Arise

Quarterly Report • Nov 8, 2019

INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2019

Third quarter (1 July – 30 September 2019)

• Net sales for the quarter amounted to MSEK 58 (150).
• Operating profit/loss before depreciation and amortisation excluding associates (adjusted EBITDA) totalled MSEK 22 (90), and including associates (EBITDA) totalled MSEK 21 (90).
• Operating profit/loss excluding associates (adjusted EBIT) amounted to MSEK 3 (72), and including associates (EBIT) totalled MSEK 2 (72).
• Profit/loss before tax excluding associates (adjusted EBT) amounted to MSEK -15 (53), and including associates (EBT) totalled MSEK -16 (53).
• Profit/loss after tax excluding associates (adjusted profit/loss after tax) amounted to MSEK -15 (46) and including associates totalled MSEK -16 (46), corresponding to SEK -0.48 (1.38) per share before and after dilution.
• Operating cash flow was MSEK -4 (40).
• Production from Own wind power operations was 69 GWh (68).
• Average income from Own wind power operations was SEK 419 per MWh (575), of which SEK 322 per MWh (367) pertained to electricity and SEK 97 per MWh (209) to electricity certificates.

First nine months (1 January – 30 September 2019)

• Net sales for the period amounted to MSEK 206 (253).
• Operating profit/loss before depreciation and amortisation excluding associates (adjusted EBITDA) amounted to MSEK 71 (144), and including associates (EBITDA) totalled MSEK -202 (144).
• Operating profit/loss excluding associates (adjusted EBIT) amounted to MSEK 14 (90), and including associates (EBIT) totalled MSEK -259 (90).
• Profit/loss before tax excluding associates (adjusted EBT) amounted to MSEK -48 (24), and including associates (EBT) totalled MSEK -341 (24).
• Profit/loss after tax excluding associates (adjusted profit/loss after tax) amounted to MSEK -45 (19) and including associates totalled MSEK -333 (19), corresponding to SEK -9.96 (0.57) per share before dilution and SEK -9.92 (0.57) after dilution.
• Operating cash flow was MSEK 131 (84) and total cash flow was MSEK 118 (-94) including cash proceeds from the sale of associates of MSEK 193 (0) and loan repayments of MSEK -146 (-929).
• Production from Own wind power operations was 245 GWh (210). Production from Co-owned wind power operations ceased in conjunction with the sale of the associate Sirocco.
• Average income from Own wind power operations was SEK 435 per MWh (543), of which SEK 337 per MWh (355) from electricity and SEK 98 per MWh (188) from electricity certificates.
• The sale of the company's participation in the associate Sirocco was completed.

About Arise

Arise is one of Sweden's leading wind power companies, with the business concept of developing, building and managing onshore proprietary wind farms and on behalf of investors. The company is listed on Nasdaq Stockholm.

Arise AB (publ), Box 808, SE-301 18 Halmstad, Sweden, tel. +46 10 450 71 00, Corporate Identity Number 556274-6726 E-mail: info@arise.se, www.arise.se

Halmstad, 8 November 2019

Daniel Johansson CEO

CEO's statement

During the quarter, we continued to work on the sale of the Skaftåsen project. We are fully focused on closing the deal this year, and we are now in a very hectic phase of the sale process. We can note that there is greater interest than ever in investing in Nordic wind power. With a strong project portfolio, we believe that we are well positioned to grow profitably.

Winds were a little more favourable than normal during the period. As a result of the price hedges we have for income from electricity certificates and electricity, our income was below the market prices for electricity and above those for electricity certificates. The prices for electricity certificates remain pressed downward due to the lack of information on the design of a stop rule in the energy certificate system. The Swedish government has promised Norway that a stopping mechanism will be implemented in late 2020 or early 2021, which in practice means that a proposal must be submitted by spring 2020 at the latest. The earlier the better, from the industry's perspective.

Our initiative to extend the useful life of our farms in southern Sweden continues to progress according to plan, and shows promise. We expect to be able to share the results in the first half of next year.

We are clearly oriented on refinancing our secured bond at the end of next year, and are now investigating various opportunities for bringing about the best possible financing. The aim is to significantly reduce our financial expenses. Another important part of the plan to make our operational wind farms profitable again is to reduce the price hedging requirements for electricity production over time. With a lower debt/equity ratio, the requirements can be scaled back and we are certain this will lead to higher income over time.

Our growth aims are intact as regards project development and management, and we are continually evaluating new opportunities for supplementing our project portfolio. We are gradually developing new wind power projects to present to investors. We expect to package and sell both the Ranasjöhöjden and Salsjöhöjden projects in 2020; all together they have a few more turbines than the Skaftåsen project.

Operating profit/loss before depreciation (EBITDA), MSEK

Operating profit/loss (EBIT), MSEK

Net sales and results

MSEK	Q3 2019	Q3 2018	9m 2019	9m 2018
Net sales	58	150	206	253
Adjusted EBITDA	22	90	71	144
Adjusted EBIT	3	72	14	90
Adjusted EBT	-15	53	-48	24
Loss from associates (after tax)	-1	–	-273	–
Recognised EBITDA	21	90	-202	144
Recognised EBIT	2	72	-259	90
FX item from comprehensive income attributable to hedge accounting	–	–	-20	–
Recognised EBT	-16	53	-341	24
Net effect of adjustment items	-1	–	-288	–
Recognised profit/loss after tax	-16	46	-333	19

Adjusted earnings pertains to earnings from the company's underlying operations excluding the sale of the company's participation in its associate Sirocco and its effects on the Group's recognised earnings.

Comments on the third quarter

The quarter was characterised by slightly stronger winds than normal and lower market prices for electricity and certificates than the yearearlier period. At the same time revenue recognition in Development and management was lower as a result of no projects being sold during the quarter.

Net sales from Development and management decreased to MSEK 29 (111). This was due to lower revenue recognition, since no projects were sold during the period compared with the year-earlier period, when projects totalling 82 MW were sold. Production from Own wind power operations increased to 69 GWh (68). The average price for production fell to SEK 419 per MWh (575). This was mainly due to lower market prices compared with the year-earlier quarter. The combination of a lower average price and higher production reduced net sales from Own wind power operations to MSEK 29 (39). Overall, the Group's net sales fell MSEK 92 to MSEK 58 (150).

Operating expenses amounted to MSEK 37 (60), of which MSEK 18 (35) were attributable to project sales and contracts, and MSEK 19 (25) comprised comparable operating expenses. One of the reasons for the decline was a lower tax assessment value for wind farms, applied retroactively as of 1 January 2019. Own capitalised work amounted to MSEK 1 (0) and consolidated loss from associates, which consisted of additional consulting expenses attributable to the sale of the associate Sirocco, totalled MSEK -1 (0).

As a result of lower revenue recognition in Development and management as well as a lower average price for production, operating profit before depreciation/amortisation, excluding associates (adjusted EBITDA) fell to MSEK 22 (90) and adjusted EBIT to MSEK 3 (72). Net financial items improved slightly to MSEK -18 (-19), due primarily to lower loans. Adjusted EBT thus amounted to MSEK -15 (53). Recognised profit/loss before and after tax amounted to MSEK -16 (53) and MSEK - 16 (46) respectively.

The consolidated recognised results for the quarter were negatively impacted by MSEK -1, attributable to the sale of the associate Sirocco in Q1 2019.

IFRS16 resulted in a MSEK 1 decrease in operating expenses and increases in depreciation and financial expenses of MSEK 1 and MSEK 1 respectively for the quarter.

Comments on the first nine months of the year

Development and management income decreased during the period due to lower income from project sales. Stronger winds than normal in the period resulted in a higher production of 245 GWh (210). At the same time, however, the average price for Own production decreased SEK 108 per MWh to SEK 435 per MWh (543), which meant that sales from Own production fell compared with the year-earlier period. In total, net sales decreased during the period by MSEK 47 to MSEK 206 (253).

Operating expenses amounted to MSEK 139 (110), of which MSEK 70 (37) were attributable to sales and contracts. Remaining expenses decreased to MSEK 69 (73) and consisted of personnel and other external expenses. Own capitalised work was MSEK 3 (2). Consolidated profit/loss from associates was MSEK -273 (0) as a result of the sale of the associate Sirocco in Q1 2019.

As a result of lower revenue recognition in Development and management as well as lower volumes and price mix in production, operating profit before depreciation/amortisation excluding associates (adjusted EBITDA) fell to MSEK 71 (144) and adjusted EBIT to MSEK 14 (90). Adjusted EBT declined to a lesser extent as a result of improved underlying net financial items and totalled MSEK -48 (24). This was due primarily to the impact of refinancing costs in the year-earlier period.

Recognised EBITDA and EBIT before and after amortisation and depreciation including associates declined due to the sale of the associate to MSEK -202 (144) and MSEK -259 (90) respectively. Moreover, recognised earnings before tax were also affected by a currency item, attributable to hedge accounting ending in connection with the sale. Profit/loss before tax thus amounted to MSEK -341 (24). Recognised profit/loss after tax was MSEK -333 (19), representing earnings per share of SEK -9.96 (0.57) before dilution and SEK -9.92 (0.57) after dilution.

IFRS16 resulted in a MSEK 4 decrease in operating expenses and increases in depreciation and financial expenses of MSEK 3 and MSEK 2 respectively for the period.

Operating cash flow, MSEK

Net debt, MSEK

Cash flow and investments

Comments on the third quarter

Cash flow from operating activities before changes in working capital was MSEK 14 (88). Changes in working capital amounted to MSEK -18 (-49), driven by ongoing external projects. Total operating cash flow thus amounted to MSEK -4 (40). Net cash flow from investing activities was MSEK -3 (7). Cash flow after investments thus amounted to MSEK -8 (47). Loan repayments totalled MSEK 0 (-29) and interest of MSEK -17 (-17) was paid during the quarter. Depreciation of IFRS16 lease liabilities totalled MSEK -1 (0). No interest was received during the quarter and no net payments to or from blocked accounts took place, which is why cash flow for the quarter was MSEK -26 (0).

Comments on the first nine months of the year

Cash flow from operating activities before changes in working capital was MSEK 56 (139). Changes in working capital amounted to MSEK 76 (-55), driven primarily by the receipt of part and final payments for projects sold. Accordingly, the total operating cash flow was MSEK 131 (84). Net cash flow from investing activities was MSEK -12 (-2). Cash flow after investments thus amounted to MSEK 119 (82).

The sale of the associate Sirocco was completed and cash proceeds of MSEK 193 were received through repayment of the loan to Arise from the associate. Loan repayments of MSEK -146 (-929) were also made. New loans raised amounted to MSEK 0 (825). Interest and financing costs of MSEK -49 (-72) were paid. Depreciation of IFRS16 lease liabilities totalled MSEK -1 (0). No interest was received during the period and no net payments to or from blocked accounts took place. The exercise of warrants generated cash funds of MSEK 2 for the company and cash flow for the period thereafter amounted to MSEK 118 (-94).

Financing and liquidity

Net debt amounted to MSEK 691 (957), of which convertibles comprised MSEK 237 (235). Cash and cash equivalents totalled MSEK 180 (52). The company still had significant tied-up working capital in ongoing construction projects sold at the end of the quarter. The remaining cash flow from ongoing construction projects sold is expected to amount to slightly more than MSEK 50, net, during the period from the third quarter of 2019 to the first quarter of 2020, most of which is expected to be received in the first quarter of 2020. The equity/assets ratio at the end of the period was 34% (41). Under the assumption that all of the company's convertible bonds would be converted and existing cash netted against interest-bearing liabilities, the equity/assets ratio would correspond to 54%.

Development and management income, MSEK

Divested projects, accumulated, MW

External management assignments, accumulated, MW

Segment – Dev. & management

	Q3	Q3	9m	9m
MSEK	2019	2018	2019	2018
Income	30	112	104	143
Cost of sold projects and
contracts	-18	-35	-70	-37
Other operating expenses and
capitalised work	-7	-7	-21	-21
Operating profit before
depreciation (EBITDA)	5	70	12	85
Operating profit (EBIT)	5	70	12	85
Profit before tax	1	66	0	72

Comments on the third quarter

The construction of the Enviksberget and Bröcklingberget projects continued during the quarter, but are expected to be slightly delayed. Revenue recognition was therefore reduced during the quarter. The projects are expected to be completed around the end of the year and the first quarter of 2020, respectively. The sale process for the Skaftåsen project (approximately 230 MW) continued during the quarter and is expected to be completed in the fourth quarter of 2019. In connection with the planned sale, certain investments were made in the project after the end of the quarter. In addition, the work on readying several projects for sale continued; the ambition is to sell the Ranasjöhöjden and Salsjöhöjden projects of at least 200 MW in 2020.

In total, Development and management income declined to MSEK 30 (112), primarily due to no projects being sold during the period while two projects of 82 MW were sold in the year-earlier period. The cost of sold projects and contracts fell to MSEK 18 (35) year-on-year. Other operating expenses increased to MSEK 8 (7) and capitalised work increased to MSEK 1 (0) compared with the preceding year. Accordingly, both EBITDA and EBIT fell to MSEK 5 (70). Net financial items remained unchanged, meaning profit before tax decreased MSEK 65 to MSEK 1 (66).

Comments on the first nine months of the year

In addition to events in the third quarter, the Svartnäs project was completed and final settlement took place during the period. Furthermore, a part-payment for the Bröcklingberget project was received.

Income in the segment declined to MSEK 104 (143), while the cost of sold projects and contracts increased to MSEK 70 (37) compared with the year-earlier period. Other operating expenses increased to MSEK 24 (23) and capitalised work to MSEK 3 (2). Overall, EBITDA therefore declined to MSEK 12 (85) and EBIT to MSEK 12 (85). Net financial items improved to MSEK -12 (-13). Overall, this means that earnings before tax fell by MSEK 72 to MSEK 0 (72).

Production, GWh

Specific operating expense, SEK per MWh

Q3-18Q4-18Q1-19Q2-19Q3-19

Segment – Own wind power operations

	Q3	Q3	9m	9m
MSEK	2019	2018	2019	2018
Income	29	39	107	114
Operating expenses Operating profit before	-9	-14	-35	-39
depreciation (EBITDA)	20	25	72	75
Operating profit (EBIT)	1	7	17	21
Loss before tax	-13	-8	-32	-34

Comments on the third quarter

Winds were somewhat stronger than normal, which meant production at the company's wholly-owned farms increased slightly to 69 GWh (68). Average income for electricity and certificates was SEK 322 per MWh (367) and SEK 97 per MWh (209), respectively. Electricity (SE4) was 19% below, and certificates (SKM) 67% above, the market price for the period. Compared with the market price for the period, the average prices for electricity were negatively impacted by price hedges and the pricing profile of production. The average prices for certificates were positively impacted by price hedges.

Net sales rose MSEK 0 due to higher production and decreased MSEK 11 due to a lower average price compared with the preceding year. Specific operating expense decreased to SEK 135 per MWh (205), in part as a result of lower tax assessment value for property tax, retroactively applied as of 1 January 2019. EBITDA thus decreased by MSEK 6 to MSEK 20 (25) year-on-year.

EBIT decreased to MSEK 1 (7). Net financial items improved slightly to MSEK -14 (-15), after which loss before tax decreased to MSEK -13 (-8).

Comments on the first nine months of the year

Production in the company's own farms increased to 245 GWh (210) due to stronger winds year-on-year. Average income from electricity and certificates decreased to SEK 337 per MWh (355) and SEK 98 per MWh (188) respectively for the period, which is 19% below and 14% above the market prices for electricity (SE4) and certificates (SKM) respectively.

Net sales rose MSEK 19 due to higher production and declined MSEK 26 due to a lower average price compared with the year-earlier period. Specific operating expense decreased to SEK 141 per MWh (185). Overall, net sales and EBITDA therefore declined MSEK 7 and MSEK 3 respectively, year-on-year.

EBIT fell to MSEK 17 (21). Net financial items improved to MSEK -49 (-55) due to refinancing costs during the year-earlier period. Overall loss before tax thus declined to MSEK -32 (-34).

Project portfolio

At the end of the period, the company had a project portfolio of more than 1,000 MW, of which approximately 1,000 MW in Sweden and about 70 MW in an active phase in Scotland. The carrying amount totals approximately MSEK 95. Fully developed, the portfolio would equate to an investment level of more than SEK 10 billion. While individual projects may not always be realised, the overall project portfolio represents high potential value for the company, with relatively little tied-up capital and low risk.

Other significant events

There are no other significant events to report.

Related-party transactions

No significant transactions with related parties took place during the period.

Contingent liabilities

There were no changes to the Group's contingent liabilities. These contingent liabilities are described in more detail on page 74 under Note 21 in the 2018 Annual Report.

Significant events after the end of the period

No significant events occurred after the end of the period.

Outlook

The market for development and management is favourable. We see opportunities to create value with relatively little capital employed. We remain optimistic regarding the trend for forward prices for electricity. The proposed stop rule (first entering into force 2030) for the electricity certificate system has pushed certificate prices to a low level. There is uncertainty regarding the final structure of the stop rule. We can state that our remaining wind farms are located in favourable areas and that there is potential for value enhancement via, for example, extending the useful life. A strong financial position means we can reduce our interest expense over time and optimise income from production for the long term. Underlying earnings are expected to increase from 2018 levels, and net debt is expected to fall substantially over the next few years.

Risks and uncertainties

Risks and uncertainties affecting the Group are described on pages 36– 37 of the 2018 Annual Report, and financial risk management is presented on pages 64–71. No significant changes have taken place that affect the reported risks.

Ownership structure

A presentation of the company's ownership structure is available on the website (www.arise.se).

Parent Company

The Parent Company's operations comprise project development (identifying suitable wind locations, signing leasehold agreements, producing impact assessments, preparing detailed development plans and permits), divesting projects, project management of new projects, managing internal and external projects (technically and financially) and managing the Group's electricity and electricity-certificate trading activities. The Parent Company manages the Group's production plans and electricity hedges in accordance with the adopted financial policy. Until February 2018, the electricity-generating subsidiaries sold their produced electricity to Arise at spot price, which Arise sold on to the market at spot price. These intra-Group trading activities were recognised on a gross basis in the income statement. From March 2018, the electricity-generating subsidiaries sell their produced electricity directly to counterparties in the market at spot price. During the first nine months of the year, the Parent Company's total income amounted to MSEK 124 (80), and purchases of electricity and certificates, personnel and other external expenses, capitalised work on own account and depreciation of non-current assets totalled MSEK -139 (- 100), resulting in EBIT of MSEK -15 (-19). A net financial expense of MSEK -366 (-20) led to a net loss after tax of MSEK -332 (-46). The Parent Company's net investments amounted to MSEK -12 (-11).

Accounting policies

Arise applies the International Financial Reporting Standards (IFRS), as adopted by the EU, and the interpretations of these (IFRIC). This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The Parent Company's financial statements have been prepared in accordance with the Swedish Annual Accounts Act and Recommendation RFR 2 of the Swedish Financial Reporting Board. The accounting policies are consistent with those applied in the 2018 Annual Report, with the addition of IFRS16, which has been applied since 1 January 2019. The transition to IFRS16 is recognised according to the modified retrospective approach, which entails a calculation model based only on the remaining payments, the comparative year is not restated and lease contracts of less than 12 months are not taken into consideration. For remaining lease commitments, the Group recognised lease liabilities and right-of-use assets of MSEK 55 as per 1 January 2019. Leases refer to right-of-use assets for wind farms and office premises. For more information regarding the accounting policies pertaining to the new lease standard, refer to Note 1 in the 2018 Annual Report.

Review by the auditor

This report has been reviewed by the company's auditor.

Financial calendar

• Fourth quarter (1 Oct.-31 Dec.) 14 February 2020
• First quarter (1 Jan.-31 Mar.) 6 May 2020
• Second quarter (1 Apr.-30 Jun.) 17 July 2020
• Third quarter (1 Jul.-30 Sep.) 6 November 2020

Halmstad, 8 November 2019 Daniel Johansson, Chief Executive Officer

For further information, please contact

Daniel Johansson, CEO, Tel. +46 702 244 133

Linus Hägg, CFO, Tel. +46 702 448 916

Auditor's report on review of the interim condensed financial information (interim report) prepared in accordance with IAS 34 and Chapter 9 of the Swedish Annual Accounts Act

Introduction

We have performed a review of the interim condensed financial information (interim report) of Arise AB (publ) at 30 September 2019, and the nine-month period ending on that date. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim financial report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express an opinion on this interim report based on our review.

Direction and scope of the review

We have conducted our review in accordance with the International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with the ISA, and with generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the opinion expressed on the basis of a review does not provide the same level of assurance as an opinion expressed on the basis of an audit.

Opinion

Based on our review, nothing has come to our attention that causes us to believe that the interim report has not, in all material aspects, been compiled for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act, and for the Parent Company in accordance with the Swedish Annual Accounts Act.

Malmö, 8 November 2019

Öhrlings PricewaterhouseCoopers AB

Magnus Willfors Authorised Public Accountant

CONSOLIDATED INCOME STATEMENT

		2019	2018	2019	2018	2018
(Amounts rounded to the nearest MSEK)		Q3	Q3	9 months	9 months	Full year
Net sales	Note 1	58	150	206	253	343
Other operating income		0	0	1	0	0
Total income		59	150	207	253	343
Capitalised work on own account		1	0	3	2	3
Personnel costs		-7	-8	-27	-27	-42
Other external expenses	Note 2	-30	-52	-112	-83	-113
Profit/loss from associates	Note 3	-1	0	-273	0	0
Operating profit before depreciation (EBITDA)		21	90	-202	144	191
Depr. and imp. of property, plant and equipment	Note 4,5	-19	-18	-57	-54	-73
Operating profit/loss (EBIT)		2	72	-259	90	118
Financial income		-	2	0	2	1
Financial expenses		-18	-21	-82	-69	-91
Profit/loss before tax		-16	53	-341	24	28
Tax on profit/loss for the period		0	-7	8	-4	-7
Net profit/loss for the period		-16	46	-333	19	21
Earnings per share before dilution, SEK		-0.48	1.38	-9.96	0.57	0.64
Earnings per share after dilution, SEK		-0.48	1.38	-9.92	0.57	0.64

Treasury shares held by the Company, amounting to 54,194 shares, have not been included in calculating earnings per share.

Earnings are 100% attributable to the Parent Company's shareholders.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	2019	2018	2019	2018	2018
(Amounts rounded to the nearest MSEK)	Q3	Q3	9 months	9 months	Full year
Net profit/loss for the period	-16	46	-333	19	21
Other comprehensive income
Items that may be reclassified to the income statement
Translation differences for period	0	0	0	0	0
Cash flow hedges	-2	15	47	-36	-52
Net investment in foreign currency	-	-3	-36	20	17
Share of other comprehensive income in associates, net after tax	-	-7	72	-12	-12
Income tax attributable to components of other comprehensive income	0	-5	-2	2	6
Other comprehensive income for the period, net after tax	-2	0	80	-26	-41
Total comprehensive income for the period	-18	46	-253	-7	-20

Comprehensive income is attributable in its entirety to the Parent Company's shareholders.

CONSOLIDATED BALANCE SHEET

	2019	2018	2018
(Condensed, amounts rounded to the nearest MSEK)	30 Sep	30 Sep	31 Dec
Property, plant and equipment 1)	1,341	1,344	1,330
Non-current financial assets	38	483	482
Total non-current assets	1,379	1,827	1,812
Inventories	6	6	8
Other current assets	113	168	187
Cash and cash equivalents	180	52	61
Total current assets	298	226	256
TOTAL ASSETS	1,677	2,053	2,069
Equity	573	837	824
Non-current interest-bearing liabilities 2)	932	983	922
Provisions	46	46	46
Total non-current liabilities	978	1,029	968
Current interest-bearing liabilities	-	34	97
Other current liabilities	126	153	180
Total current liabilities	126	187	277
TOTAL EQUITY AND LIABILITIES	1,677	2,053	2,069

1) Property, plant and equipment include lease assets of MSEK 52 (0).

2) Non-current interest-bearing liabilities inclulde lease liabilities of MSEK 53 (0).

CONSOLIDATED CASH FLOW STATEMENT

	2019	2018	2019	2018	2018
(Condensed, amounts rounded to the nearest MSEK)	Q3	Q3	9 months	9 months	Full year
Cash flow from operating activities before changes in working capital	14	88	56	139	183
Cash flow from changes in working capital	-18	-49	76	-55	-70
Cash flow from operating activities	-4	40	131	84	114
Investments in property, plant and equipment	-3	-20	-12	-28	-33
Sales of property, plant and equipment	-	27	-	27	27
Cash flow from investing activities	-3	7	-12	-2	-6
Loan repayments	-	-29	-146	-929	-929
Loans raised	-	-	-	825	825
Repayment of long-term receivables	-	-	193	-	-
Amortization of lease liabilities	-1	-	-1	-	-
Interest paid and other financing costs	-17	-17	-49	-72	-88
New issue / warrants	-	-	2	-	-
Cash flow from financing activities	-18	-46	-1	-176	-192
Cash flow for the period	-26	0	118	-94	-85
Cash and cash equivalents at the beginning of the period	205	53	61	146	146
Translation differences in cash and cash equivalents	1	0	0	0	0
Cash and cash equivalents at the end of the period	180	52	180	52	61
Interest-bearing liabilities at the end of the period	879	1,018	879	1,018	1,020
Blocked cash at the end of the period	-9	-9	-9	-9	-9
Net debt	Note 7 691	957	691	957	949

GROUP EQUITY

	2019	2018	2018
(Condensed, amounts rounded to the nearest MSEK)	30 Sep	30 Sep	31 Dec
Opening balance	824	843	843
Profit/loss for the year	-333	19	21
Other comprehensive income for the period	80	-26	-41
New issue / warrants	2	-	-
Convertible loan	-	-	0
Closing balance	573	837	824

KEY PERFORMANCE INDICATORS FOR THE GROUP

	2019	2018	2019	2018	2018
	Q3	Q3	9 months	9 months	Full year
Operational key performance indicators
Installed capacity at the end of the period, MW	240.7	240.7	240.7	240.7	240.7
Own electricity production during the period, GWh	69.3	68.4	244.6	209.7	294.7
Number of employees at the end of the period	27	24	27	24	26
Financial key performance indicators
Earnings per share before dilution, SEK 1)	-0.48	1.38	-9.96	0.57	0.64
Earnings per share after dilution, SEK 1)	-0.48	1.38	-9.92	0.57	0.64
EBITDA margin, %	35.8%	60.0%	neg	57.1%	55.5%
Operating margin, %	3.7%	47.9%	neg	35.6%	34.4%
Return on capital employed (EBIT), %	neg	6.2%	neg	6.2%	6.6%
Return on adjusted capital employed (EBITDA), %	neg	10.2%	neg	10.2%	10.6%
Return on equity, %	neg	2.9%	neg	2.9%	2.6%
Capital employed, MSEK	1,264	1,793	1,264	1,793	1,773
Average capital employed, MSEK	1,529	1,802	1,529	1,802	1,795
Equity, MSEK	573	837	573	837	824
Average equity, MSEK	705	831	705	831	834
Net debt, MSEK	691	957	691	957	949
Equity/assets ratio, %	34.2%	40.8%	34.2%	40.8%	39.8%
Interest coverage ratio, times	0.1	3.5	neg	1.3	1.3
Debt/equity ratio, times	1.2	1.1	1.2	1.1	1.2
Equity per share, SEK	17	25	17	25	25
Equity per share after dilution, SEK	17	25	17	25	25
No. of shares at the end of the period, excl. treasury shares	33,491,376	33,373,876	33,491,376	33,373,876	33,373,876
Average number of shares	33,491,376	33,373,876	33,432,626	33,373,876	33,373,876
Average number of shares after dilution	33,491,376	33,933,876	33,572,626	33,933,876	33,933,876

1) Treasury shares held by the Company, amounting to 54,194 shares, have not been included in calculating earnings per share.

Note 1 - Net sales	2019	2018	2019	2018	2018
(Amounts rounded to the nearest MSEK)	Q3	Q3	9 months	9 months	Full year
Electricity income	22	25	82	74	101
Certificate income	7	14	24	40	50
Development and management income	29	111	100	139	192
	58	150	206	253	343

Net sales include i) income from electricity (the sale of generated electricity, and gains and losses from electricity and currency derivatives attributable to the hedged electricity production), ii) earned and sold electricity certificates and guarantees of origin, and iii) development income from projects sold and management income. The classification is based on an assessment of the nature of the income, the amount, timing and uncertainty surrounding income and cash flows. Income from electricity and income from electricity certificates are generated by the wind farms owned by the Group, which are recognised under Own wind power operations segment. Development and management income is primarily generated through the company's project portfolio and is recognised under the Development and management segment.

Note 2 - Other external expenses	2019	2018	2019	2018	2018
(Amounts rounded to the nearest MSEK)	Q3	Q3	9 months	9 months	Full year
Cost of sold projects and construction work	18	35	70	37	50
Other items	12	17	42	46	63
	30	52	112	83	113

Note 3 – Share of profits from associates	2019	2018	2019	2018	2018
(Amounts rounded to the nearest MSEK)	Q3	Q3	9 months	9 months	Full year
Share of profits in associates (net after tax, 21.4%)	-	-4	-	-19	-23
Adjustment to consolidated value	-	1	-	16	19
Realization loss on sale of associated companies	-1	-	-273	-	-
Financial income from associates (gross before tax)	-	7	-	21	28
Less uncapitalised share	-	-4	-	-18	-25
	-1	0	-273	0	0

Financial income from associates is attributable to granted shareholder loans.

GROUP SEGMENT REPORTING

Quarter 3	Develop. and management		Own wind power operations		Unallocated rev./exp.		Eliminations		Group
(Amounts to the nearest MSEK)	Q3-19	Q3-18	Q3-19	Q3-18	Q3-19	Q3-18	Q3-19	Q3-18	Q3-19	Q3-18
Net sales, external	29	111	29	39	-	-	-	-	58	150
Net sales, internal	1	1	-	-	-	-	-1	-1	-	-
Other operating income	0	0	0	0	0	0	-	-	0	0
Total income	30	112	29	39	0	0	-1	-1	59	150
Capitalised work on own account	1	0	-	-	-	-	-	-	1	0
Operating expenses	-26	-42	-9	-14	-3	-5	1	1	-37	-60
Share of profits from associates	-	-	-	-	-1	0	-	-	-1	0
Operating profit/loss before depr./imp. (EBITDA)	5	70	20	25	-4	-5	0	0	21	90
Depreciation/ impairment Note 4	0	0	-18	-18	0	-	-	-	-19	-18
Operating profit/loss (EBIT)	5	70	1	7	-4	-5	0	0	2	72
Net financial items	-4	-4	-14	-15	0	0	-	-	-18	-19
Profit/loss before tax (EBT)	1	66	-13	-8	-4	-5	0	0	-16	53
Property, plant and equipment	95	79	1,242	1,264	3	0	-	-	1,341	1,344

Fund managed by re:cap global investors and fund managed by BlackRock accounted for more than 10% of development and management income during the quarter and in the corresponding quarter in 2018 fund managed by re:cap global investors and fund managed by BlackRock accounted for more than 10%. There were no other customers who accounted for more than 10% of this income during the period.

Note 4 - Depreciation and impairment of property, plant and equipment

Depreciation and impairment	0	0	-18	-18	0	-	-	-	-19	-18
Impairment and reversal of impairment	-	-	-	-	-	-	-	-	-	-
Depreciation/amortisation	0	0	-18	-18	0	-	-	-	-19	-18

Impairment tests were conducted and indicated no impairment requirement. The tests were based in part on long-term market price forecasts for electricity and electricity certificates and a discount rate of 6.8%.

GROUP SEGMENT REPORTING

9 months	Develop. and management		Own wind power operations		Unallocated rev./exp.		Eliminations		Group
(Amounts to the nearest MSEK)	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Net sales, external	100	139	106	114	-	-	-	-	206	253
Net sales, internal	4	4	-	-	-	-	-4	-4	-	-
Other operating income	0	0	0	0	0	0	-	-	1	0
Total income	104	143	107	114	0	0	-4	-4	207	253
Capitalised work on own account	3	2	-	-	-	-	-	-	3	2
Operating expenses	-94	-60	-35	-39	-14	-16	4	4	-139	-110
Share of profits from associates	-	-	-	-	-273	0	-	-	-273	0
Operating profit/loss before depr./imp. (EBITDA)	12	85	72	75	-287	-16	0	0	-202	144
Depreciation/ impairment Note 5	0	0	-55	-54	-1	0	-	-	-57	-54
Operating profit/loss (EBIT)	12	85	17	21	-288	-16	0	0	-259	90
Net financial items	-12	-13	-49	-55	-21	1	-	-	-82	-67
Profit/loss before tax (EBT)	0	72	-32	-34	-309	-15	0	0	-341	24
Property, plant and equipment	95	79	1,242	1,264	3	0	-	-	1,341	1,344

Fund managed by BlackRock and fund managed by re:cap global investors accounted for more than 10% of development and management income during the period. In the corresponding period 2018 fund managed by BlackRock accounted for more than 10%. There were no other customers who accounted for more than 10% of this income during the period.

Note 5 – Depreciation and impairment of property, plant and equipment

Depreciation/amortisation	0	0	-55	-54	-1	0	-	-	-57	-54
Impairment and reversal of impairment	-	-	-	-	-	-	-	-	-	-
Depreciation and impairment	0	0	-55	-54	-1	0	-	-	-57	-54

Impairment tests were conducted and indicated no impairment requirement. The tests were based in part on long-term market price forecasts for electricity and electricity certificates and a discount rate of 6.8%.

Note 6 - Fair value of financial instruments

Fair value hierarchy

All financial instruments that are measured at fair value belong to Level 2 of the fair value hierarchy. Derivatives comprise electricity futures, currency futures and interest-rate swaps. Measuring the fair value of currency futures is based on published forward rates in an active market. The measurement of interest-rate swaps is based on forward interest rates derived from observable yield curves. The discounting does not have any material impact on the valuation of derivatives in Level 2. The recognition of financial instruments is described on pages 64-71 of the 2018 Annual Report. The table below presents the Group's financial assets and liabilities measured at fair value at the balance-sheet date.

	2019	2018	2018
(Amounts rounded to the nearest MSEK)	30 Sep	30 Sep	31 Dec
Assets
Derivatives held for hedging purposes
- Derivative assets	-	1	1
Liabilities
Derivatives held for hedging purposes
- Derivative liabilities	-78	-94	-117

Note 7 – Net debt

	2019	2018	2018
(Amounts rounded to the nearest MSEK)	30 Sep	30 Sep	31 Dec
Non-current liabilities	978	1,029	968
- of which interest-bearing non-current liabilities (excl. IFRS16 lease liabilities)	879	983	922
Current liabilities	126	187	277
- of which interest-bearing current liabilities	-	34	97
Long and short term interest bearing debt liabilities (excl. IFRS16 lease liabilities)	879	1,018	1,020
Cash and cash equivalents at the end of the period	-180	-52	-61
Blocked cash at the end of the period	-9	-9	-9
Net debt	691	957	949

IFRS16 lease liabilities amounted to MSEK 53 (0) on September 30, 2019.

PARENT COMPANY INCOME STATEMENT

	2019	2018	2019	2018	2018
(Amounts rounded to the nearest MSEK)	Q3	Q3	9 months	9 months	Full year
Sales of electricity and electricity certificates	8	9	32	61	76
Development and management income	25	6	91	19	40
Other operating income	0	0	0	0	0
Total income	33	16	124	80	116
Capitalised work on own account	0	0	2	0	1
Purchases of electricity and electricity certificates	-9	-9	-32	-61	-75
Cost of sold projects and construction work	-18	-1	-70	-3	-16
Personnel costs	-7	-7	-24	-23	-37
Other external expenses	-4	-4	-14	-13	-18
Operating profit/loss before depreciation (EBITDA)	-5	-6	-15	-19	-30
Depr. and impairment of property, plant and equipment	0	0	0	0	0
Operating profit/loss (EBIT)	-5	-6	-15	-19	-30
Financial income1)	0	28	2	320	368
Financial expenses2)	-18	-43	-368	-340	-384
Profit/loss after financial items	-22	-21	-382	-39	-47
Group contribution	-	-	49	-	-
Profit/loss before tax	-22	-21	-333	-39	-47
Tax on profit/loss for the period	0	-5	1	-7	-7
Net profit/loss for the year	-22	-27	-332	-46	-54

1) Includes dividends from subsidiaries of MSEK 0 (268) in 2019.

2) Includes a write down of shares in subsidiaries in 2019 of MSEK 70 (268) and a write-down of long-term receivables in associated companies of MSEK 244 (0) in 2019.

PARENT COMPANY BALANCE SHEET

	2019	2018	2018
(Condensed, amounts rounded to the nearest MSEK)	30 Sep	30 Sep	31 Dec
Property, plant and equipment	67	52	55
Non-current financial assets	1,152	1,677	1,648
Total non-current assets	1,219	1,729	1,703
Inventories	5	4	6
Other current assets	52	104	130
Cash and cash equivalents	153	39	41
Total current assets	211	147	177
TOTAL ASSETS	1,430	1,876	1,881
Restricted equity	8	8	8
Non-restricted equity	430	768	761
Total equity	438	776	769
Non-current interest-bearing liabilities	879	983	922
Total non-current liabilities	879	983	922
Current interest-bearing liabilities	-	34	97
Other current liabilities	112	82	93
Total current liabilities	112	117	190
TOTAL EQUITY AND LIABILITIES	1,430	1,876	1,881

PARENT COMPANY EQUITY

	2019	2018	2018
(Condensed, amounts rounded to the nearest MSEK)	30 Sep	30 Sep	31 Dec
Opening balance	769	822	822
Other comprehensive income for the period	-332	-46	-54
New issue / warrants	2	-	-
Convertible loan	-	-	0
Closing balance	438	776	769

EBITDA margin

EBITDA as a percentage of total income.

Operating margin EBIT as a percentage of total income.

Return on capital employed

Rolling 12-month EBIT as a percentage to average capital employed.

Return on adjusted capital employed

Rolling 12-month EBITDA as a percentage to average capital employed.

Return on equity Rolling 12-month net profit as a percentage to average equity.

Equity per share Equity divided by the average number of shares.

Equity per share after dilution Equity divided by the average number of shares after dilution.

Net financial items Financial income less financial expenses.

Average equity

Rolling 12-month average equity.

Average capital employed Rolling 12-month average capital employed.

Operating cash flow

Cash flow from operating activities after changes in working capital.

Net debt

Interest-bearing liabilities, excl. IFRS16 lease liabilities, less cash and blocked cash and cash equivalents.

Interest coverage ratio

Operating profit (EBIT) plus financial income in relation to financial expenses.

Debt/equity ratio Net debt as a percentage of equity.

Specific operating expenses, SEK per MWh Operating expenses for electricity production divided by electricity production during the period.

Equity/assets ratio

Equity as a percentage of total assets.

Capital employed Equity plus net debt.

DEFINITIONS OF KEY RATIOS GENERAL INFORMATION ABOUT KEY FIGURES

In its reporting, Arise applies key ratios based on the company's accounting. The reason that these key ratios are applied in the reporting is that Arise believes that it makes it easier for external stakeholders to analyse the company's performance.

ROUNDING

Figures in this interim report have been rounded while calculations have been made without rounding. Hence, it can appear like certain tables and figures do not add up correctly.