The Board of Directors’ report
The Magnora group is a renewable energy project development corporation with a portfolio of companies in Norway, Sweden, Finland, United Kingdom (England, Scotland), Germany, Italy, and South Africa. The projects are mainly within data center, wind power, solar power and battery energy storage. The Group deploys most of its resources in project development, without extensive research activities. Magnora is a Norwegian public limited liability company, listed on the Oslo Stock Exchange, and located in Oslo, Norway.
Main events in 2025
The Board considers 2025 to be a year of significant strategic progress for Magnora, marked by continued portfolio expansion, the strengthening of core capabilities, and important milestones across key markets.
The Group broadened its strategic platform through entry into the data center sector. Early in the year, the Group established Magnora Data Center AB in partnership with Helios co‑founder Peter Nygren, securing a 67 percent ownership stake and enhancing its development capabilities in Sweden. Later in 2025, Magnora acquired 75 percent of Storespeed AS, a Norwegian operator with a strong track record in resilient and energy‑efficient data center operations. These initiatives create a solid foundation for scaling data‑center developments across the Nordics and align well with the Group’s expertise in land acquisition, permitting, and grid access.
The Group also completed its exit from legacy activities. Following the demerger of Hermana Holding ASA in 2024, Magnora retained a 30 percent interest, which was divested in June 2025. This marks the final step in Magnora’s transition to a focused renewable‑energy and infrastructure development company.
In South Africa, the 153 MW (612 MWh) Red Sands battery energy storage project reached financial close in July 2025, triggering the final milestone payment to Magnora. At the time, Red Sands represented the largest standalone BESS project in Africa to reach financial close, demonstrating the Group’s capability to advance complex infrastructure assets.
Magnora’s development portfolio continued to grow strongly during the year, increasing by more than 60 percent to 9.9 GW by year‑end. Several projects progressed to sales‑ready status, supported by strong market interest and ongoing commercial discussions across all geographies.
Risk and uncertainty
The Group is exposed to risks in different phases and in various forms. Relevant risks include market and financial risk, liquidity and capital access risk, regulatory and policy risk, geopolitical risk, project execution risk, environmental and climate risk, business conduct and compliance risk, cybersecurity and physical security risk, human capital risk, competition risk, cash flow risk, and counterparty risk. The Group’s overall risk management seeks to minimise the potential adverse effects on the Group’s performance likely to be caused by its exposure to such risk factors.
The following is the Group’s current considerations regarding but not limited to these risks:
Market and financial risk: The Group is directly and indirectly exposed to fluctuations in electricity prices, auctions, inflation, interest rates, and currency exchange rates, which can all impact investment returns and asset valuations. To mitigate these risks, the Group continuously monitors market developments and forecasts, and proactively adjusts its internal strategies, economic assumptions, and valuation models to reflect changing conditions.
Liquidity and capital access: As the Group increases its exposure to capital-intensive projects, it faces elevated liquidity and financing risks. These risks are actively managed through robust financial planning, close collaboration with financing partners, and a phased investment strategy aligned with project milestones and planned divestments.
Regulatory and policy risk: Changes in renewable energy policies, tax regimes, or regulatory frameworks may impact project timelines and profitability. The Group actively monitors policy developments and government signals to ensure timely adjustments to strategic plans and financial forecasts. Risks related to licensing, municipal veto rights, and concession approvals are mitigated through early stakeholder engagement and geographic diversification, which help reduce exposure to localised regulatory hurdles.
Geopolitical risk: Ongoing geopolitical tensions and conflicts continue to contribute to volatility across several markets. These developments may disrupt supply chains, alter regulatory environments, and impact trade agreements. The Group actively monitors geopolitical developments and regional market dynamics, updating strategic plans and financial forecasts to mitigate potential impacts. This includes scenario planning, geographic diversification, and close engagement with stakeholders to ensure resilience.
Project execution risk: Risks such as delays in permitting, grid access, and land acquisition remain material and can impact project timelines. In addition, global supply chain constraints such as limited availability of key components, may lead to increased costs and scheduling disruptions. The Group mitigates these risks through rigorous due diligence, flexible development timelines, and diversification across geographies and technologies to ensure resilience and execution agility.
Environmental and climate risk: Environmental considerations, including biodiversity, habitat protection, and land use can significantly influence permitting processes and project design. At the same time, climate change and the global energy transition continue to drive long-term demand for renewable energy, reinforcing the Group’s strategic direction. The Group integrates environmental factors early in project development and actively engages with stakeholders to ensure compliance and minimise ecological impact.
Business conduct and compliance risk: The Group is exposed to risks related to fraud, corruption, and non-compliance. These are mitigated through a robust internal control framework that includes a code of conduct, anti-corruption policies, IT security protocols, and supplier screening procedures. While exposure to fraud remains limited, the Group maintains vigilance through regular training, oversight, and reporting mechanisms. Compliance is followed up mainly by management on various levels, assisted by central Group functions. Magnora also has a whistleblowing channel on its website.
Cybersecurity and physical security: Cyberattacks and to some extent physical interference targeting infrastructure and businesses has been increasing the recent years. Power production and data centers are natural targets. The Group actively monitors threat intelligence and maintains its cybersecurity posture to safeguard operations, data integrity, and stakeholder trust. In both project development and operations, security receives high and increasing attention. This is increasingly relevant for data centers and renewable energy.
Human capital risk: The Group’s performance is closely tied to the expertise and continuity of its highly specialised team. The potential loss of key personnel remains an ongoing risk, particularly in areas requiring deep technical, regulatory, or market knowledge. This risk is mitigated through proactive succession planning, targeted recruitment efforts, and initiatives to retain and develop talent across the organisation.
Competition risk: The renewable energy sector is becoming increasingly competitive, with growing interest from established players and new entrants alike. The Group manages this risk through disciplined project selection and execution, rigorous cost control, and a strong market-oriented approach. By focusing on high-quality, strategically located projects and maintaining operational agility, the Group aims to preserve its competitive edge and deliver sustainable value in a dynamic market environment.
Cash flow and counterparty risk: Cash flows from subsidiaries and associated companies are dependent on effective operational execution and the timely achievement of project milestones, introducing both timing and counterparty risk. These risks are mitigated through contractual safeguards, active participation at the board level, and diversification of revenue streams across geographies, technologies, and counterparties to reduce dependency and enhance financial resilience.
Overall, the Group is exposed to a variety of risks. There are regular evaluations of existing and potential new risks, and known risks are continuously monitored.
The efforts include considering which risks are most relevant in various phases, technologies and countries, the interconnection between the risks (including scenarios where several risks materialise simultaneously), analysis of probabilities and consequences, efforts to mitigate risks, and preparedness for different events.
To continue to grow and be profitable, the Group will selectively accept risks in order to realise rewards, but the risks which have no rewards shall be kept at a minimum. Each employee is expected to pay close attention to risks and risk management as part of their daily work.
Corporate governance
The Group aims at maintaining sound corporate governance routines that provide the basis for long-term value creation benefiting shareholders, employees, other stakeholders and society at large.
As a guiding basis for its conduct of corporate governance, the Group uses the national Norwegian Code of Practice for Corporate Governance, of 28 August 2025. The status of corporate governance is addressed in its own section above.
The members of the Board of Directors are presented in the corporate governance section above and on the Group’s website: www.magnoraasa.com.
The Group maintains a directors and officers liability insurance policy (D&O) for a maximum liability of USD 10 million.
Corporate social responsibility
Health, safety, security and environment
Sound HSSE principles are integral to the Group’s success and are governed by the HSSE Policy and HSSE Procedure. These frameworks are implemented by each Managing Director, who introduces the documents to their respective teams and ensures annual compliance training is conducted. The implementation and monitoring of HSSE practices are embedded in daily operations and interactions. This hands-on approach enables continuous feedback and improvement, ensuring that HSSE remains a living part of the organisational culture.
The Group has identified the following risks related to health, safety, security, and environment:
- The Group maintains a high level of activity relative to its number of employees, which presents a potential risk of employee overload. This risk is actively managed through continuous monitoring, strategic use of external support, and timely recruitment. Additional hires are made when the volume and consistency of work justify the expansion, ensuring that operational demands are met without compromising employee wellbeing or performance.
- Employees may occasionally travel to locations that present higher safety risks than they are accustomed to. To mitigate these risks, all transportation in such areas is coordinated either by the local Magnora office or in collaboration with trusted local partners. This approach ensures that travel arrangements prioritise employee safety and comply with the Group’s HSSE standards.
- The Group’s current business model focuses on the early-phase development of data center and renewable energy projects, with limited ownership in physical assets except offices and a data center with a low physical footprint. As a result, the Group has not identified any activities with significant direct negative environmental impact. However, potential environmental risks may arise in the future, particularly in relation to evolving regulatory frameworks. For example, changes in legislation could restrict or prevent the development of certain projects within the Group’s portfolio. Conversely, regulatory developments may also present opportunities, such as enabling more efficient or cost-effective project execution.
- The Group acknowledges potential future reputational risks associated with the environmental impact of the data centers and the power production plants it develops. While environmental impact assessments are conducted during the development phase, there remains a possibility that unforeseen negative effects may arise post-divestment. Should any such impacts occur, they could attract adverse attention and result in reputational damage to the Group. The Group remains committed to thorough due diligence and responsible development practices to mitigate this risk. The same applies to operational data centers owned by the Group.
The Group has mainly the following efforts and measures related to HSSE:
- Annual risk assessment: Conducted with participation by all employees, this process identifies and evaluates relevant risks. Outcomes are used to update the governance framework, which is then communicated both internally and externally.
- Annual ethics and compliance training: All employees complete training that covers the Group’s governance principles and key risk areas, reinforcing a culture of integrity and accountability.
- Monthly management reporting: Each portfolio company submits monthly reports detailing operational status and project progress, enabling proactive oversight and decision-making.
- Valuation and risk tracking: Dedicated valuation models are maintained for each portfolio company and its projects, incorporating milestone achievements and updated risk assessments.
Sick leave was 1.4% (2024: 0.6%) for the Group for the year. No serious work incidents or accidents resulting in personal injuries or damage to materials or equipment occurred in 2025. There was one Lost Time Incident (LTI) in 2025.
The Board and management remain committed to promoting equal opportunities for all employees, regardless of gender, ethnicity, national origin, descent, race, religion, or functional ability. One of three Board members at year-end was female. The Group continues to prioritise gender balance and broader diversity in its governance and operations.
To reinforce its commitment to equality and inclusion, the Group has adopted an Equality and Diversity Policy, which is reinforced through annual ethics and compliance training for all employees. This training incorporates key principles from the Discrimination Act and the Anti-discrimination and Accessibility Act. More importantly, the Group’s intention to increase diversity is reflected in its recruitment practices, with diversity considerations actively guiding the hiring of new personnel.
Anti-corruption
Magnora has implemented a comprehensive framework to manage corruption risks across the Group and its subsidiaries. This includes a Code of Conduct, an Anti-Corruption Policy, and a Business Ethics Policy, all designed to uphold the Group’s zero-tolerance stance on bribery, fraud, and unethical behaviour.
Although the Group’s exposure to corruption risk is considered limited, two specific risk areas have been identified:
- Supplier kickbacks: The risk of improper incentives during supplier selection is mitigated through a rigorous qualification process. At least two individuals are involved in each selection, and the Group CFO is consulted to ensure transparency and accountability.
- Facilitation payments: The risk of facilitation payments, such as those made to obtain licences, permits, or concessions, is managed by involving multiple internal stakeholders in the process and avoiding the use of external service providers who may interact directly with government officials.
The Group has mainly the following efforts and measures related to anti-corruption:
- Annual risk assessment: Conducted with participation by all employees, this process facilitates the identification and evaluation of relevant risks. The outcomes inform updates to the governance framework, ensuring it remains responsive and robust.
- Annual ethics and compliance training: Conducted with participation from all employees, this process facilitates the identification and evaluation of relevant risks. The outcomes inform updates to the governance framework, ensuring it remains responsive and robust.
Human rights
The Group has implemented a comprehensive Human Rights Policy and embedded human rights considerations into its due diligence processes for acquisitions, partnerships, and supplier management. These processes are supported by structured tools and procedures, including supplier qualification questionnaires and risk-based assessments aligned with international standards such as the OECD Guidelines and ILO conventions. Being a data center operator from 2025 and beyond, the Group has increasing attention on data privacy and the importance of data security to protect customers’ data in addition to the Group’s internal data.
While the Group’s exposure to human rights-related risks is considered limited, one key risk area has been identified:
- Labour Conditions Among Contractors and Subcontractors: There is a potential risk that contractors or subcontractors may subject workers to forced labour, unsafe working conditions, inadequate living quarters, or unfair wages. To mitigate this, the Group takes direct responsibility for managing living arrangements on construction sites it owns or operates on behalf of customers. For example, this approach was applied at the Kungsåra project developed by Helios Nordic Energy in Sweden before we sold the company. The Group also addresses these risks through site visits, supplier screening, and contractual requirements that mandate compliance with human rights standards. Human rights and labour conditions are also included in the annual risk assessments and ethics and compliance training for all employees. Violations of the Human Rights Policy may result in termination of business relationships.
The Group has the following efforts and measures related to human rights:
- Site visits: Visiting suppliers identified with potential exposure
- Annual risk assessment: Involving all employees, where all relevant risks are discussed, and governance framework subsequently updated.
- Annual ethics and compliance training: Training for all employees where these specific risks are discussed with illustrative cases.
Sustainability
Purpose and business model
Magnora contributes to more clean energy and electrification by developing data center, wind, solar, and battery storage projects from greenfield to ready-to-build, as well as operating data centers. Each successful project affects thousands of households, supporting decarbonisation and digitalisation in Europe and South Africa. When the Group develops data center projects from greenfield to ready-to-build, it prioritises locations with access to renewable energy. Magnora enables faster deployment of sustainable data centers and clean energy solutions, benefiting stakeholders, the planet, and the Group’s long-term growth.
Contribution to UN’s Sustainable Development Goals
Magnora supports the UN Sustainable Development Goals (SDGs) and has identified three goals where we contribute significantly:
Ensure access to affordable, reliable, sustainable and modern energy for all
According to the “Tracking SDG 7: The Energy Progress Report 2025”, about 666 million people lacked access to electricity in 2023 and 85 per cent of these live in Sub-Saharan Africa. Expanding access to electricity is essential for improving living conditions and economic opportunities for underserved populations, while accelerating the shift to renewable energy is critical for reducing global emissions.
Magnora contributes directly to this effort by developing clean energy projects that increase power production, improve affordability, and support grid decarbonisation. Through its work on wind, solar, battery storage, Magnora helps deliver sustainable energy to thousands of households.
Build resilient infrastructure, promote inclusive and sustainable industrialisation, and foster innovation
Building new infrastructure for renewable energy generation enables existing industries to transition away from fossil energy sources, and data centers are a part of the digitalisation improving overall resource efficiency in our societies. Magnora’s projects are strategically located near end-users and critical transmission nodes, helping reduce grid dependency and enhance supply stability. In particular, battery energy storage systems (BESS) play a vital role in improving grid utilisation, balancing supply and demand, and preventing overload. These systems support the integration of intermittent renewable sources like wind and solar, making the energy system more resilient and efficient.
Take urgent action to combat climate change and its impacts
Magnora contributes to the global fight against climate change by investing in and developing renewable energy solutions that reduce emissions. The Group shares the sense of urgency and prioritises fast execution and progress across its wind, solar, battery storage, and data center projects. Each successful development increases clean energy supply, supports decarbonisation, and strengthens energy affordability. The Group’s data center projects are located where renewable energy is the main power source, which is not the case for much of the existing offering of data center capacity globally.
Sustainability governance and framework
Magnora’s sustainable purpose and business model are central to its role in addressing climate change. The Group contributes to the energy transition by developing projects that deliver environmental and social value. Beyond purpose, Magnora has established a structured approach to sustainability governance, ensuring meaningful impact where the Group operates or influences.
Governance structure
The Board of Directors holds ultimate responsibility for Magnora’s sustainability strategy, performance, and impact. Sustainability is an item in Board meetings, both at the project level and across the Group. The Board annually reviews the sustainability framework, including stakeholder assessments, material topics, and strategic goals. In 2025, the Board reviewed and updated its sustainability assessment covering key stakeholders, material matters, and objectives.
The CFO oversees the operational execution of sustainability efforts including leading a sustainability team which manages compliance, reporting, and integration across the organisation. Sustainability is embedded in daily operations, extending to subsidiaries and portfolio companies—even those where Magnora holds less than 50 per cent ownership.
Policy framework
To support quality, compliance, and risk mitigation, the Group has implemented the following policies and guiding documents:
- Code of Conduct
- Corporate Governance policy
- Anti-corruption policy
- Equality & Diversity policy
- Health, Safety, Security and Environment policy
- Human Rights policy
- Guidelines for remuneration of executive personnel
- Compliance with Transparency Act
- Modern Slavery statement
- Due Diligence guidelines
Reporting standards and CSRD alignment
Magnora is not currently subject to mandatory international sustainability reporting standards. However, the Group voluntarily reports on its contributions to three UN Sustainable Development Goals. The Group is exempt from reporting according to the Corporate Sustainability Reporting Directive (CSRD) of the European Union but is closely monitoring the expectations from relevant stakeholders and is considering voluntary reporting as it mature. The Group also includes relevant sustainability information in this annual report.
The Norwegian transparency act
The Group conducts due diligence in accordance with the OECD Guidelines for Multinational Enterprises and the Norwegian Transparency Act. Compliance with these guidelines and regulatory requirements includes publicly disclosing how the Group organises its activities, where it operates, and the policies and procedures in place to identify and manage actual and potential impacts on fundamental human rights and decent working conditions.
During the reporting year, no material adverse impacts were identified through the Group’s due diligence processes. These risks are further discussed in the Sustainability chapter. Magnora has implemented a comprehensive framework of guidelines, procedures, standards, and routines to support its due diligence obligations. Combined with a high level of awareness among employees, these measures are considered sufficient to mitigate relevant risks and ensure responsible business conduct. Further information about this is available on the Group’s website www.magnoraasa.com.
Financials
The Group’s key financial results for 2025 (with 2024 figures shown in brackets) are summarised below. The full net profit or loss of subsidiaries is consolidated into the Group’s financial statements, while Magnora’s share of financial results from portfolio companies is recognised in proportion to its ownership interest, in accordance with IFRS. Development costs are expensed (not capitalised), reflecting the Group’s focus on early-phase project development.
Operating revenues and other income totalled NOK 121.8 million (NOK 360.9 million). The decrease primarily reflects significant gains in 2024 from the divestment of Helios and earnout income from the sales of Helios, Evolar, and the Red Sands project in South Africa. Please see notes 4 and 8 to the Group statements below for further details. Net profit for 2025 was NOK 9.5 million (NOK 579.4 million). The relatively high net profit in 2024 was mainly due to the one-off gain from the carve-out of the legacy revenue business, now operating as Hermana Holding ASA. Earnings per share in 2025 were NOK 0.31 (NOK 9.00).
As of year-end 2025, the Group has accumulated tax losses exceeding NOK 3 billion. Due to uncertainty regarding the timing and availability of future taxable profits, only a limited portion of the related deferred tax asset has been recognised. The Group will reassess recognition as visibility on future profitability improves.
Net cash from operating activities was negative NOK 10.0 million (negative NOK 104.9 million). Net cash from investing activities was NOK 52.6 million (NOK 352.1 million), while financing activities resulted in an outflow of NOK 130.5 million (NOK 340.2 million). Although significantly improved by the licensing revenues from the Penguins contract, the net negative cash flow for the year was mainly due to higher development and operating costs as the Group expands its project pipeline and operations.
Total assets 31 December 2025 amounted to NOK 446.7 million (NOK 575.3 million), including cash and cash equivalents of NOK 166.4 million (NOK 254.1 million). Total equity as of 31 December 2025 amounted to NOK 369.4 million (NOK 402.2 million), corresponding to an equity ratio of 83 percent (70 percent). The improvement mainly reflects the settlement of the demerger payable to Hermana Holding ASA following receipt of the final milestone from the legacy licence agreement from Shell UK Ltd.
The Annual General Meeting (AGM) on 29 April 2025 authorised the Board to resolve distribution of dividends based on the Company's annual accounts, in line with the authorisation by the AGM in 2024. During 2025, the Board resolved three quarterly capital repayment of NOK 0.187 per share. The three repayments were made in March, May, and July, totalling NOK 35.9 million. The Board has since paused regular quarterly repayments to allocate more capital to the Group’s data center growth initiatives, viewed as an attractive strategic opportunity. Magnora will continue to consider extraordinary distributions and maintain its share buy-back programme. The Group retains NOK 6.9 billion in paid-in capital above par value, equivalent to NOK 159 per share, available for future distributions.
The share buy-back programme, originally established in 2019, was renewed in 2025 and continues under shareholder authorisation granted at the AGM. Purchases are executed on the Oslo Stock Exchange at prevailing market prices, subject to a daily limit of 50 percent of the average trading volume over the preceding 20 days. As of year-end, Magnora held 1,867,484 treasury shares, representing 2.8 percent of total outstanding shares.
In accordance with Section 2-2 of the Norwegian Accounting Act, the Board confirms that the annual financial statements have been prepared on a going concern basis. This assessment is supported by the Group’s strategic plans and financial forecasts.
Magnora ASA, the parent company of the Magnora Group, provides management and support services to the Group’s subsidiaries and affiliated companies. For 2025, Magnora ASA reported a profit after tax of NOK 123.4 million (NOK 353.5 million in 2024). Total assets amounted to NOK 712.8 million (NOK 730.8 million), and the equity ratio was 98 per cent (84 per cent).
The Board considers Magnora ASA’s equity and liquidity position at year-end to be satisfactory. Based on its assessment of the financial results, position, and outlook for 2026, the Board proposes that the 2025 profit of NOK 123.4 million be transferred to other equity.
Outlook
In 2025, Magnora continued to execute its strategy of developing and divesting high quality renewable energy projects across solar PV, onshore and offshore wind, and battery energy storage systems. The Group maintained its asset light model, concentrating on early-phase development and divesting projects at or before the ready-to-build stage. This disciplined approach has proven robust and profitable, even amid evolving market dynamics and shifts in investor sentiment.
During the year, Magnora also broadened its strategic platform by entering the data center sector. The Group established dedicated operations in Norway and Sweden, including the launch of Magnora Data Center AB and the acquisition of Storespeed, an operational data center company with a strong record in resilient and energy efficient operations. These initiatives position Magnora to serve growing demand for AI-ready, hyperscale data centers, supported by early-stage commitments totalling 1,500 MW. The data center business complements the Group’s renewable energy activities by balancing electricity production with consumption, reducing exposure to power price volatility, and enabling opportunities for colocation with solar, BESS, and wind assets.
Magnora’s project portfolio increased to 9.9 GW by the end of 2025, supported by strong origination across Europe and South Africa. The Group observed increasing caution among traditional developers and utilities, a dynamic Magnora views as an opportunity to accelerate organic growth and pursue acquisitions. Through a structured and disciplined approach to permitting, grid applications, and environmental assessments, Magnora continues to create value for customers seeking shovel-ready renewable energy assets and data center sites.
The Group remains focused on markets where speed, adaptability, and execution strength are decisive, particularly in onshore renewables and battery energy storage. Offshore wind continues to require long term clarity and political alignment, and the Group is progressing carefully within this segment. The broader global energy transition, driven by decarbonisation and digitalisation, is expected to further increase demand for renewable energy, energy storage, and data center infrastructure.
Based on its growing project portfolio and core development capabilities, Magnora will continue to pursue strategic partnerships, farm-downs, and project sales. The Group experiences strong interest from energy companies, infrastructure funds, and private equity investors in its portfolio companies and development assets, and sales processes are ongoing with assistance of sales advisors in South Africa, UK, Germany, and Italy.
Oslo, Norway, 24 February 2026
The Board of Directors of Magnora ASA
Torstein Sanness
Chairman of the Board
Hilde Ådland
Board member
John Hamilton
Board member
Erik Sneve
CEO