may have a positive impact on Småkraft’s production. Climate change may also lead to more extreme precipitation and/or snowmelt, which may increase water loss over Småkraft’s dams. Climate change, as we are experiencing today, is moving in the direction of milder winters and wetter summers, resulting in increased production from our power plants. Climate risk is discussed in detail in Småkraft’s Sustainability Report and is considered not to have a significant impact on the impairment test.

#### Note 16 Property, plant and equipment

Amounts in EUR thousand | Power plants | Inlet and waterway | Infra-structure | Other | Plant under construction | Total
--- | --- | --- | --- | --- | --- | ---
Cost at 1 January 2023 | 113,667 | 104,667 | 50,940 | 3,545 | 2,653 | 275,473
Additions, purchased, reallocations | 2,816 | 435 | 159 | 360 | 3,465 | 7,233
Effect of currency movements | -7,303 | -6,760 | -3,291 | -223 | -116 | -17,693
Cost at 31 December 2023 | 109,179 | 98,342 | 47,808 | 3,681 | 6,002 | 265,013
Additions, purchased, reallocations | 429 | 1,061 | 12 | 914 | 997 | 3,412
Acquisition of subsidiaries |  |  |  |  |  | -
Effect of currency movements | -3,569 | -3,503 | -1,602 | -74 | -267 | -9,015
Cost at 31 December 2024 | 106,040 | 95,900 | 46,217 | 4,520 | 6,732 | 259,410
Acc. depreciations at 1 January 2023 | -33,510 | -24,410 | -14,009 | -1,940 | -759 | -74,628
Depreciation charge | -3,365 | -2,290 | -1,191 | -481 | - | -7,327
Effect of currency movements | 3,603 | 2,872 | 1,472 | 320 | 429 | 8,696
Acc. deprecations at 31 Dec. 2023 | -33,272 | -23,828 | -13,729 | -2,101 | -330 | -73,259
Depreciation charge | -3,290 | -2,266 | -1,171 | -522 | - | -7,249
Impairment charge |  |  |  |  | -495 | -495
Effect of currency movements | 41 | 17 | 16 | -6 | -7 | 61
Acc. deprecations at 31 Dec. 2024 | -36,522 | -26,078 | -14,883 | -2,628 | -832 | -80,942
Balance at 1 January 2023 | 81,750 | 81,679 | 37,556 | 1,821 | 2,301 | 205,108
Balance at 31 December 2023 | 75,907 | 74,513 | 34,079 | 1,581 | 5,672 | 191,753
Balance at 31 December 2024 | 69,518 | 69,822 | 31,335 | 1,893 | 5,900 | 178,467
Acc. impairment charge at 31 Dec. 2024 | -879 | -353 | - | - | -495 | -1,727
Depreciation method | Straight-line | Straight-line | Straight-line | Straight-line |  |
Percentage | 1,2-20% | 1,25 - 2,5% | 1,25 - 2,85% | 12,5-20% |  |
Economic life | 5 ‑ 75 | 40 - 80 | 35 - 80 | 5 ‑ 8 |  |

Leased assets have been included as Other, with a net book value at 31 December 2024 of EUR 254 thousand.

#### Note 17 Investments, recognized under the equity method

| Date of aquisition | Registered office | Ownership share | Voting rights
Luster Småkraft AS | 2005 | Gaupne | 50% | 50%
Proxima Hydrotech AS | 2021 | Seimsfoss | 33% | 33%
Småvirkjanir EHF | 2022 | Reykjavik | 50% | 50%
Gjerdelva Kraft AS | 2022 | Dale | 50% | 50%
Rullestad & Skromme Energi AS | 2006/2024 | Etne | 50% | 50%
Kraftanmelding AS * | 2024 | Skien | 7.89% | 7.89%

*) Investment in Kraftanmelding AS is not recognized under equity method.

Småkraft AS owns 50% of Luster Småkraft AS. The remaining 50% is owned by Luster Energi AS. The company successfully operates 3 small-scale hydro power plants: Kvåle, Holen and Vanndøla. Combined they have a normalized annual production of about 50 GWh.

Småkraft AS owns 33% in Proxima HydroTech AS which is an independent service provider within operations and maintenance services. The company is focusing on services to hydropower plants and is developing relevant surveillance IT systems for the likes of Småkraft power plants.

Småkraft AS entered 23 December 2022 into a Sale and Purchase Agreement for 50% of the shares in Gjerdelva Kraft AS. Agreed remuneration for the shares is equivalent to EUR 22 thousand – payment of this amount will take place after construction of the power plant under construction have been finalized.

#### Note 18 Receivables; amounts due after more than one year

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Loans to associates:
Loans to associates - R&S Energi AS | 2,649 | 0
Other receivables:
Deposit rent | 101 | 102
Prepaid water right lease | 5,817 | 5,958
Other long term receivables | 1,101 | 1,081
Loan to subsidiaries | 49,297 | 46,375
Total | 58,965 | 53,517

#### Note 19 Cash and cash equivalents

Bank deposits, cash etc. does not include restricted tax deduction funds as of 31.12.2024. The company has established a bank guarantee for the payment of tax.

#### Note 20 Share capital and shareholder information

| No. of shares* | Share capital*
Amounts in EUR thousand | 2024 | 2023 | 2024 | 2023
--- | --- | --- | --- | ---
Ordinary shares
Issued and fully paid 1 January | 5,181,032 | 4,807,092 | 23,046 | 22,861
Issued new share capital | 220,601 | 373,940 | 953 | 1,669
Currency presentation effect |  |  | -1,101 | -1,483
31 December | 5,401,633 | 5,181,032 | 22,898 | 23,046
* Number of shares not registred are 35 684 (2023: 81 635) and share capital TEUR 151 (2023:TEUR 363).
Ownership structure 31.12.2024* | No. of shares | Nominal amount NOK | Voting share | Ownership share
Aquila GAM Fund GmbH & Co. Geschlossene Investmentkommanditgessellschaft | 785,744 | 50 | 14.5 % | 14.5 %
Aquila Capital Europeean Hydropower Fund S.A. | 1,155,487 | 50 | 21.3 % | 21.3 %
ACEH Norway 1 B.V. | 2,132,544 | 50 | 39.2 % | 39.2 %
ACEH Norway 2 B.V. | 1,279,432 | 50 | 23.5 % | 23.5 %
ACEH Smakraft Amaranthine C.V. | 84,110 | 50 | 1.5 % | 1.5 %
Sum | 5,437,317 | 50 | 100% | 100%
*Includes not registred capital increase
Dividend
Amounts in EUR thousand |  |  | 12/31/2024 | 12/31/2023
Ordinary dividends |  |  | 15,000 | 37,192
Sum |  |  | 15,000 | 37,192

*Includes not registered capital increase.

#### Note 21 Borrowings and guarantees

Amounts in EUR thousand |  |  |
Lenders | Currency | 31.12.2024 | 31.12.2023
--- | --- | --- | ---
Banks | NOK | - | 150,000
Banks | EUR | 158,000 | 2,669
Convertible debt from owners* | EUR | - | 3,659
Green Bond 3 | EUR | 74,500 | 50,000
Green Bond 2 | EUR | 50,000 | 50,000
Other debt | NOK | 20 | 21
Capitalised loan expenses/ fees/ commissions | NOK | -770 | -924
Total |  | 281,750 | 255,425
Amounts in EUR thousand |  | 31.12.2024 | 31.12.2023
Long term debt |  | 277,750 | 99,097
Convertible debt from owners |  | - | 3,659
Short term debt |  | 4,000 | 152,669
Total |  | 281,750 | 255,425

*Convertible loan from shareholders will be converted to share capital within following quarter in accordance with loan agreement.

Changes in debt to financial institutions and bond debt during the year

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Ingoing balance | 255,425 | 273,503
Ingoing balance merged company |  | 14,602
Repayments/ downpayments: | -14,658 | -87,810
New debt | 41,118 | 54,426
Net capitalized transactions costs related to borrowings | -458 | -
Capitalised loan expenses/ fees/ commissions | 570 | -
Currency exchange rate changes | -248 | 703
Outgoing balance | 281,750 | 255,425

Secured borrowings etc.

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Borrowings from financial institutions and bondholders | 282,500 | 252,669
Agent commission | -770 | -924
Total | 281,730 | 251,745

Carrying amount of pledged assets

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Operating equipment | 1,638 | 1,142
Accounts receivable | 1,635 | 1,240
Power plants and related water lease agreements | 180,549 | 194,350
Total | 183,822 | 196,731

The bank and bond holders have pledged security in operating equipment, bank accounts and accounts receivables, in addition to 1. priority pledge in the power plants and related water lease agreements.

The bank has pledged security in the shares in Småkraft AS and Småkraft AS’ shares in Reinli Kraft AS. Småkraft AS has provided a bank guarantee as security for the payment of withholding tax.

According to the shareholders agreement with Luster Småkraft AS, Småkraft AS is obligated to make capital available to Luster Småkraft AS.

See note 6 for information on debt covenants and note 7 for maturity structure of the Company’s borrowings.

#### Note 22 Concessions

As of 31.12.2024, Småkraft AS has concessions for additional 8 power plants with a total annual production of approximately 153 GWh. In addition to this, Småkraft AS was at 31 December 2024 responsible for the construction of 21 power stations under construction representing an annual production of 289 GWh both owned by subsidiaries in the group and companies signed to be acquired.

#### Note 23 Water and lease agreements

As part of several of the net agreements, Småkraft offers interest bearing loans and/ or minimum payments in the first years of the land lease agreements. Net agreements typically have deficits the first years. Småkraft offers interest bearing loans/ minimum payments to offer more stable payouts to the landowners, while simultaneously not amending the balance in the land lease agreement between landowner and company.

The loans are normally interest-bearing loans. The minimum payments are interest bearing payments to the landowners that will be offset against future land lease profits.

Loans from Småkraft to landowners

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Loans to landowners | 830 | 795
Minimum payments to landowners | 4,987 | 5,163
Total | 5,817 | 5,958
Amounts in EUR thousand | 31.12.2024 | 31.12.2023
Receivables towards landowners, off balance | 27,305 | 23,508
Total | 27,305 | 23,508

When net-agreements have deficit, Småkraft AS finances the landowner share of the deficit. Småkraft AS accrues a receivable against the landowners, against which future profits will offset. This is a contingent asset to Småkraft, that according to IFRS is off balance. It represents a future benefit for the company contingent on future profits from the power plant.

Water rights cost

Amounts in EUR thousand | 31.12.2024 | 31.12.2023
--- | --- | ---
Gros | 749 | -2,198
Net | 665 | 1,607
Fixed | 87 | 100
Settlements | -30 | 76
Total | 1,471 | -415
The table shows the different water lease agreements with the landowners.

#### Note 24 Related party transaction and balance items

Småkraft and its subsidiaries and associates have seeked to do transactions on commercial terms. These are shown in the table below.

Amounts in EUR thousand |  | 2024 |
Counterpart | Sale | Purchase | Interest income
--- | --- | --- | ---
Subsidiaries
Norway | 2,398 | - | 2,015
Sweden | - | - | 769
Associated companies | 19 | 23 | 150
Sum | 2,417 | 23 | 2,934
Amounts in EUR thousand |  | 31.12.2024 |
Counterpart | Short term receivables | Long term receivables | Payables
Subsidiaries
Norway | 74 | 37,866 | 95
Sweden | - | 11,432 | -
Associated companies | - | 2,649 | 15
Sum | 74 | 51,946 | 109

Amounts in EUR thousand |  | 2023 |
Counterpart | Sale | Purchase | Interest income
--- | --- | --- | ---
Subsidiaries
Norway | 1,998 |  | 1,491
Sweden |  |  | 85
Associated companies | 8 | 181 |
Sum | 2,006 | 181 | 1,576
Amounts in EUR thousand |  | 31.12.2023 |
Counterpart | Short term receivables | Long term receivables | Payables
Subsidiaries
Norway | 523 | 31,415 | -
Sweden | 86 | 14,960 | 278
Associated companies | - | 222 | 59
Sum | 609 | 46,597 | 337

Associated companies are listed in note 17. The individuals stated in note 5 are also related parties of Småkraft AS. Apart from the transactions specified in this note and note 5, there are no significant related party transactions or balance items.

### Alternative Performance Measures

Adjusted Power revenues is defined as Power revenues adjusted for Realised value change on energy derivatives. Småkraft uses this APM to visualize cash flow generated from power sales over time.

EBITDA is defined as operating profit (-loss) + depreciation of fixed assets and intangible assets + impairment of fixed assets and intangible assets. This APM is widely used by analysts comparing Norwegian Hydropower companies.

Småkraft uses this APM to visualize performance over time irrespective of price.

Adjusted EBITDA is defined as operating profit (-loss) + depreciation of fixed assets and intangible assets + impairment of fixed assets and intangible assets – unrealised value change on energy derivatives. Småkraft uses this APM to measure performance from operational activities. Unrealised value on energy derivatives is deducted in the adjusted figures as the value change on these derivatives usually be negatively correlated to value changes in future power production that is not recognised, thus creating an accounting mismatch that is not alleviated through hedge accounting. Adjusted EBITDA should not be considered as an alternative to operating profit/loss and profit/loss before tax as an indicator of the company’s operations in accordance with generally accepted accounting principles. Nor is adjusted EBITDA underlying an alternative to cash flow from operating activities in accordance with generally accepted accounting principles.

Amounts in EUR thousand | 2024 | 2023
--- | --- | ---
Power revenue | 23,487 | 30,392
Realized value change on energy derivatives | -7,252 | -17,277
Adjusted power revenue | 16,235 | 13,117
Amounts in EUR thousand | 2024 | 2023
Operating profit (loss) | 18,370 | 65,780
Depreciation, amortization, impairment | 8,116 | 7,875
EBITDA | 26,486 | 73,655
Change in unrealized value change on energy derivatives | -25,437 | -73,133
Adjusted EBITDA | 1,048 | 521

## Independent auditor’s report

Småkraft AS
Postboks 2389, Solheimsviken
5824 Bergen

firmapost@smaakraft.nofirmapost@smaakraft.no
www.smaakraft.no

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