TIDMHEIT
RNS Number : 6759W
Harmony Energy Income Trust PLC
22 August 2022
22 August 2022
Harmony Energy Income Trust plc
("HEIT" or the "Company")
Net Asset Value and Portfolio Update
Harmony Energy Income Trust plc, an externally managed company
that invests in energy storage assets in Great Britain, today
announces that its Net Asset Value ("NAV") as at 31 July 2022 was
116.21p per share.
Highlights
-- NAV increased by 6.72% to GBP244.05 million, or 116.21 pence
per share, up 7.32 pence per share over the three months from 30
April 2022;
-- NAV increase for this quarter is primarily driven by:
a) the acquisition on 29 July 2022 by the Company of the first
pipeline project from Harmony Energy Limited: Bumpers (99 MW / 198
MWh) at a discount to fair market value; and
b) the revaluation of both the Bumpers and Little Raith (49.5 MW
/ 99 MWh) projects to reflect lower risk as these projects are now
categorised as "under construction". Contracts with Tesla were
signed on 30 June 2022 (Little Raith) and 29 July 2022 (Bumpers),
with target commercial operations dates of September 2023 (Bumpers)
and October 2023 (Little Raith);
-- Revenue projections have not been revised since 30 April
2022. Next revision due 31 October 2022;
-- 1 pence per Ordinary Share dividend paid on 29 July 2022, as
per the timetable forecast at IPO, taking NAV Total Return in the
period to 7.64%. The Company remains on track to meet its target
returns of paying a 2 pence per Ordinary Share dividend in 2022,
increasing to 8 pence per Ordinary Share in 2023;
-- Target commercial operations date of Pillswood project remains on track for November 2022;
-- GBP60 million debt facility with NatWest agreed on 21 June
2022, which will facilitate the construction of the Bumpers
project; and
-- Company expects pipeline of c.500 MW "shovel ready" projects
ready for acquisition (subject to financing and due diligence) by
the end of 2022, with some projects capable of acquisition during
Q4.
Portfolio Update
The construction of the Portfolio continues to progress well and
the company is on track to deliver target returns in 2022 and 2023.
All projects within the Portfolio are now categorised as "under
construction" and targeting to commence operations in accordance
with the table below (which, other than the change in status in
relation to Little Raith and Bumpers, remain unchanged from 30
April 2022).
Project MW / MWh Location Target Commercial Status
Operations Date
Pillswood 98 / 196 Yorkshire November 2022 Under Construction
----------- --------- ----------------- ------------------
Broadditch 11 / 22 Kent December 2022 Under Construction
----------- --------- ----------------- ------------------
Farnham 20 / 40 Surrey March 2023 Under Construction
----------- --------- ----------------- ------------------
Rusholme 35 / 70 Yorkshire March 2023 Under Construction
----------- --------- ----------------- ------------------
Bumpers 99 / 198 Bucks. September 2023 Under Construction
----------- --------- ----------------- ------------------
Little Raith 49.5 / 99 Fife October 2023 Under Construction
----------- --------- ----------------- ------------------
Total 312.5 / 625
----------- --------- ----------------- ------------------
On the Company's Pillswood project, steel platforms are being
made ready to receive the first batch of Tesla Megapacks which are
expected to arrive on site by the end of August.
By end of 2022, the Company expects to have 109 MW of operating
projects, 203.5 MW "under construction" and a pipeline of c.500 MW
"shovel ready" projects ready for acquisition (subject to financing
and due diligence), with a number of these being capable of
acquisition during Q4. These pipeline projects benefit (or will
benefit) from near-term grid energisation dates ranging from Q3
2023 to Q4 2024. All pipeline projects are expected to be at least
2-hour duration battery systems.
Market Commentary
The strong revenue performance of battery storage assets in
Great Britain has continued through the quarter, with average
monthly revenues hitting record levels in June and July 2022.
Ancillary Service pricing has remained strong, and the 2-hour
duration batteries continue to benefit from strong pricing in the
Dynamic Regulation service. Wholesale trading volumes remained low
compared to winter months, but some batteries (especially those
with more than 1-hour duration) still benefited from some large
wholesale spread opportunities: On 18th July 2022, the unusually
hot weather and low levels of forecast wind generation prompted
National Grid ESO to issue Capacity Market Notices (later
cancelled), and this pushed the GB evening wholesale peak price as
high as GBP647/MWh. The overall market outlook remains strong with
high gas prices forecast to continue until 2026.
NAV Update for the period ended 31 July 2022
The Company's NAV as at 30 April 2022 was GBP228.69 million
(108.90 pence per share). As at 31 July 2022, the unaudited NAV is
calculated to have increased by 6.72% to GBP244.05 million (116.21
pence per share), up 7.32 pence per share over the three months
from 30 April 2022.
This increase was largely driven by (a) the acquisition of the
Bumpers project (99 MW / 198 MWh) at a discount to fair market
value (as supported by the independent valuer's opinion); and (b)
the revaluation of both the Little Raith and Bumpers projects by
virtue of the Company executing EPC, O&M and revenue
optimisation contracts with Tesla during the period, thereby
allowing the projects to be categorised as "under construction".
The payment of the 1 pence per Ordinary Share dividend on 29 July
2022 offset some of these increases.
Revenue projections have not been revised since 30 April 2022,
with the next revision due in the coming quarter.
Max Slade, Commercial Director of Harmony Energy Advisors
Limited, commented: "This announcement reiterates the positive news
previously announced by the Company during the quarter, including
the interim results published on 28 June. The Company has achieved
so much during 2022 and we are pleased to continue meeting our
targets and delivering positive NAV growth for the shareholders. We
now look forward to completing construction and commencing
operations on the Pillswood project in the coming months. We will
provide further updates in due course."
The Company's factsheet for 31 July 2022 is available on the
Company's website at:
https://www.heitp.co.uk/sites/camarcoir/files/2022-08/heit-plc-fact-sheet-q3-2022.pdf
END
For further information, please contact:
Harmony Energy Advisors Limited
Paul Mason
Max Slade
Peter Kavanagh
James Ritchie
info@harmonyenergy.co.uk
Berenberg
Gillian Martin
Ben Wright
Ciaran Walsh
Dan Gee-Summons +44 (0)20 3207 7800
Camarco
Eddie Livingstone-Learmonth
Georgia Edmonds +44 (0)20 3757 4980
JTC (UK) Limited
Uloma Adighibe
Harmony.CoSec@jtcgroup.com +44 (0)20 3832 3877
LEI: 254900O3XI3CJNTKR453
About Harmony Energy Advisors Limited (the "Investment
Adviser")
The Investment Adviser is a wholly owned subsidiary of Harmony
Energy Limited. The Investment Adviser is an appointed
representative of Laven Advisors LLP, which is authorised and
regulated by the Financial Conduct Authority.
The management team of the Investment Adviser have been
exclusively focussed on the energy storage sector (across multiple
projects) in Great Britain for over six years, both from the point
of view of asset owner/developer and in a third-party advisory
capacity.
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