Rabbalshede Kraft AB (publ) YEAR-END REPORT 2010 The information was released for publication on February 25, 2011 Continued growth and favorable earnings Year-end report 2010 Rabbalshede Kraft AB (publ) The fiscal year January 1, 2010 – December 31, 2010 . Net sales totaled KSEK 47,347 (33,461) . EBITDA amounted to KSEK 48,477 (17,121) . Operating profit (EBIT) amounted to KSEK 26,135 (2,851) . Profit after tax was KSEK 6,845 (loss: 1,058) . Earnings per share amounted to SEK 0.31 (loss: 0.06) . Electricity production totaled 65,653 MWh (42,360) . The average sales price for electricity was SEK 468/MWh (468) . The operating revenues item is recognized at MSEK 68.0, which includes a payment of MSEK 18.2 from Göteborg Energi AB for the right to build ten turbines on the Töftedalsfjället wind farm. As the first wind power company in Sweden, Rabbalshede Kraft received both quality certification in accordance with ISO 9001 and environmental certification under ISO 14001 during the year. The Brattön wind farm (15 MW) in Munkedal Municipality was opened. Building permit and environmental application approved for Dingle-Skogen wind farm (15 MW), Ås wind farm (15 MW) and Hällevadsholm Väster wind farm (5 MW) in Munkedal Municipality. The decision concerning the Ås wind farm has been appealed. In line with a previously approved incentive program share capital rose by KSEK 9,650. Application documents submitted for projects totaling 580 MW. Comparative figures pertain to amounts for January-December2009, which have been compiled from interim reports. Comparative figures pertaining to profit and loss have been adjusted somewhat to facilitate comparability between the years. Fourth quarter of the fiscal year, October 1, 2010 – December 31, 2010 . Net sales totaled KSEK 19,103 (12,750) . EBITDA amounted to KSEK 15,294 (10,020) . Operating profit was KSEK 6,786 (5,249) . The result after tax amounted to a loss of KSEK 2,185 (profit: 2,747) . Earnings per share amounted to a loss of SEK 0.10 (0.02) . Electricity production totaled 24,535 MWh (15,998) . The average sales price for electricity was SEK 504/MWh (465) . In line with a previously approved incentive program share capital rose by KSEK 9,650. Application documents submitted for the Årjäng NO, Årjäng SV, Årjäng NV, Kyrkeröd, Brattön-Sälelund and Ulvås projects. The projects pertain to a total of 213 MW. This is Rabbalshede Kraft Rabbalshede Kraft AB (publ) is a fast-growing player in wind power with three wind farms in operation, one under construction and 380 wind turbines in a procurement, application or planning phase. The goal is to take 250 wind turbines into operation by 2015, corresponding to a production capacity of about 1.5 TWh per year. To guarantee the long-term capital requirements that the planned build-out requires, the Company is preparing an application for listing on the NASDAQOMX Stockholm exchange. Follow the company’s development at www.rabbalshedekraft.se. Contents The fiscal year, January-December 2010 ............................................................................................................................ 4 Fourth quarter, October-December 2010 .......................................................................................................................... 5 President’s comments .............................................................................................................................................................. 6 Investments ................................................................................................................................................................................. 7 Financing ...................................................................................................................................................................................... 7 Hedging instruments ............................................................................................................................................................... 7 Production ................................................................................................................................................................................... 8 Personnel....................................................................................................................................................................................10 Rabbalshede Kraft’s financial calendar .............................................................................................................................15 Contact information ...............................................................................................................................................................15 Consolidated income statement ........................................................................................................................................16 Consolidated balance sheet .................................................................................................................................................17 Consolidated cash-flow statement ....................................................................................................................................19 Parent Company income statement ..................................................................................................................................20 Parent Company balance sheet ..........................................................................................................................................21 Notes to the condensed financial statements ................................................................................................................23 Rabbalshede Kraft AB (publ)YEAR-END REPORT 2010 Page 2 of 25 Key data table Q4 Q4 Q1-4 Q1-4 2010 2009 2010 2009 Amounts in KSEK Oct-Dec Oct-Dec Jan-Dec Jan-Dec Net sales 19,103 12,750 47,347 33,461 EBITDA 15,294 10,020 48,477 17,121 EBITDA margin,% 80.0 78.6 102.3 51.2 EBIT 6,786 5,249 26,135 2,581 EBIT margin,% 35.5 41.2 55.2 7.7 Equity/assets ratio,% 56 69 56 69 EBITDA: operating profit before depreciation, amortization and impairment EBITDA margin: EBITDA as a percentage of net sales EBIT: operating profit before financial items and tax EBIT margin: EBIT as a percentage of net sales Equity/assets ratio: Shareholders equity in relation to total assets. Photos from ongoing wind farm construction at Töftedalsfjället in Dals-Ed Municipality. Rabbalshede Kraft AB (publ)YEAR-END REPORT 2010 Page 3 of 25 The fiscal year, January-December 2010 In Sweden, 2010 was the coldest year since 1987 and westerly and southwesterly winds were substantially lower than normal, according to SMHI. This resulted in the production level being lower than expected in the Company’s wind farms. During the period January-December 2010, production totaled 65,653 MWh (42,360), generating net sales of KSEK 47,347 (33,461). The average price of electricity and electricity certificates during the year was SEK 714/MWh (787), of which the price of electricity accounted for SEK 468/MWh (468). The share of price-hedged electricity was 70 percent. The market price of electricity certificates declined during the year from slightly more than SEK 300 to SEK 235/MWh, which also had an impact on recognized revenue. Other operating revenues of KSEK 68,001 include reinvoicing of KSEK 49,576 for construction costs for the Töftedalsfjället and Tolvmanstegen wind farms. It also includes payment from Göteborg Energi of 18,154 KSEK for the sale of the right to construct ten 10 turbines at the Töftedalsfjället wind farm. Operating profit depreciation/amortization and impairment (EBITDA) amounted to KSEK 48,477 (17,121). Operating profit (EBIT) of KSEK 26,135 (2,851) included personnel expenses of KSEK 5,860 (6,111) and external costs of KSEK 61,011 (10,229). The external costs include reinvoiced construction costs of KSEK 49,576. As more wind farms are established, interest-bearing indebtedness and financial expenses increase. During the year, net financial items amounted to an expense of KSEK 16,779 (expense: 4,623). Financial expenses include KSEK 3,730 for preparations conducted for an exchange listing and capital procurement. Profit after tax amounted to KSEK 6,845 (loss: 1,058) for the fiscal year. In February, Rabbalshede Kraft and Göteborg Energi signed an agreement with Siemens AB pertaining to the delivery of 21 2.3-MW turbines to the Töftedalsfjället wind farm. The investment totals about MSEK 700, of which Rabbalshede Kraft’s share is MSEK 370. Construction is being financed by a credit facility from Swedbank AB. Töftedalsfjället will be Rabbalshede Kraft’s fourth wind farm in operation. It is scheduled to be in full production by spring 2011 and the Company’s installed output will increase by slightly more than 40 percent. At the Annual General Meeting (AGM) on April 15, Håkan Hellström was elected a new member of the Company’s Board. Håkan Hellström is President of the listed property company Castellum AB and a Board member of the West Sweden Chamber of Commerce and Industry. The AGM also resolved that the Company’s shares were to be consolidated so that ten (10) Class A shares and Class B shares become one (1) new Class A and Class B share, respectively (known as a reverse split). The implementation date for the reverse sprit at Euroclear Sweden AB was Tuesday, May 4, 2010. In May 2010, Rabbalshede Kraft became the first wind-power company in Sweden to secure ISO