Annual Report 2025

Assets intended for long term ownership or use are classified as fixed assets. Assets relating to the operating cycle are classified as current assets. Receivables are classified as current assets if they are to be repaid within one year after the balance sheet date. Equivalent criteria apply to liabilities.

Current assets are valued at the lower of purchase cost and net realisable value. Current liabilities are reflected in the balance sheet at nominal value at the establishment date.

Fixed assets are valued at purchase cost. Fixed assets whose value will decline are depreciated on a straight-line basis over the asset’s estimated useful life. Fixed assets are written down to net realisable value if a value reduction occurs that is expected to be permanent. Long-term liabilities are reflected in the balance sheet at nominal value on establishment date.

Trade Payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Cash and bank deposits, current assets, and current liabilities nominated in foreign currencies are converted to exchange rates prevailing at balance sheet date. Realised and unrealised exchange gains and losses on assets and liabilities in foreign currencies are included as financial items in the income statement.

The cash flow statement is prepared in accordance with the indirect method.

The preparation of financial statements in accordance with generally accepted accounting principles requires management to use estimates and assumptions that impact the value of assets and liabilities as well as disclosure notes. Such estimates and assumptions may have a significant impact on reported revenue and cost for a specific reporting period. Actual amounts may therefore deviate from the estimates.

The Company 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.

Foreign currency exposure arises mainly from revenues, expenses, and milestone payments denominated in USD. Historically, the Company’s exposure was concentrated in USD, with additional SEK exposure in 2023 and 2024 from milestone receipts. Following the carve-out of the FPSO business in 2024, overall USD exposure has decreased, although future milestone receipts in USD and EUR from previous divestments remain expected.

Where considered appropriate, the Company may implement hedging strategies to reduce the impact of material fluctuations. The Company does not use derivative financial instruments and has no designated hedge accounting relationships at the reporting date.

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with financial institutions, as well as credit exposure to customers. The Company has one main banking relationship with a financial institution that is currently rated Aa-.

However, there remains a risk that a counterparty may experience financial difficulties, which could adversely affect the Company’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.

Prudent liquidity risk management implies 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.

Magnora ASA is in a solid liquidity position with a cash balance of NOK 145.0 million at the balance sheet date, as well as undrawn credit facilities totalling NOK 150 million.

The revenue split, based on customer location was as follows:

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 Company operates a share option programme for management, employees and the Board of Directors. Share options are measured at fair value at the grant date using an option pricing model and recognised as an expense on a straight-line basis over the vesting period.

• 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 programs. This liability is measured at fair value and re-measured 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 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 balance sheet date there were 1,352,071 options held by the Board of Directors and the employees (2024: 1,553,000 options).

Other than share options granted under the Group’s approved share option program, no loans, advance payments, or additional share-based instruments were granted to members of executive management in 2025 or 2024.

Reference is made to Note 9 of the Group financials for further details of remuneration of Senior Management.

The Company is required to maintain a pension plan for its employees. As of year-end 2025 the Company operates a defined contribution plan. The plan is funded through payments to the pension company, and the Company has no further payment obligations once the contribution is paid. The contributions are recognised as employee benefit expenses when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Pension cost charged to the income statement in 2025 was NOK 2.4 million (2024: NOK 1.6 million). As of 31 December 2025, the defined contribution plan had 13 active participants (2024: 11 active participants).

Gain on sale of shares in subsidiaries and associated companies in 2025 is related to the sale of Magnora's 30% of Hermana, resulting in a gain of NOK 4.5 million, and NOK 11 million related to milestone payments from Red Sands project in South Africa. Cash received from sales of subsidiaries and associated companies in 2025 amounts to NOK 50.8 million.

Gain on sale of shares in subsidiaries and associated companies in 2024 is related to the sale of Magnora’s 40% share of Helios Nordic Energy AB, resulting in a gain of NOK 302 million, and earnout payments of NOK 60.4 million related to Evolar AB and NOK 7.2 million related to AGV Projects Ltd. Cash received from sales of subsidiaries and associated companies in 2024 amounts to NOK 392.8 million.

Deferred tax assets are recognised for unused tax losses only to the extent it is probable taxable profit will be available against which the losses can be utilised in the future. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits. 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 company’s contract portfolio and cost base as of today.

The Company 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 Company 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.

In Q2 2024, the Company completed the demerger of its FPSO business into Hermana Holding ASA, which was listed on the Oslo Stock Exchange on 18 June 2024. As of 31 December 2024, the Group held 30 per cent of the shares. In the second quarter of 2025, the Company sold its 30 per cent ownership interest in Hermana Holding ASA. Following the sale, the Company no longer holds any interest in Hermana Holding ASA.

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