Annual Report 2025

The functional currency of the companies in the Group is determined based on the nature of the primary economic environment in which the company operates. The functional currency of the parent company Magnora ASA and the presentation currency of the Group is Norwegian Krone (NOK).

Foreign currency transactions are translated into the functional currency at the prevailing exchange rate on the transaction date. Monetary balance sheet items denominated in foreign currencies are retranslated at the functional currency rate of exchange at the balance sheet date. All differences are taken to profit or loss with the exception of net investments in foreign operations, where currency differences are taken to other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.

In preparing the consolidated financial statements, the financial statements of foreign subsidiaries and associates are translated into NOK using the current exchange rate method. Balance sheet items are translated at the exchange rate on the reporting date, while income and expenses are translated at the average exchange rate for the period. Currency translation differences are recognised in other comprehensive income and reclassified to profit or loss when the foreign operation is disposed of or control is lost.

The main types of cash flows are those related to the ongoing development of projects.

Cash flows from acquisitions and disposals of shareholdings include the cash and cash equivalents of the investee at the transaction date. These cash flows are presented on a net basis together with the cash consideration paid or received. Cash received from loan repayments related to share sale agreements, following the divestment of entities, is also included within cash flows from business divestments under investing activities.

Cash flows relating to the repayment of lease liabilities, including both principal and interest, are presented under financing activities.

The ScotWind lease option obtained from The Crown Estate Scotland is recognised as an intangible asset in the statement of financial position. The agreement grants Magnora exclusive rights to conduct environmental studies in the awarded area. The land lease will commence once the conditions in the option agreement, including key project consents, are fulfilled. Amortisation of the intangible asset will begin upon commencement of the lease and continue over the lease term.

The carrying value of the ScotWind lease option is subject to estimation uncertainty and impairment assessment. The recoverable amount depends on assumptions such as energy price forecasts, discount rates, project cost estimates, and regulatory developments. Management applies judgement in assessing these factors, using available market data and long-term forecasts.

Contingent consideration, including holdbacks and earnouts from project divestments, is measured at fair value based on the expected future milestone payments. The valuation reflects factors such as project progress, achievement of milestones, and relevant economic conditions. Determining fair value involves judgement regarding the likelihood of future payments, and estimates are reviewed and adjusted as necessary. As a significant portion of consideration from divestments may depend on future project milestones, management applies a conservative approach in assessing and recognising contingent amounts. See Note 4 Divestments for further details.

The Group holds investments in several portfolio companies and assesses each quarter whether it has control or significant influence in accordance with IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures.

Hafslund Magnora Sol AS was established in October 2022 together with Hafslund Vekst AS and Helios Nordic Energy AB. Magnora holds 40 per cent of the shares and two of six board seats, while the remaining four seats are held by the other shareholders. As Magnora does not have control or operational influence beyond its board participation, the investment is accounted for using the equity method and classified as an associate.

Magnora invested in Kustvind AB in March 2020 and holds 48 per cent of the shares at the reporting date. Magnora has the right to increase its ownership to 50 per cent, subject to project milestones and approval by the Kustvind board through a capital call. The remaining shares are held equally by the three founders. Magnora currently appoints three of five board members, while the founders appoint two. Other shareholders have the right to appoint an additional board member, which is expected to occur. Magnora is a minority owner alongside three other owners and has significant influence of the company. As Magnora does not have control but has significant influence, Kustvind AB is accounted for using the equity method and classified as an associate.

As part of the acquisition of Storespeed AS, the Group recognised property, plant and equipment related to data center infrastructure and equipment, which had not been valued in Storespeed’s financial statements prior to the acquisition.

Management determined fair value using a replacement cost approach, involving judgement over current replacement prices, technical condition, and remaining useful lives. Market data for comparable assets was considered, and management applied judgement in estimating replacement costs, technical condition, and useful lives. These estimates influence the fair value recognised at acquisition and subsequent depreciation.

In the second quarter of 2025, the Group sold its 30 per cent ownership interest in Hermana Holding ASA, previously accounted for as an associate under the equity method. The transaction generated cash proceeds of NOK 39.9 million and resulted in a net gain of NOK 8.6 million after deducting the carrying amount of the investment, recognised in other income. Following the sale, the Group no longer holds any interest in Hermana Holding ASA.

In January 2025, financial close was completed for the divestment of two solar projects in South Africa, resulting in a net gain of NOK 6.6 million recognised in other income. In addition, milestone-related contingent consideration had a net positive impact of NOK 6.7 million. This reflects a final milestone payment of NOK 11.0 million from the Red Sands project, partly offset by a fair value adjustment and contingent income previously recognised of net NOK 4.2 million related to fair value adjustment and contingent income previously recognised, based on updated assessments of certain project outcomes.

Of this:

Grant income relates to structured funding supporting renewable energy development activities in emerging markets and is recognised in accordance with IAS 20, as recognition criteria were met during the year.

Following a restructuring in 2024, 70% of the shares in Hermana ASA, were demerged from Magnora ASA to its existing shareholders of Magnora ASA on 17 June 2024. This completed the carve-out of the legacy business into Hermana Holding ASA, which commenced trading on Oslo Stock Exchange 18 June 2024. After the demerger, Magnora held 30% of the shares in Hermana Holding ASA, and this ownership at year end 2024 was accounted for using the equity method, with the investment recognised as an associate company.

The demerger was accounted for in accordance with IFRIC 17 Distribution of Non-cash Assets to Owners. The liability to distribute non-cash assets was recognised as a dividend to the Group’s owners. Upon settlement of the dividend payable, the Group recorded the difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable in profit or loss. The total distribution amounted to NOK 398.9 million, less the carrying value of the investment distributed of NOK 87.3 million, resulting in a gain of NOK 311.6 million. The distribution of 70% of Hermana Holding ASA to Magnora ASA shareholders, was recognised as a dividend in the statement of equity. The distribution consisted of shares and had no cash effect, except for NOK 23.4 million in cash belonging to the subsidiaries that were distributed.

After the demerger, the revenues and expenses related to the licensing agreement associated with the Western Isles FPSO are no longer included in the financial statements of Magnora ASA. As the licensing business represents a separate major line of business for the Magnora Group, this divestment was presented as discontinued operations at the end of 2024.

In the second quarter of 2025, the Group sold its 30 per cent ownership interest in Hermana Holding ASA, previously accounted for as an associate under the equity method. The transaction generated cash proceeds of NOK 39.9 million and resulted in a net gain of NOK 8.6 million after deducting the carrying amount of the investment, recognised in other income. Following the sale, the Group no longer holds any interest in Hermana Holding ASA.

The results from discontinued operations for FY 2024 are shown as follows:

The Group’s business model involves developing and divesting renewable energy and data center projects. The value achieved on project divestments and portfolio exits is influenced by prevailing and expected future power prices, as these affect project returns and buyer demand. A sustained decline in power prices could reduce project attractiveness and internal rates of return.

The Group’s exposure to physical climate risk remains limited. Other than IT and office equipment, wind measurement masts in South Africa, and the recently acquired data center facility in Halden, Norway, the Group holds few tangible assets. The Halden facility is designed and operated to modern energy-efficiency standards, and critical infrastructure is insured.

Climate change and related policy developments may influence renewable energy priorities, permitting frameworks, and project economics across the Group’s markets. At the same time, increased climate action and the transition toward low-carbon solutions are expected to enhance the attractiveness of renewable energy and sustainable data center investments, improving access to capital and potentially lowering financing costs.

Overall, the Group considers its exposure to climate-related financial risk to be low, supported by its diversified portfolio across geographies and technologies.

The Group has minimal exposure to interest rate fluctuations, as external borrowings at year-end were limited. Any changes in market rates are not expected to have a material impact on the Group’s financial results. No hedging arrangements are currently in place.

The Group operates internationally and is exposed to foreign exchange risk arising from fluctuations in exchange rates between its functional currency (NOK) and other currencies. The exposure mainly relates to foreign currency cash balances, investments, revenues, and operating expenses.

The Group has subsidiaries and operations located in Norway, Sweden, Scotland, England, Italy, Germany and South Africa. Changes in exchange rates for SEK, GBP, EUR and ZAR relative to NOK may impact the Group’s financial results through revaluation of monetary items and translation of foreign operations.

Foreign currency exposure arises mainly from revenues, expenses, and milestone payments denominated in USD and EUR. With the expansion of renewable and data center activities across several markets, the currency mix has become more diversified as illustrated in the table below.

The Group manages its foreign exchange risk by maintaining deposits in local currencies and regularly monitoring the exposures. Where considered appropriate, the Group may implement hedging strategies to reduce the impact of material fluctuations. The Group did not use derivative financial instruments during the year and had no designated hedge accounting relationships at the reporting date.

The table below illustrates the potential impact on profit before tax, cash and cash equivalents and debt:

The Group manages liquidity risk by maintaining sufficient cash reserves to meet operational obligations and fund future investments. Cash flow forecasts are updated regularly to reflect changes in key assumptions, such as project payment schedules and milestone receipts, enabling proactive management of liquidity requirements.

The Group’s cash inflows are primarily generated from the sale of portfolio companies and projects, as well as dividends and returns from subsidiaries and associates. While negative cash flows from portfolio companies could affect liquidity, the exposure is limited to the Group’s invested capital. Magnora mitigates this risk through active governance and oversight of its portfolio investments.

At the reporting date, the Group had financial liabilities of NOK 73.4 million and maintained a strong liquidity position, with cash and cash equivalents of NOK 166.4 million. Other current payables consist of the TFMC license fee portion and additional financing agreement established in 2023 (owed to TFMC by Magnora Offshore Wind AS). The original loan agreements were extended with an amendment with no repayment terms.

The following table below shows the maturity for nominal cash flows for the contractual obligations as of 31 December 2025:

As of 31 December 2024:

Credit risk primarily arises from cash and cash equivalents, deposits with financial institutions, and receivables from customers, partners, and project counterparties. The Group maintains its main banking relationship with a financial institution rated Aa–.

The Group’s counterparties mainly comprise renewable energy companies, infrastructure investors, utilities, and technology partners with solid financial standing. However, there remains a risk that a counterparty may experience financial difficulties, which could adversely affect the Group’s financial position or cash flows.

Credit exposures are monitored on an ongoing basis, and risk management procedures are in place to mitigate potential losses and ensure financial stability.

The Group’s financial assets mainly comprise trade receivables, milestone receivables, other current financial assets, and cash and cash equivalents.

Trade receivables and other current financial assets are classified and measured at amortised cost, as they are held to collect contractual cash flows that represent payments of principal and interest. Interest income is recognised in finance income using the effective interest method. For trade receivables, the Group applies the simplified expected credit loss model in IFRS 9, recognising lifetime expected losses in profit or loss.

Milestone receivables and other contingent consideration assets arising from project divestments are classified as financial assets at fair value through profit or loss (FVTPL), in accordance with IFRS 9, since their contractual cash flows depend on project milestones and do not meet the SPPI test. Changes in fair value are recognised in other income or expense in the statement of profit or loss.

Cash and cash equivalents are measured at nominal value, which approximates fair value due to their short-term maturity and high liquidity. They consist of multicurrency bank deposits denominated in actively traded foreign currencies.

The Group’s financial liabilities, including lease liabilities and other borrowings, are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Interest expense is recognised in finance costs in the statement of profit or loss. Following the acquisition of a data center business in 2025, the subsidiary’s loan, guaranteed by Innovation Norway, is measured at amortised cost in accordance with IFRS 9.

The Group does not hold or issue derivative financial instruments and does not apply hedge accounting under IFRS 9.

The Group has a total available overdraft facility of NOK 150 million. As of 31 December 2025, none of the overdraft facility has been drawn. See Note 22 Other current liabilities for covenants related to the overdraft facility.

Below is a table that shows the Group’s financial instruments with their carrying amounts recognised as of 31 December 2025:

Contingent income linked to project milestones: The fair value of contingent consideration assets related to project divestments is determined using a risk-weighted approach, reflecting management’s best estimates of milestone achievement and associated future cash flows. The valuation incorporates key factors such as project progress, contractual terms, historical performance, and relevant market conditions that may influence milestone outcomes.

As the measurement relies on significant unobservable inputs and management judgement, these valuations are classified as Level 3 within the IFRS 13 fair-value hierarchy. Fair values are reassessed at each reporting date, with any changes recognised in the statement of profit or loss.

In 2025, the Group recognised non-recurring licensing revenue related to a legacy FPSO design licence associated with the Penguins field in the UK North Sea. The payments were triggered upon achievement of contractual production milestones by the FPSO, namely “first oil” and cumulative production of four million barrels of oil equivalent.

Under the demerger receivable arrangement established in 2024, the proceeds were received by Hermana Holding ASA on behalf of the Group and settled against a corresponding receivable from Magnora ASA. Payments amounted to NOK 44.9 million in May and NOK 43.8 million in November, totalling NOK 88.7 million.

Following these milestone payments, no further royalty rights remain in respect of this FPSO.

This licensing income represented approximately 94% of total operating revenue for the year. The remaining revenue primarily comprised management service income from associates and a minor contribution from data centre operations acquired in October 2025.

Short-term employee benefits, including salaries, bonuses, social security contributions, and paid absences, are recognised as expenses when the related service is rendered by employees.

The Group operates a defined contribution pension plan in accordance with statutory requirements. Contributions are expensed as incurred, and the Group has no further obligations once payments have been made.

The Group operates a share-based payment programme for management and employees, classified as equity-settled in accordance with IFRS 2.

• Equity-settled awards are measured at fair value at the grant date using the Black–Scholes valuation model and expensed on a straight-line basis over the vesting period, adjusted for expected vesting based on non-market performance conditions.
• Net settlement: For bonus share awards, the Group withholds a portion of shares to cover employees’ statutory tax obligations and remits the corresponding amount to tax authorities. This feature does not affect the equity classification provided the withheld amount does not exceed the employee’s maximum statutory tax liability.
• Social security costs: A cash-settled liability is recognised for employer social-security contributions arising from these programmes. This liability is measured at fair value and remeasured at each reporting date until settlement.

The table below sets out the Group’s employee benefit expenses for the year, including salaries, social security tax, pensions costs, share-based payments and other benefits:

The Group’s share option scheme, approved by Annual General Meetings since 2019, provides long-term incentives to management, key employees, and board members. Options are granted regularly under the scheme, and the related cost is recognised on a straight-line basis over a 36-month vesting period.

In 2025, following the approval of the share option programme at the Annual General Meeting on 29 April 2025, the Board approved a new grant under the continuing scheme on 6 November 2025. A total of 84,071 share options were awarded to employees of Magnora ASA. Each option entitled the holder to acquire one share in Magnora ASA at an exercise price of NOK 21.89. The options vest over three years and expire five years after the vesting date.
The fair value of the 2025 grant was determined using the Black-Scholes model, applying the five-year Norwegian government bond rate as the risk-free interest rate at the grant date.
At the reporting date, a total of 1,352,071 options were outstanding, of which 835,000 were exercisable.

The following table shows the inputs to the models used for the plans for the years ended 31 December 2025 and 2024, respectively:

Below is a table showing the total shares owned or controlled by Senior Management:

Reference is made to the ’Magnora Remuneration Report 2025’ for further details of remuneration of Senior Management.

At balance sheet date, the recognition criteria in IAS 12 were met. The deferred tax asset was derecognised as there no longer are revenues expected within the next 5 years that will create taxable profits. This is assessed based upon on the Group’s contract portfolio and cost base as of today. Reference is made to Note 3 for further information.

The Group’s intangible assets primarily comprise rights and options related to renewable energy development projects. These include the ScotWind lease option, which grants Magnora exclusive rights to perform environmental studies within the designated area in Scotland, and land rights associated with project sites in South Africa. Both are recognised as intangible assets under IAS 38, as they represent contractual development rights rather than ownership of physical property.

The ScotWind lease option will be amortised over the lease term once the operational lease commences.

The South African land rights are not yet in the development phase and therefore have not been amortised.

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets acquired. Goodwill is not amortised but is tested for impairment annually or when indicators of impairment arise.

As of 31 December 2025, the Group’s intangible assets and goodwill comprise:

• ScotWind lease option fee paid (NOK 139.8 million)
• Land rights associated with projects in South Africa (NOK 2.0 million)
• Total goodwill of NOK 8.6 million recognised on the acquisition of the South African operations (NOK 8.4 million) and Storespeed AS (NOK 0.2 million).

Intangible assets and goodwill:

The ScotWind lease option, signed with The Crown Estate Scotland, represents Magnora’s exclusive right to perform environmental studies in the awarded area. Amortisation will begin once the operational lease period commences and continue over the duration of the lease.

The recoverable amount of the lease option is sensitive to several external and project-specific factors, including:

• Energy price forecasts and power purchase assumptions, which influence expected future cash flows and project profitability.
• Changes in discount rates and underlying development cost assumptions, which affect the estimated value in use.
• Regulatory or permitting developments, including changes to offshore wind licensing frameworks, grid access rules, or environmental approval processes.
• Market competition and project timing, such as competing developments that could affect project economics or delay milestones.

At 31 December 2025, no indicators of impairment were identified for the Scotwind lease option.

Goodwill recognised from the acquisition of the South African operations acquired in 2022 reflects expected synergies, market opportunities, and local development expertise supporting Magnora’s renewable energy projects in the region. Additional goodwill has been recognised following the acquisition of a Norwegian data center business, representing anticipated operational synergies, technical capabilities and growth opportunities within the Group’s data centre activities.

Both goodwill and land rights are tested for impairment using a value-in-use model based on discounted cash-flow projections reflecting expected development milestones, local energy market dynamics, and broader macroeconomic conditions in South Africa. For the Norwegian data centre business, forecasts reflect expected utilisation levels, pricing assumptions, operating cost development and market conditions in the Nordic data centre market.
Key assumptions include:

• Forecasted energy prices, demand growth, and project development timelines
• Timing of concession and permit approvals
• Expected data centre capacity utilisation, pricing development and operating cost levels

Based on current project progress and outlook in the respective markets, management concluded that the recoverable amounts of goodwill and land rights exceed their carrying amounts. Accordingly, no impairment losses were recognised in 2025.

The Group invested in Kustvind AB (Kustvind), a shallow-water offshore wind project located off the southern coast of Sweden, in March 2020. As of 31 December 2025, Magnora has a 48 percent ownership in Kustvind AB and has the option to increase its ownership to 50 percent. Magnora is a minority owner with three other owners of the project and does not have control, it accounts for this investment using the equity method, adjusting the investment’s value based on its proportional share of Kustvind’s net results for the period.

The Group invested in Hafslund Magnora Sol AS (HMS), together with Hafslund Vekst AS and Helios Nordic Energy AB, to develop large-scale solar PV farms in Norway, in October 2022. As of 31 December 2025, Magnora owns 40 percent of HMS and does not have control. The Group therefore applies the equity method to account for its investment in HMS, adjusting the investment’s value based on its share of HMS’ net results.

Following the 2024 demerger of Magnora’s legacy technology business, the Group retained a 30% ownership interest in Hermana Holding ASA, which was accounted for as an associate in accordance with IAS 28.
During 2025, the Group disposed of its entire 30% interest. Accordingly, the investment is no longer recognised as an associate as of 31 December 2025. Information regarding the financial effects of the disposal is provided in Note 4 Divestments and other income.

The table below shows the summarised book values of the investment in associates:

The table below presents summarised financial information for the Group’s significant associates. The figures represent 100% of each investee’s operations, as required by IFRS 12.