7 May 2024
LEI: 213800B81BFJKWM2JV13
Octopus Renewables
Infrastructure Trust plc
("ORIT"
or the "Company")
Q1 2024 Factsheet and Net
Asset Value
The Board of Octopus Renewables
Infrastructure Trust plc announces that the unaudited Net Asset
Value ("NAV") of the Company as at 31 March 2024 on a cum-income
basis was £587.0
million or 103.90 pence per
Ordinary Share (31 December 2023: £599.0
million or 106.04 pence per Ordinary Share).
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Pence per Ordinary
Share*
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Audited NAV as at 31-Dec-23
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106.04
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Power Prices and Green
Certificates
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-0.92
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Inflation and FX
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-0.86
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Dividend paid in the
Quarter
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-1.45
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Other movements
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+1.09
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Unaudited NAV as at 31-Mar-24
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103.90
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*Totals may not sum exactly due to rounding
Power Prices and Green Certificates
ORIT continues to benefit from a
high proportion of fixed or contracted revenues and continues to
actively manage exposure to short-term variability in power prices.
As at 31 March 2024, 84% of ORIT's revenues over a 24-month period
were fixed or contracted to 31 March 2026 (31 December 2023: 81%
over the 24-month period to 31 December 2025).
Where prices are not fixed under power purchase
agreements ("PPAs") or otherwise hedged, the power prices used in
the valuations are based on market forward prices in the near term,
followed by an equal blend of two independent and widely used
market consultants' technology-specific capture price forecasts for
each asset.
During the quarter to 31 March 2024,
the forecast power prices used in ORIT's portfolio valuations
decreased on average leading to a reduction in the portfolio
valuation of £5.4 million or -0.96 pence per Ordinary Share. The
falls in power price forecasts were mainly over the
short-term.
Updates to market forecasts for
Green Certificates as well as signing a fixed price Green
Certificate contract in the near term for the Lincs Offshore wind
farm resulted in a valuation uplift of £0.2 million or 0.04 pence
per Ordinary Share.
Post-period, the Crossdykes wind
farm in Lanarkshire, Scotland, signed a PPA with Sky UK Limited,
who will purchase 69% of the output at a CPI-linked fixed price for
a period of 10 years from 1 April 2025. The agreement increases the
percentage of ORIT's forecast revenue which is fixed over the two
years to 31 March 2026 to 85%. The PPA is also NAV-accretive when
compared with the power price assumptions included in the NAV as at
31 March 2024 and would have resulted in an uplift of +0.95 pence
per Ordinary Share had signing occurred before the valuation
date.
Inflation1 and FX
ORIT retains a high proportion of
inflation-linked cash flows with 45% of revenues over a 10
year-period to 31 March 2034 explicitly linked to inflation. The
percentage of forecast revenue which is index-linked increases from
45% to 48% following the signing of the Crossdykes PPA with
Sky.
During the quarter, inflation
forecasts decreased on average across markets in which ORIT's
assets are located. These updates resulted in a net valuation
decrease of -£2.3 million, mostly related to reduced RPI forecasts
for the Company's UK assets.
During the quarter, sterling
appreciated slightly against the Euro, leading to a valuation
impact of -£2.6 million (including the impact of currency
hedges at the Company level).
The combined impact of inflation and
foreign exchange movements was a valuation decrease of -£4.9
million or -0.86 pence per Ordinary
Share.
Dividend2
The interim dividend (£8.2 million
or 1.45 pence per Ordinary Share) in respect of Q4 2023 was paid in
the quarter, taking the total dividend for the financial year from
1 January 2023 to 31 December 2023 ("2023 Dividend") to 5.79 pence
per ordinary share, meeting the Company's stated target.
The 2023 Dividend was fully covered by cashflows
arising from the Company's operating assets.
In line with the Company's
progressive dividend policy, in January 2024 the Board announced an
increase in the target dividend to 6.02p per ordinary share for the
financial year from 1 January 2024 to 31 December 2024 ("FY
2024").
This increase of 4.0% over the 2023
Dividend is in line with the increase to the Consumer Price Index
(CPI) for the 12 months to 31 December 2023, and marks the third
consecutive year the Company has increased its dividend target in
line with inflation. The FY 2024 dividend target is expected to be
fully covered by cashflows generated from the Company's operating
portfolios.
Other movements
An increase of +£6.2 million or
+1.09 pence per Ordinary Share was recorded from other valuation
movements. +£12.2 million of this movement reflects the net present
value of future cashflows being brought forward from 31 December
2023 to 31 March 2024. This was offset by the remaining other
amounts of -£6.0 million, which mostly reflects the Company's
operating and transaction costs including RCF interest.
Gearing
As at 31 March 2024, ORIT had total
gearing (total debt drawn as a % of gross asset value
("GAV"3) of
46.6% (39.1% as at 31 December 2023). The increase in leverage
during the quarter is following completion of the acquisition of
four out of the five Irish solar sites from Statkraft
Ireland.
Notes
1
The unaudited 31 March 2024 valuation includes (i) recent consensus
UK inflation forecasts published by HM Treasury in February 2024;
and (ii) inflation forecasts for the relevant European countries
published by the European Commission in February 2024.
2
The dividend target stated in this announcement is a target only
and not a profit forecast. There can be no assurance that this
target will be met, or that the Company will make any distributions
at all and it should not be taken as an indication of the Company's
expected future results. The Company's actual returns will depend
upon a number of factors, including but not limited to the
Company's net income and level of ongoing charges. Accordingly,
potential investors should not place any reliance on this target
and should decide for themselves whether or not the target dividend
is reasonable or achievable. Investors should note that references
in this announcement to "dividends" and "distributions" are
intended to cover both dividend income and income which is
designated as an interest distribution for UK tax purposes and
therefore subject to the interest streaming regime applicable to
investment trusts.
3
"Gross Asset Value" means the aggregate of (i) the fair value of
the Company's underlying investments (whether or not subsidiaries),
valued on an unlevered basis, (ii) the relevant assets and
liabilities of the Company (including cash) valued at fair value
(other than third party borrowings) to the extent not included in
(i) or (ii) above.
Factsheet
The Company's Q1 2024 factsheet has
been published today and is available to download at:
https://www.octopusrenewablesinfrastructure.com/all-reports-publications
For
further information please contact:
Octopus Energy Generation (Investment Manager)
Chris Gaydon, David Bird
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Via Buchanan
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Peel Hunt (Broker)
Liz Yong, Luke Simpson, Huw Jeremy
(Investment Banking)
Alex Howe, Chris Bunstead, Ed
Welsby, Richard Harris, Michael Bateman (Sales)
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020 7418 8900
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Buchanan (Financial PR)
Charles Ryland, George
Beale
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020 7466 5000
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Apex Listed Companies Services (UK) Limited (Company
Secretary)
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020 3327
9720
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Notes to editors
About Octopus
Renewables Infrastructure Trust
Octopus Renewables Infrastructure Trust
("ORIT") is a premium-listed, closed-ended investment company
incorporated in England and Wales focused on
providing investors with an attractive and sustainable level of
income returns, with an element of capital growth, by investing in
a diversified portfolio of renewable energy assets
in Europe and Australia. As an impact fund, ORIT is
helping accelerate the transition to net zero by investing in green
energy, whilst also contributing to a broader set of UN Sustainable
Development Goals through its impact initiatives. ORIT's investment
manager is Octopus Energy Generation.
Further details can be found
at www.octopusrenewablesinfrastructure.com
About Octopus
Energy Generation
Octopus Energy Generation is driving
the renewable energy agenda by building green power for the future.
Its specialist renewable energy fund management team invests in
renewable energy assets and broader projects helping the energy
transition, across operational, construction and development
stages. The team was set up in 2010 based on the belief that
investors can play a vital role in accelerating the shift to a
future powered by renewable energy. It has a 13-year track record
with approximately £6.7 billion of assets under management (AUM)
(as of 31 December 2023) across 16 countries and total 3.9GW. These
renewable projects generate enough green energy to power 2.4
million homes every year, the equivalent of taking over 1.2 million
petrol cars off the road. Octopus Energy Generation is the trading
name of Octopus Renewables Limited.
Further details can be found
at www.octopusenergygeneration.com