REG - HydrogenOne Cap Gwth - Q3 2022 Factsheet and NAV update

Hydrogenone Capital GrowthAnnouncement

16/11/2022 07:00

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RNS Number : 5273G  HydrogenOne Capital Growth PLC  16 November 2022

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION OR SOLICITATION TO
PURCHASE SHARES IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

16 November 2022

Q3 2022 Factsheet and NAV update

HydrogenOne Capital Growth plc ("HydrogenOne" or the "Company"), the first
London-listed fund investing in clean hydrogen for a positive environmental
impact, provides a quarterly update for the period ended 30 September 2022.

Key highlights

·      Policy makers around the world have continued to demonstrate
support for the energy transition through a number of new significant energy
investment and policy actions, including the Inflation Reduction Act in the
United States and the Important Project of Common European Interest in the
European Union;

·      Net Asset Value ("NAV") per share as at 30 September 2022 was
96.49p, broadly similar to the previous quarter (30 June 2022: 96.85p);

·      There was a positive impact of 1.51p (1.5%) on the NAV per share
from the re-valuation of multiple positions in the Company's private
investments (before the application of revised discount rates);

·      Higher yields on Government bonds have resulted in increased
discount rates for the Company, negatively impacting NAV per share by 1.43p;

·      £103.2m invested to date in low-carbon growth, including £8.4m
in a new private equity position in Strohm Holding B.V., bringing the number
of private portfolio positions to nine;

·      Total net assets of £124.3m at the end of the quarter;

·      Cash reserves of £22.4m at the end of the quarter, including the
deployment of £8.4m capital in Strohm Holding B.V., divestment proceeds on
listed equities, and fund-related costs; and

·      As part of its strong ESG commitment, the Company is now
classified as an Article 9 Fund under the EU Sustainable Finance Disclosure
Regulation and EU Taxonomy Regulation and has become a signatory of the United
Nations-supported Principles for Responsible Investment ("PRI").

Chairman, Simon Hogan, commented:

"The Company's invested private businesses continued to make steady progress
in the quarter as we deployed further capital within the over £500 million
pipeline of high-quality private equity opportunities we've identified.
Additionally, we were pleased to see further supportive investment and
legislative changes in the hydrogen industry, driving the energy transition.
We reaffirmed our sustainable investment objectives by classifying as an
Article 9 fund and becoming a signatory of the PRI, which we will continue to
hold at the centre of our investment decisions going forward."

 

Financial summary

Heightened macro-economic volatility has resulted in a challenging environment
for investors to determine the impact of key valuation inputs. The Company's
valuation reflects the following factors:

 

·      The Company continues to use conservative assumptions when
valuing its private assets;

·      Stable performance of portfolio companies, despite macro-economic
headwinds from supply chain delays and higher energy prices;

·      Significant weakening of Sterling against the US dollar and the
Euro; and

·      Substantial increase in long-term government bond yields over the
last six months, particularly in the UK where government bond yields increased
sharply over the course of September. The Company aligns country-specific bond
yields to its discount rate calculations over the projected investment period
for each private invested position. This has led to an increase in the
portfolio's weighted average discount rate to 12.84% (30 June 2022: 12.38%).

 

Breakdown of the movement in NAV per share:

 

 Net Asset Value per share as at 30 June 2022 (unaudited)  96.85p
 Listed Portfolio return (incl FX)                         0.02p
 Private equity portfolio return
 Net impact of performance (incl FX and inflation)         1.51p
 Impact of discount rate change                            (1.43)p

 Other fund expenses                                       (0.46)p

 Net Asset Value per share as at 30 Sept 2022 (unaudited)  96.49p

 

Notes:

The NAV calculation is based on the Company's issued ordinary share capital as
at 30 September 2022 of 128,819,999 ordinary shares.

The Company's cash reserves decreased by £7.5m from the previous quarter to
£22.4m, largely as a result of the deployment of £8.4m in a new private
equity position in Strohm Holding B.V ("Strohm"), divestment proceeds on
listed equities and fund-related costs. Total net assets decreased by 0.4%
from the previous quarter to £124.3m.

Key portfolio developments

The Company's invested private businesses continued to make strong progress in
the quarter:

·    Sunfire GmbH, a German industrial electrolyser producer:

o  Successfully completed the EU funded project Green Hydrogen for Green
Steel, the world's largest high temperature electrolyser with a record
production of almost 100 tons of green hydrogen for the climate-neutral
production of green steel.

·    Bramble Energy Limited, a UK-based fuel cell and portable power
solutions company:

o  Awarded UK Government funding to help decarbonise the maritime sector; and

o  Secured funding from the Advanced Propulsion Centre as part of the
Automotive Transformation Fund - a programme supporting large-scale
industrialisation to build electrified supply chains in the UK.

·    Cranfield Aerospace Solutions Ltd, a UK-based passenger flight
innovator powering turboprop flight with hydrogen:

o  Secured investment from the Strategic Development Fund, the investment arm
of the Tawazun Economic Council of the UAE, and Motus Ventures, taking the
current investment round to £14.4 million.

·    NanoSUN Limited, a UK-based developer of hydrogen distribution and
mobile refuelling equipment:

o  Launched its new hydrogen cooling technology to deliver a reliable,
low-cost, cooling solution for operators of hydrogen transport vehicles and
static hydrogen refuelling stations; and

o  Signed an agreement with Czech Republic Partner Hydrogen Systems to
deliver sustainable hydrogen refuelling solutions to central Europe.

·    HH2E AG, a German green hydrogen project developer with a focus on
industrial customers:

o  Continued with proposed development plans of its clean hydrogen projects
in Germany.

·    Gen2 Energy AS, a Norwegian green hydrogen project developer:

o  Continued with development plans of its two production facilities for
large scale production and shipping of green hydrogen in Mosjoen, Norway: 100
MW facility in Nesbruket and 500 MW facility in Holandsvika.

New investments in the quarter

During the quarter, the Company continued to deploy capital in high quality
private equity positions and has further developed its >£500m pipeline of
opportunities. A new £8.4m private investment in offshore hydrogen and CO(2)
pipeline leader Strohm was completed bringing the number of private portfolio
positions to nine.

In total, an aggregate of £103.2m capital has been invested to date in
low-carbon growth.

ESG

The Company is committed to delivering an attractive level of capital growth
by investing, directly or indirectly, in a diversified portfolio of hydrogen
and complementary hydrogen focused assets, whilst contributing to climate
change mitigation by integrating core ESG principles into its decision making
and ownership process.

During the quarter, the Company was pleased to classify as an Article 9 Fund
under the EU Sustainable Finance Disclosure Regulation and EU Taxonomy
Regulation, reaffirming the Company's sustainable investment objective and
commitment to reporting greenhouse gas emissions and avoided greenhouse gas
emissions on an annual basis. The Company also became a signatory of the PRI.

Market outlook

During the quarter, policy makers around the world continued to demonstrate
support for the energy transition through a number of significant energy
investment and policy actions expected to act as a catalyst for further
investment. These include the US$369 billion for climate and energy proposals
and tax credit of up to US$3 per kg for "qualified clean hydrogen" depending
on the life cycle GHG emissions, introduced by the Inflation Reduction Act
(the "IRA") in the US. The proposed tax credit essentially sets the price for
green hydrogen and thus removes a key hurdle for investment. In addition to
the IRA, the announced H2Hubs programme in the US includes up to US$7 billion
to establish 6-10 regional clean hydrogen hubs across the country.

In Europe, the announced approval of the Important Project of Common European
Interest (the "IPCEI") for the hydrogen value chain, is expected to unlock up
to EUR 5.4 billion in funding from member states and a further EUR 8.8 billion
in private investment. The European Commission has also launched a European
Hydrogen Bank, proposed to deploy EUR 3 billion in the hydrogen market.

NAV reporting frequency

At launch, the Company adopted a policy of publishing daily Net Asset Value
per Ordinary Share, based on the quarterly valuations of the Private Hydrogen
Assets and the daily valuations of the Listed Hydrogen Assets. Now that the
weighting to Listed Hydrogen Assets is c. 3%, and following consultation with
a number of shareholders, the Company is adopting a quarterly NAV reporting
cycle with immediate effect. The next quarterly NAV will therefore be as at 31
December 2022.

The Company's last daily unaudited NAV per ordinary share was therefore as at
14 November 2022 and was 96.24 pence (using the 30 June 2022 Private Hydrogen
Assets valuation). This valuation is updated to an unaudited NAV per ordinary
share of 96.40 pence when using the 30 September 2022 Private Hydrogen Assets
valuation.

Factsheet

The 30 September 2022 factsheet is now available on the Company's website:
https://hydrogenonecapitalgrowthplc.com/investors/factsheets/.

 

The Company's LEI is 213800PMTT98U879SF45.

 

For further information, please visit www.hydrogenonecapitalgrowthplc.com
(http://www.hydrogenonecapitalgrowthplc.com) or contact:

 

 HydrogenOne Capital LLP - Investment Adviser              +44 20 3830 8231
 Dr. JJ Traynor/Richard Hulf

 Eva Bezruchko

 Panmure Gordon - Corporate Broker and Financial Adviser
 Tom Scrivens                                              +44 20 7886 2500

 Alex Collins

 FTI Consulting - Media Enquiries                          +44 20 3727 1725

 Matthew O'Keeffe                                          +44 78 1492 1439

 Cally Billimore                                           hygen@fticonsulting.com

 

About HydrogenOne:

HydrogenOne is the first London-listed hydrogen fund investing in clean
hydrogen for a positive environmental impact. The Company was launched in 2021
with an investment objective to deliver an attractive level of capital growth
by investing in a diversified portfolio of hydrogen and complementary hydrogen
focussed assets. INEOS Energy is a strategic investor in HydrogenOne. The
Company is listed on the London Stock Exchange's main market (ticker code:
HGEN). The Company is an Article 9 climate impact fund.

IMPORTANT NOTICE

This announcement does not constitute an offer to sell, or the solicitation of
an offer to acquire or subscribe for, shares in the Company in any
jurisdiction. The distribution of this announcement outside the UK may be
restricted by law. No action has been taken by the Company that would permit
possession of this announcement in any jurisdiction outside the UK where
action for that purpose is required. Persons outside the UK who come into
possession of this announcement should inform themselves about the
distribution of this announcement in their particular jurisdiction.

This announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's plans and/or the plans of one or more
of its investee companies and their respective current goals and expectations
relating to their respective future financial condition and performance and
which involve a number of risks and uncertainties. The Company cautions
readers that no forward- looking statement is a guarantee of future
performance and that actual results could differ materially from those
contained in the forward- looking statements.

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014, as it forms part of UK domestic law ("MAR"). Upon
publication of this announcement, the inside information is now considered to
be in the public domain for the purposes of MAR. The person responsible for
arranging the release of this announcement on behalf of the Company is
HydrogenOne Capital LLP.

 

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