EAM Solar

Quarterly Report • Apr 30, 2014

EAM Solar ASA

HIGHLIGHTS IN THE 1ST QUARTER 20143
KEY FIGURES 3
INTERIM REPORT 1ST QUARTER 2014 4
OPERATIONAL REVIEW AND OUTLOOK 4
OPERATIONS4
P31 PORTFOLIO CLOSING 4
DIVIDENDS 4
DEBT FINANCING 5
OUTLOOK5
FINANCIAL REVIEW 6
INCOME STATEMENT6
CASH FLOW AND BALANCE SHEET STATEMENTS6
CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION	7
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME	7
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION	8
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY9
CONSOLIDATED CONDENSED CASH FLOW STATEMENT 9
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	10
Note 1 - Basis of preparation 10
Note 2 – Currency exposure 11
Note 3 - Tax 11
Note 4 – Acquisition accounting and impairment test11
Note 5 - List of subsidiaries 11
Note 6 - Segment information11
Note 7 - Transactions with related parties12
Note 8 – Information on major customers12
Note 9 – Property, plant and equipment12
Note 10 - Cash and cash equivalents 12
Note 11 – Detailed operational cost overview 13
Note 12 – Quarterly P&L overview 2012 - 201413
Note 13 – Power production 14

Highlights in the 1st quarter 2014

EAM Solar ASA took important strategic steps during the first three months of 2014. The company is close to finalise the P31 transaction at improved terms. Operations have been in line with expectations, and a dividend of EUR 0.36 (NOK 3) is to be paid in May.

• P31 expected to close near term, yet delayed due to final negotiations, which will reduce the total risk for EAM. The share purchase agreement will be amended and EAM will under certain conditions have the right to sell back some of the power plants and thus lower the portfolio risk.
• Equity issue of EUR 26,3m (NOK 220m) at an issue price of EUR 5,2 (NOK 80) per share concluded in January. The equity issue and credit facility of EUR 6m secures financing of the P31 acquisition.
• Q1 power production of 1.5 GWh, 8% lower than seasonal average. Momo and Caltignaga 15% above normal in the quarter while Varmo and Codroipo 14% below normal in the quarter
• Reported EBITDA in the quarter was negative with EUR 342k, adjusted for equity issue cost and due diligence cost on P31, EBITDA was positive with EUR 216k.
• 1st quarter 2014 dividend payment of EUR 0.36 (NOK 3) per share decided in accordance with Company bylaws) to be distributed to shareholders in week 20, 2014. Share will trade ex dividend from Monday 12th of May. Full year 2014 dividend distribution based on the P31 acquisition is expected between EUR 0,84 to 1,2 per share (NOK 7 to 10) to be paid on a quarterly basis.

(EUR 000')	Unaudited Q1 2014	Unaudited Q1 2013	Audited 2013	Audited 2012	Audited 2011
Revenues	592	496	3 110	3 106	340
Cost of operations	-116	-81	-360	-259	-25
Sales, general and administration expenses	-260	-281	-1 021	-1 133	-343
Acquisition and transaction costs	-558	-327	-512	-908	-1 123
EBITDA	-342	-193	1 216	806	-1 151
Depreciation, amortizations and write downs	-360	-345	-1 240	-1 036	-148
Gain on bargain purchase	0	0	2 244	2 668	0
EBIT	-702	-538	2 220	2 438	-1 299
Net financial items	-215	176	2 538	-1 848	-41
Profit before tax	-917	-362	4 758	590	-1 340
Income tax gain/(expense )	277	36	-106	-61	355
Net income	-640	-326	4 652	529	-985
Earnings per share (fully diluted):	-0,13	-0,26	2,01	0,44	-0,82
Distribution to shareholders per share	0,00	0,00	0,60	0,00	0,00
Dividend yield	0,0 %	0,0 %	5,6 %	0,0 %	0,0 %
Million no. of shares (fully diluted)	5,07	1,20	2,32	1,20	1,20
EBITDA adjusted	216	134	1 729	1 714	-28
EBIT adjusted	-145	-211	489	678	-176
Net income adjusted	-290	-333	252	-424	946

Key figures

Adjusted EBITDA, EBIT and Net income are adjusted for non-recurring items such as cost of acquisition and financing, gains from bargain purchase and non-cash currency movements.

Interim report 1st quarter 2014

EAM Solar ASA is a listed investment company on the Oslo Stock Exchange under the ticker EAM. The Company's business is to own solar photovoltaic power plants and sell produced electricity under long-term fixed price sales contracts. Initial geographical focus is Italy where the company owns four power plants in the Friuli and Piemonte regions in Northern Italy. Energeia Asset Management AS manages EAM Solar ASA under a long-term management agreement.

Operational review and outlook

Operations

Power production & performance

The quarterly power production of 1,52 GWh was 7,7% below norm level due to very poor solar irradiation conditions in January and February of 40% below normal in the North of Italy. March was 20% above normal solar irradiation. By end of April good sun conditions have improved production to now being on a normal level year to date.

Market price development

Around 13% of the total revenue in Q1 2014 came from variable market contracts (RiD).

The market price of electricity in Italy has dropped from a level of EUR 75 to 85 per MWh in 2011 and 2012 to a level of EUR 55 to 65 per MWh in 2013. The market price in the 1st quarter was EUR 50 per MWh in average and is expected to stay at a low level during the spring.

EAM assumes in its budgets and in its acquisition appraisals that the long-term electricity price in Italy will remain at a level in the range EUR 50 to 60 per MWh going forward and has adjusted valuation of acquisition targets accordingly and not reduced the required capital return ratios.

EAM use from time to time to 12mths fixed contracts for market electricity sales.

P31 portfolio closing

On the 31st of December 2013 EAM signed a conditional Share Purchase Agreement (SPA) with Aveleos S.A. of Luxembourg for the acquisition of a portfolio consisting of 31 power plants in southern Italy with a combined capacity of 30 MW and an annual electricity production capacity of approximately 44 GWh.

The enterprise value of the acquisition is in the range of EUR 107m to 114m depending on the outcome of the final due diligence and the P31 portfolio obtaining certain revenue and production targets in 2014. Final settlement of all acquisition price adjustments will be concluded in 2015.

The P31 portfolio has an existing debt financing of EUR 73.4m, at the financial take-over date the 1st of January 2013, in a combination of leasing and non-recourse project finance. The equity payment for the shares in the P31 portfolio companies will consequently be in the range EUR 34m to 41m.

The portfolio will contribute with annual sales of approximately EUR 16m and an annual EBITDA in the range EUR 12 to 14m.

By the end of the 1st quarter the confirmatory due diligence work were almost complete. As a result of certain findings in the due diligence, EAM has renegotiated certain terms and conditions to the Share purchase agreement. In addition, the finalization of formalities relating to change of ownership has taken longer than anticipated. The transaction closing longstop date has been postponed and the final adjustments to the terms and conditions of the acquisition will be concluded shortly.

EAM and the seller works toward achieving that all necessary formalities prior to the closing are finalized before the end of May.

Dividends

Based on the Company by-laws, recent change in Norwegian company law, and the decision made by the Company's extraordinary general meeting the 17th of December 2013, the Board of Directors in EAM will distribute dividends on a quarterly basis in 2014.

EAM Solar will distribute a dividend of EUR 0,36 per share (NOK 3) in conjunction with the 1st quarter report. The dividend will be distributed to shareholders in week 20. Share will trade ex. dividend from Monday 12th of May.

Based on the closing of the P31 Portfolio acquisition, EAM expects to pay dividends following each quarterly report in 2014. The dividend payments in 2014 in addition to the 1st quarter dividend will be in the range EUR 0,84 to 1,2 per share (NOK 7 to 10).

Debt financing

The market for non-recourse project financing to renewable energy in Italy has been inactive the last years.

EAM has started discussions on debt financing of the existing portfolio, but no conclusion was achieved prior to the end of the quarter. Indicated pricing of project financing debt is in the range 6,5% to 7% all-inclusive for a fixed interest 15-year duration loan.

EAM's overall target gearing level is approximately a 60% to 65% debt level.

Outlook

Post closing of the P31 portfolio

In conjunction with the closing of the acquisition and subsequent increased scope of EAM's business in Italy, Energeia Asset Management AS has started to establish an operational office in Italy in the 1st quarter 2014 as part of the organisation to manage the day-to-day operation of EAM Solar ASA's power plants in Italy.

Financial review

Income Statement

Revenues

1st quarter revenues came in at EUR 592k.

Achieved average electricity price for the quarter was EUR 390 per MWh against EUR 450 per MWh in 1st quarter 2013. The main reasons for the reduction in achieved electricity price is due to the fact that the Momo & Caltignaga SPP's has a FIT of EUR 245 per MWh against Varmo and Codroipo that has EUR 346 per MWh. In addition, the reduction in the RID price of 32% from EUR 65 per MWh to EUR 50 per MWh.

Operational cost

Cost of operations came in at EUR 116k, an increase of EUR 35k, since Momo & Caltignaga plants are now included.

SG&A costs came in at EUR 259k in the 1st quarter 2014 against EUR 281k in 2013.

Based on the closing of the P31 portfolio the Company expects the relative SG&A cost level per SPP to be decreased significantly due to economies of scale going forward.

Operational earnings

1st quarter EBITDA came in at a loss of EUR 342k, adjusted for expensed costs related to the private placement in January and the due diligence costs of the P31 acquisition EBITDA from operations came in at EUR 216k.

Net financial items

Net finance is mainly affected by the fluctuations in the NOK/EUR currency exchange rate since EAM does not have any debt financing at the moment.

Due to the weakening of the NOK against the EUR in the period EAM had a non-cash currency loss of EUR 207m.

Profit before tax and net income after tax

The result for the quarter was a net loss of EUR 640k representing loss per share of EUR 0,13 in the quarter.

Cash Flow and Balance Sheet Statements

Cash Flow

Cash flow operations for the quarter came in at a negative amount of EUR 1,6m mainly related to changes in working capital and cost of due diligence. Investments of EUR 217k were related to the final payment for the Momo and Caltignaga acquisition.

Cash flow form financing was the net proceeds from the private placement in January of EUR 25,1m.

Cash at hand for the Company is by the end of the quarter EUR 29,5m, and in addition the Company has a credit facility of EUR 6m.

Balance Sheet

Total assets stands at EUR 56.5m 100% financed by equity. Net working capital (excluding cash) was negative with EUR 770k at end of March.

Oslo 30th of April 2014

Ragnhild Wiborg Paal E Johnsen Marthe Hoff Director Chairman Director

Viktor E Jakobsen Audun Wickstrand Iversen

Executive Director CEO

Condensed consolidated interim financial information

Interim condensed statement of comprehensive income

(EUR)	Note	Unaudited Q1 2014	Unaudited Q1 2013	Audited 2013	Audited 2012	Audited 2011
Revenues	6,8,13	592 109	496 414	3 109 548	3 106 472	340 075
Cost of operations	12	-116 450	-81 324	-360 210	-259 260	-25 230
Sales, general and administration expenses	12	-259 964	-281 303	-1 020 720	-1 133 138	-342 639
Acquisition and transaction costs	12	-557 583	-326 740	-512 385	-907 671	-1 122 832
EBITDA		-341 888	-192 953	1 216 233	806 403	-1 150 626
Depreciation, amortizations and write downs	9	-360 399	-345 069	-1 240 020	-1 036 269	-148 012
Gain on bargain purchase		0	0	2 243 510	2 668 237	0
EBIT		-702 287	-538 022	2 219 723		2 438 371 -1 298 638
Finance income		42 841	333 121	2 753 421	4 711	86 740
Finance costs		-258 042	-157 520	-215 308	-1 853 042	-128 021
Profit before tax		-917 488	-362 421	4 757 837	590 040	-1 339 919
Income tax gain/(expense)		277 214	36 048	-106 093	-61 171	355 330
Profit after tax		-640 274	-326 373	4 651 744	528 869	-984 589
Other comprehensive income Translation differences Other comprehensive income net of tax		1 284 843 1 284 843	-94 469 -94 469	-3 138 155 -3 138 155	812 044 812 044	236 114 236 114
Total comprehensive income		644 569	-420 842	1 513 589	1 340 913	-748 475
Profit for the year attributable to:
Equity holders of the parent company		-640 274	-326 373	4 651 744	528 869	-984 589
Non-controlling interests		0	0	0	0	0
Equity holders of the parent company		-640 274	-326 373	4 651 744	528 869	-984 589
Total comprehensive income attributable to:
Equity holders of the parent company		644 569	-420 841	1 513 589	1 340 913	-748 475
Non-controlling interests			0	0	0	0
Equity holders of the parent company		644 569	-420 841	1 513 589	1 340 913	-748 475
Earnings per share:
Continued operation
- Basic		-0,13	-0,26	2,23	0,44	-1,15
- Diluted		-0,14	-0,26	1,98	0,44	-0,82

The interim financial statement information has not been subject to audit or review. Diluted number of shares at the end of the 1st quarter 2014 is 5,070,000. The equity issue was concluded on the 17th of January, increasing the number of outstanding shares by 2,750,000.

Consolidated condensed statement of financial position

		Unaudited	Audited	Audited	Audited
(EUR)	Note	Q1'2014	2013	2012	2011
ASSETS
Property, plant and equipment	9	23 144 630	23 721 735	19 533 095	6 563 352
Other long term assets		3 263 330	422 867	338 210	355 330
Non-current assets		26 407 960	24 144 602	19 871 305	6 918 682
Receivables		522 723	802 046	950 882	429 266
Other current assets		42 119	77 723	598 551	209 770
Cash and short term deposits	10	29 591 965	4 861 406	713 730	8 000 351
Current assets		30 156 806	5 741 174	2 263 163	8 639 387
TOTAL ASSETS		56 564 766	29 885 776	22 134 468	15 558 069
EQUITY AND LIABILITIES
Issued capital		6 152 669	2 932 561	1 523 423	1 523 423
Share premium		429 971	429 971	13 400 695	13 400 695
Paid in capital		6 582 640	3 362 532	14 924 118	14 924 118
Translation differences		-854 942	-2 089 997	1 048 158	236 114
Other equity		49 500 585	28 051 626	-455 720	-984 589
Other equity		48 645 643	25 961 629	592 438	-748 475
Total equity		55 228 283	29 324 160	15 516 556	14 175 643
Total non-current liabilities		0	0	0	0
Trade payables		917 008	167 772	1 004 610	590 729
Income tax payable		417 642	174 311	164 106	175 591
Short term loan - interest bearing		0	0	5 420 265	0
Other current liabilities		1 834	219 533	28 931	616 106
Total current liabilities		1 336 483	561 616	6 617 912	1 382 426
Total liabilities		1 336 483	561 616	6 617 912	1 382 426
TOTAL EQUITY AND LIABILITIES		56 564 766	29 885 776	22 134 468	15 558 069

Oslo, 30th of April 2014

Board of Directors

Consolidated condensed statement of changes in equity

		Share premium		Currency translation
(EUR)	Share capital	fund	Other equity	reserve	Total equity
Equity as at 1 January 2013	1 523 423	13 400 695	-455 720	1 048 158	15 516 556
Capital increase 25 March 2013	1 335 833	13 519 263			14 855 096
Costs related to capital increase		-1 026 588			-1 026 588
Conversion of share premium fund		-25 415 355	25 415 355
Dividends or distribution to shareholders			-1 484 705		-1 484 705
Profit (loss) After tax			4 651 744		4 651 744
Other comprehensive income				-3 187 943	-3 187 943
Equity as of 31 December 2013	2 859 256	478 016	28 126 674	-2 139 785	29 324 160
Equity as at 1 January 2014	2 859 256	478 016	28 126 674	-2 139 785	29 324 160
Capital increase 17 January 2014	3 293 413		23 053 892		26 347 305
Costs related to capital increase			-1 087 752		-1 087 752
Dividends or distribution to shareholders					0
Profit (loss) After tax			-640 274		-640 274
Other comprehensive income				1 284 843	1 284 843
Equity as of 31 March 2014	6 152 669	478 016	49 452 541	-854 942	55 228 283

Consolidated condensed cash flow statement

		Unaudited	Unaudited	Audited	Audited	Audited
(EUR)	Note	Q1 2014	Q1 2013	2013	2012	2011
Ordinary profit before tax		-640 274	-372 456	4 757 837	590 040	-1 339 919
Paid income taxes		0	-15 057	0	-727 658	0
Depreciation		360 399	345 069	1 240 020	1 036 269	148 012
Gain on bargain purchase		0	0	-2 243 510	-2 668 237	0
Changes in trade receivables and trade payable		-1 028 559	1 659 506	-688 002	130 944	861 238
Changes in other accruals		-278 934	-589 878	491 897	-390 824	188 526
Cash flow from operations		-1 587 368	1 027 184	3 558 243	-2 029 466	-142 143
Purchase of property, plant and equipment		0	-66 240	0	-73 685	0
Acquisition of subsidiary, net of cash acquired		-217 845	0	-3 368 989	-11 696 898	-6 933 426
Cash flow from investments		-217 845	-66 240	-3 368 989	-11 770 583	-6 933 426
Proceeds from issue of share capital		25 259 554	14 855 096	13 828 508	0	14 924 118
Dividends or shareholder distributions		0	0	0	0	0
Proceeds from new loans		0	0	-5 420 265	6 106 249	0
Repayment of loans		0	-5 420 265	-1 484 705	-685 984	0
Cash flow from financing		25 259 554	9 434 831	6 923 538	5 420 265	14 924 118
Cash at beginning of period		4 861 406	713 730	713 730	8 000 351	0
Net currency translation effect		1 276 218	-397 484	-2 965 116	1 093 163	151 802
Net increase/(decrease) in cash and cash equivalents		24 730 559	9 998 292	7 112 792	-7 286 621	8 000 351
Cash at end of period			29 591 965 10 712 022	4 861 406	713 730	8 000 351

Notes to the Interim Condensed Consolidated Financial Statements

Note 1 - Basis of preparation

General accounting principles

EAM Solar ASA (the Group) is a public limited company, incorporated and domiciled in Norway. The registered office of EAM Solar ASA is Dronningen 1, N-0287 Oslo, Norway. The Company was founded the 5th of January 2011.

The Company is listed on the Oslo Stock Exchange under the ticker EAM.

The main activity of EAM Solar ASA is to own solar PV power plants and sell the electricity produced under longterm contracts. EAM's main purpose is to create a steady long-term dividend yield for its shareholders. EAM Solar ASA currently owns four photovoltaic power plants in Italy. The company has three subsidiaries in Italy and no employees.

Energeia Asset Management AS manages EAM Solar ASA under a long-term management agreement. EAM Solar Park Management AS (EAM SPM), a subsidiary of Energeia Asset Management AS, is conducting most of the day-to-day management tasks directly or through the use of subcontractors.

This interim condensed consolidated financial statement for the 1st quarter 2014 has been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's Annual Report 2013

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31st of December 2013. Standards and interpretations as mentioned in the Group's Annual Report 2013 Note 1 and effective from the 1st of January 2013 did not have a significant impact on the Group's consolidated interim financial statements.

Financial risk

The primary focus of the Group's capital management is to ensure good solidity and liquidity that will support a strong credit rating and healthy capital ratio in order to support its business and maximize the shareholders values.

The Group manages its capital structure and makes adjustment to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives policies or processes during 2013.

The Group monitors capital using a gearing ratio, which is net debt divided by enterprise value. The Group's policy and ambition is to keep the gearing ratio between 60% and 65%. The Group includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. Capital includes equity attributable to equity holders of the parent.

The Company is currently debt free. However, as financial markets seems to improve, the Company will seek to increase its acquisition capacity by assuming debt on the currently 100% equity financed power plants.

Market and regulatory risk

The European financial crisis and Basel III funding requirements has reduced European banks possibilities to secure funding for long-term project finance, which has limited the financing of solar power plants in Europe from August 2011. Although the project financing showed signs of reopening in 2013 the recovery of a normalized bank financing market is still not in place.

This has affected EAM Solar, although the outcome is positive so far through the acquisition of power plants of high quality and with a price significantly below market terms as seen in 2011 and 2012.

In Italy the main incentive program expired in 2013, which most probably will reduce the volume of new built solar power plants the next couple of years. As Solar PV power plants have become cheaper, Italian authorities expect 1 – 2 GW of new capacity to be installed annually without subsidies.

The secondary market is strong, especially in Italy, with a steady availability of projects that have been in operation for 2 – 3 years.

During the last years there has been changes in different taxes that impact the profitability of solar power plants. Increases in IMU (real estate taxes) and corporate taxes have had negative impact during the last years.

On the regulatory side there are minor changes that impact the profitability of solar power plants. Including, tariff for one year RiD contracts for plants below 1MW.

With the transition from a subsidy-based industry to grid parity, with pure commercial considerations, off-take agreements and new valuation models to factor in new risk elements will have to be developed.

Credit risk

The risk for losses is considered to be low, as the counterpart will be sovereign states in Western Europe. The group has not made any set-off or other derivate agreements to reduce the credit risk in EAM Solar ASA.

Note 2 – Currency exposure

Almost all of EAM's activity is in EUR. Some of the cost base is in NOK and the effective currency for the mother company is NOK.

Due to the weakening of the Norwegian krone against the Euro, EAM has booked a net non-realized currency exchange loss in the 1st quarter 2014 of EUR 207k.

Note 3 - Tax

The subsidiaries are mainly financed through intercompany loans granted by the Mother Company. Interest charged on loans from Norway to Italy is subject to a 15% withholding tax in Italy. The withholding tax is payable at the time of transfer of funds from Italy to Norway as payment for accrued interest.

Note 4 – Acquisition accounting and impairment test

EAM Solar ASA has as its core business to acquire and operate solar PV power plants (SPP's). Acquisitions are either conducted by acquiring companies that owns SPP's, or by acquiring the power plant directly (asset purchase). Choice of acquisition method has tax implications, and implications for the asset value used in the Company's accounts post acquisition.

As experienced in the 3rd quarter 2013, the book value of assets owned by the acquired company was higher than the purchase price. In conjunction with the accounting principles used in the group accounts by EAM Solar ASA in 2012 and in 2013, a difference between purchase price and the book value of assets results in an accounting gain or loss recognized in the Company's profit and loss statement.

Since EAM is experiencing that the current accounting practise of recognising such difference in the P&L statement results in significant gains, which may distort the perception of the underlying economic activity of the company, the Board of Directors have evaluated this accounting practise together with the Company's auditor in conjunction with the full year 2013 audit. See the Annual Report 2013 for further comments.

Based on the current IFRS accounting rules, the Board of Directors in EAM has, together with the Company's Auditor, decided to apply the IFRS accounting rules, i.e. maintain the recognition of book values when deemed appropriate.

Note 5 - List of subsidiaries

The following subsidiaries are included in the interim consolidated financial statements:

Company	Country of incorporation	Main operation	Ownership
EAM Solar Italy Holding Srl	Italy	Holding company	100%
EAM Solar Italy 1 Srl	Italy	Solar power plant	100%
EAM Solar Italy 2 Srl	Italy	Solar power plant	100%
EAM Solar Italy 3 Srl	Italy	Solar power plant	100%

Note 6 - Segment information

EAM Solar Italy 1 Srl	Q1'2014	Q1'2013
Revenues from external customers	144 963	146 055
EBITDA	83 858	62 456
EBIT	-12 658	-58 439
Investments	0	22 080
Non-current assets	6 051 760	6 490 655
EAM Solar Italy 2 Srl	Q1'2014	Q1'2013
Revenues from external customers	296 011	350 359
EBITDA	175 798	189 719
EBIT	-20 893	-33 174
Investments	0	44 160
Non-current assets	12 463 129	13 476 954
EAM Solar Italy 3 Srl	Q1'2014	Q1'2013
Revenues from external customers	151 135	0
EBITDA	67 873	0
EBIT	681	0
Investments	217 845	0
Non-current assets	5 324 717	0
Other & eliminations	Q1'2014	Q1'2013
Revenues from external customers	0	0
EBITDA	-669 418	-445 128
EBIT	-669 418	-446 409
Investments	0	0
Non-current assets	2 568 354	4 053 975
Total	Q1'2014	Q1'2013
Revenues from external customers	592 109	496 414
EBITDA	-341 888	-192 953
EBIT	-702 287	-538 022
Investments	217 845	66 240
Non-current assets	26 407 960	24 021 584

EAM Solar ASA owns, through three 100% owned Italian subsidiaries, four solar power plants in Italy.

EAM Italy 1 Srl owns the Varmo power plant, EAM Italy 2 Srl the Codroipo power plant, and EAM Solar Italy 3 Srl owns, through the 100% acquired company M&T Solare Srl, the Momo and Caltignaga power plants.

Non-current assets consist of the solar power plants in Italy, land, deferred tax asset and capitalized acquisition costs.

Note 7 - Transactions with related parties

All the transactions have been carried out as part of the ordinary operations and at arms-length prices.

Energeia Asset Management, and its daughter company EAM SPM, delivers management services to EAM Solar ASA according to the Management Agreement. EAM SPM is a 100% owned by Energeia Asset Management AS.

According to the Management Agreement, the Energeia group charges EAM Solar ASA the direct operating costs, without any profit margin, related to the management services provided. At the moment any direct operating costs above NOK 5 million a year must be approved by the board of directors in EAM Solar ASA.

Furthermore, the Energeia group receives 12,5% of the Groups pre-tax profit as royalty from EAM Solar ASA – the financial participation mechanism. The royalty is based on the fact EAM Solar is developed, created and managed by Energeia Asset Management AS. The royalty structure aligns the interests of the Energeia group with the interests of the shareholders of EAM Solar ASA.

Direct cost charged by the Energeia group according to the Management Agreement amounts can bee seen in note 11.

In the calculation of the royalty, any non-cash currency gain or non-cash gain on bargain purchase is subtracted from the royalty calculation base.

Note 8 – Information on major customers

Of the groups' revenues of EUR 592k in the 1st quarter all came from sale of electrical power.

The sale of electricity is mostly (85%) conducted through long-term electricity sales contracts (the FIT contracts), and the rest is from sales at market price.

The Company's major customer is GSE for the FIT contracts. GSE is short for Gestore dei Servizi Energetici GSE S.p.A., a company owned by the Ministry of Economy and Finance. For further information about GSE visit the following web page: www.gse.it.

Note 9 – Property, plant and equipment

The assets are depreciated based over an economic life of 11 to 2o years and linear depreciation.

In the 4th quarter 2013 the tax depreciation period for SPP's was changed from 20 to 25 years according to a regulatory change in Italy. This has not impacted our IFRS practise of depreciation over 20 years equivalent to the FIT electricity sales contract period.

(EUR)

2014	Power plants
Carrying value 1 January 2014	23 197 458
Additions	217 845
Depreciation	-360 399
Carrying value 31 March 2014	23 144 630
2013	Power plants
Carrying value 1 January 2013	19 533 095
Additions	4 904 382
Depreciation	-1 240 020
Carrying value 31 December 2013	23 197 458
2012	Power plants
Carrying value 1 January 2012	6 563 352
Additions	14 006 012
Depreciation	-1 036 269
Carrying value 31 December 2012	19 533 095

Note 10 -					Cash and cash equivalents
-----------	--	--	--	--	---------------------------

(EUR)	Q1 2012	Q2 2012	Q3 2012	Q4 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Q1'2014
Unrestricted cash Norway	225 149	725	860 075	249 256	9 860 020	7 507 109	1 746 242	1 435 170	25 975 787
Unrestricted cash Italy	1 448 391	756 072	254 943	203 564	588 323	659 126	2 105 870	3 176 028	3 365 968
Restricted cash Italy	260 910	260 910	260 910	260 910	260 885	250 208	250 208	250 208	250 208
Cash	1 934 449	1 017 707	1 375 927	713 730	10 709 227	8 416 443	4 102 320	4 876 716	29 591 962

The group has a credit facility of EUR 6m at the end of the 1st quarter 2014. The credit facility has not been utilized in the quarter and is issued by the Company's largest shareholder, Sundt AS.

Note 11 – Detailed operational cost overview

(EUR)			EAM Solar ASA EAM Solar Italy 1 EAM Solar Italy 2 EAM Solar Italy 3		Other & Eliminations
Revenues	592 109	144 963	296 011	151 135	0
Cost of operations	-116 450	-23 041	-57 657	-35 752	0
Land rent	-26 804	-8 696	-18 108	0	0
Insurance	-24 746	-4 399	-17 123	-3 225	0
Operation & Maintenance	-49 372	-8 253	-15 559	-25 560	0
Other operations costs	-15 528	-1 693	-6 867	-6 967	0
Sales, General & Administration	-259 964	-38 064	-58 517	-47 510	-115 873
Commercial management	-12 693	-6 250	-6 250	-193	0
Accounting, audit & legal fees	-49 572	-9 688	-9 623	-12 866	-17 396
IMU tax	-37 837	-8 941	-16 091	-12 805	0
EAM SPM direct costs	-146 250	-12 679	-26 070	-16 544	-90 957
EAM SPM management service contract	0	0	0	0	0
Other administrative costs	-13 613	-507	-483	-5 102	-7 520
Acquisition & financing cost	-557 583	0	-4 038	0	-553 545
Acquisition transaction costs	-491 335	0	0	0	-491 335
Funding & IPO costs	-62 210	0	0	0	-62 210
Other non-recurring items	-4 038	0	-4 038	0	0
EBITDA	-341 888	83 858	175 798	67 873	-669 418

The costs under other & eliminations are costs of EUR 490k related to the due diligence costs of the P31 acquisition in EAM Solar Italy Holding Srl., and EUR 62k related to the Private placement conducted in January 214 in the Norwegian mother company.

Note 12 – Quarterly P&L overview 2012 - 2014

(EURm)	Q1 2012	Q2 2012	Q3 2012	Q4 2012	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Q1 2014
Production (GWh)	1,176	2,484	2,574	0,931	1,102	2,335	2,692	1,310	1,521
% of annual production	16%	35%	36%	13%	15%	31%	36%	18%
Revenues	0,501	1,047	1,085	0,474	0,496	0,986	1,131	0,497	0,592
Total operating costs	-0,550	-0,789	-0,448	-0,516	-0,689	-0,318	-0,431	-0,455	-0,934
Operations costs	-0,061	-0,080	-0,064	-0,061	-0,081	-0,083	-0,068	-0,128	-0,116
SG&A costs	-0,193	-0,202	-0,255	-0,479	-0,281	-0,173	-0,234	-0,332	-0,260
A&T costs	-0,295	-0,507	-0,129	0,023	-0,327	-0,062	-0,129	0,005	-0,558
EBITDA	-0,049	0,258	0,637	-0,042	-0,193	0,667	0,700	0,042	-0,342
EBITDA margin	-10%	25%	59%	-9%	-39%	68%	62%	9%	-58%
Depreciation	-0,161	-0,291	-0,292	-0,293	-0,345	-0,241	-0,295	-0,358	-0,360
Gain on bargain purchase	2,668	0,000	0,000	0,000	0,000	0,000	2,422	-0,179	0,000
EBIT	2,458	-0,033	0,345	-0,335	-0,538	0,426	2,826	-0,494	-0,702
Financial income	0,000	0,027	0,003	0,001	0,333	0,999	0,666	0,755	0,043
Financial costs	-0,313	-0,413	-0,658	-0,496	-0,158	-0,003	-0,049	-0,006	-0,258
Profit before tax	2,145	-0,419	-0,310	-0,831	-0,362	1,422	3,444	0,254	-0,917
Adjusted EBITDA	0,246	0,765	0,766	-0,066	0,134	0,729	0,828	0,037	0,216

EBITDA adjusted is adjusted for acquisition, transaction and funding costs.

Note 13 – Power production

The following power plants are included in the consolidated financial statements:

Power plant	Capacity	Production	Location	Type
	kW	MWh (*)	Province
Codroipo	3 128	4 623	Udine	Dual axis tracker
Varmo	1 521	2 298	Udine	Dual axis tracker
Momo	994	1 133	Piemonte	Fixed tilt
Caltignaga	992	1 120	Piemonte	Fixed tilt
Total	6 635	9 173

Momo 198 0 0 460 143 Caltignaga 208 0 0 439 144 Total 1 521 1 102 2 335 3 559 1 310

(*) Production is based on historical average solar irradiation.

Reported power production	Q1 2014	Q1 2013	Q2 2013	Q3 2013	Q4 2013	FY2013	FY2012
Codroipo	749	750	1 550	1 798	707	4 806	4 595
Varmo	367	352	785	862	315	2 315	2 571
Momo	198	0	0	16	143	159	0
Caltignaga	208	0	0	15	144	160	0
Total	1 521	1 102	2 335	2 692	1 310	7 439	7 166
Actual power production	Q1 2014	Q1 2013	Q2 2013	Q3 2013	Q4 2013	FY2013	FY2012
Codroipo	749	750	1 550	1 798	707	4 806	5 238
Varmo	367	352	785	862	315	2 315	2 571

Varmo commenced commercial operations in December 2010, Codroipo in May 2011, and Momo and Caltignaga since September 2011. All power plants are on 20-year fixed price electricity sales contracts with the GSE in Italy. Varmo and Codroipo receive a fixed price (FIT) of EUR 346 per MWh delivered and Momo and Caltignaga receives a fixed price of EUR 245 per MWh. In addition all power plants receives a market-determined price (RID-price). The market price for electricity in Italy has dropped from a level of approximately EUR 80 per MWh to EUR 60 per MWh the past 12 months.

All power plants are included in the financial report from the time of the financial close. Varmo since September 2011, Codroipo since March 2012, and Momo and Caltignaga from the 27th of September 2013. However, the financial ownership of the power plants took place earlier. EAM Solar ASA assumed ownership of Varmo and Codroipo the 1st of September 2011 and Momo and Caltignaga the 1st of July 2013.

The power plants are located on the North of Italy, and production follows the seasonality of solar irradiation, implying that about 19% of annual power production is in Q1, 32% in Q2, 35% in Q3 and 14% in Q4.

Electricity production in the Q1 2014 was 7,7 % lower than budget (based on historic average irradiation), which is within normal weather variations.

Varmo & Codropio experienced two very weak solar irradiation months in January and February with 40% below normal irradiation levels. March on the other hand was 20% above normal levels for all power plants.

603 0 583 0 8 307 7 808

Technical status for the power plants in the 1st quarter was fair with three minor technical disruptions recorded that resulted in a total power loss of 35 MWh, equivalent to 2,3% of the production in the quarter. Most technical faults where corrected within days.

EAM (the Manager) has since January introduced a new technical management and preventive maintenance programme. The new programme involves amongst others a faster fault response intervention. Furthermore, a continuous operational monitoring is now conducted from the Manager's office in Oslo.

First quarter 2014

EAM Solar ASA Dronningen 1 NO-0287 Oslo NORWAY

Phone: +47 - 2411 5716 E-mail: viktor@eamsolar.no

www.eamsolar.no