REG - HydrogenOne Cap Gwth - Q4 2024 Net Asset Value and Portfolio Update

Hydrogenone Capital GrowthAnnouncement

05/02/2025 07:00

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RNS Number : 9224V  HydrogenOne Capital Growth PLC  05 February 2025

LEI: 213800PMTT98U879SF45

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

5 February 2025

HydrogenOne Capital Growth plc

("HydrogenOne" or the "Company")

 

Q4 2024 Net Asset Value and Portfolio Update

 

HydrogenOne, the first London-listed fund investing in clean hydrogen for a
positive environmental impact, today announces its quarterly net asset value
and portfolio update for the period ended 31 December 2024 ("Q4 2024").

 

Q4 2024 Key Highlights

·    Net Asset Value ('NAV') per share of the Company of 90.39 pence,
12.2% lower than 31 December 2023 (102.99 pence); and 10.3% lower than 30
September 2024 (100.81 pence);

·    NAV for 31 December 2024 includes the write off of HH2E (8.4 pence
per share at 30 September 2024). The remaining portfolio continues to perform
in line with Investment Adviser expectations;

·    Private portfolio companies delivered an aggregate £85 million in
total revenue in the 12 months to 31 December 2024, an increase of 11%
compared to the 12 months to 31 December 2023, and an increased run-rate
compared to 30 September 2024, driven by supply chain demand;

·    Continued momentum in portfolio companies, with additional equipment
orders and funding at Sunfire, Elcogen and HiiROC underpinning their NAV
growth for shareholders;

·    Cash of £3.1 million as at 31 December 2024, including divestment
proceeds from Gen2 Energy, which completed in Q4 2024, and;

·    HydrogenOne announced that its Investment Adviser HydrogenOne Capital
LLP has entered into a conditional agreement to sell its business and assets
to a wholly owned subsidiary of Cordiant Capital Inc, a specialist global
infrastructure and real assets manager.

 

Net Asset Value

At 31 December 2024, the unaudited NAV per share of the Company was 90.39
pence, 10.3% lower than 30 September 2024 (100.81 pence), and a 12.2% decrease
since 31 December 2023 (102.99 pence).  NAV for 31 December 2024 includes the
write off of HH2E (8.4 pence per share at 30 September 2024). The Company had
net assets of £116.4 million as of 31 December 2024.

 

NAV Movements

 Opening NAV per share at 30 September 2024  100.81p
 HH2E                                        (8.37)p
 Other portfolio revaluation                 (1.12)p
 FX gains/(losses)                           (0.25)p
 Fund expenses                               (0.68)p
 Closing NAV per share at 31 December 2024   90.39p

Financial Summary

                                    30 Dec 24  30 Sep 24  Change   31 Dec 23  Change
 NAV                                £116.4m    £129.9m    (10.3)%  £132.7m    (12.2)%
 NAV per share                      90.39p     100.81p    (10.3)%  102.99p    (12.2)%
 Portfolio valuation                £113.5m    £129.2m    (12.2)%  £128.5m    (11.7)%
 Portfolio fair value gain on cost  £10.5m     £19.5m     (46.0)%  £16.9m     (37.9)%
 Cash and cash equivalents          £3.1m      £3.6m      (13.9)%  £4.7m      (34.0)%
 Other net liabilities              £(0.2)m    £(2.9)m    n/a      £(0.6m)    n/a

 

Portfolio Developments

 

Sunfire GmbH, the leading German industrial electrolyser producer of pressure
alkaline (AEL) and solid oxide electrolysers (SOEC): (28% of NAV)

 

·    Secured a contract with Ren-Gas for a 50 megawatt electrolyser for
Ren-Gas's e-methane plant in Tampere, Finland, adding to Sunfire's order book.
The equipment will consist of five 10 MW pressurised alkaline electrolysis
modules, to produce green hydrogen for renewable e-methane.  The plant will
yield approximately 200 gigawatt-hours ('GWh') of renewable fuel for heavy
road and maritime transport annually, as well as 180 GWh of carbon
dioxide-free district heating for Tampere's district heating system.

·    Post-quarter-end, Sunfire has secured €200 million in guaranteed
financing. The financing is to be provided by a consortium led by Commerzbank,
and includes Société Générale, BNP Paribas, LBBW and Ostsächsische
Sparkasse Dresden. The guarantee line will be used to secure customer advance
payments as well as contract fulfilment and warranty obligations. 80% of the
loan amount is secured by parallel default guarantees from the German Federal
Government and the Free State of Saxony, with the remaining 20% provided by
the banks themselves. The guarantee financing has a term of five years.

 

HiiROC, Thermal Plasma Electrolysis, for low cost, zero CO2 emission hydrogen
production: (21% of NAV)

 

·    HiiROC and Cemex Ventures announced the launch of low carbon hydrogen
deployment using HiiROC's proprietary Thermal Plasma Electrolysis technology.
Low carbon hydrogen will be produced at Cemex's cement plant in Rugby, UK, in
order to demonstrate commercial deployment of HiiROC technology. This follows
a similar deployment in conjunction with Centrica at Brigg, UK, in 2024.

·    HiiROC and Siemens signed a Memorandum of Understanding to provide
advanced control technology and ensure the safe automation of hydrogen
production. Under the agreement, HiiROC will leverage Siemens' control
technology and factory and automation expertise to ensure the safe, efficient
automation of hydrogen production and support in scaling.

·    HiiROC secured triple ISO certification from Lloyd's Register Quality
Assurance ('LRQA') for Quality Management (ISO 9001), Environmental Management
(ISO 14001), and Occupational Health and Safety (ISO 45001), as part of its
plans for commercial roll-out.

 

Elcogen, a global leader in solid oxide technology: (18% of NAV)

 

·    Elcogen was awarded a €24.9 million grant from the EU Innovation
Fund to advance green hydrogen production in Europe.  This grant will support
Elcogen's next phase in scaling up its manufacturing capacity of solid oxide
electrolyser cell and solid oxide fuel cell cells and stacks in Estonia to
support the energy transition and efficient production of green hydrogen.

·    Post-quarter-end, Elcogen was honoured with the Frost & Sullivan
2024 European Enabling Technology Leadership Award in the European Solid Oxide
Electrochemical Cell Industry.

·    In January 2025, Elcogen announced that it has secured a €5 million
investment from SmartCap, an Estonian state-owned venture capital fund
supporting Estonian 'greentech' companies.  This investment will contribute
to Elcogen's growth trajectory and will be instrumental in scaling its
operations, production capacity and business development.

 

Strohm Holding B.V, a Netherlands-based hydrogen pipeline company: (12% of
NAV)

 

·    Post-quarter-end, Strohm has been awarded a contract to supply 33km
of its thermoplastic composite pipe flowline for Saudi Aramco's Fadhili gas
plant in Saudi Arabia.  This is Strohm's first commercial contract for
onshore application in the region.  The project also marks the first time the
company will use its newly offered electrofusion coupler ('EFC'), a completely
non-metallic, welded and fully bonded joint that is corrosion free and enables
buried application as it requires no seals. The EFC is a cost-effective
solution, easier and faster to install on site than steel connectors.

 

Bramble Energy, a UK-based fuel cell and portable power solutions company: (9%
of NAV)

 

·    Bramble was announced as the winner of the Tech Innovation of the
Year, for 2024, in the UK Tech Awards.

·    Bramble Energy announced its latest milestone in PCBFC™
development, aiming at commercialisation of this fuel cell technology. Its
PCBFC™ technology has now entered the third generation from inception, with
a power density of 5.7 kW/L now achieved, and a target power density of 7.5
kW/L as the next step.

 

Investment Adviser's commentary

 

As announced in November 2024, portfolio company HH2E entered into
self-administration proceedings.  HH2E had been following a strategy of
developing its first project, at Lubmin, ahead of securing bankable offtake
agreement for the hydrogen production, and at the same time seeking additional
equity funding and bank debt for the construction of the project.  To this
end, a total of c. £59 million of shareholder loans had been provided to
HH2E, including c. £1 million from the Company.  On 7 November 2024, an
investment proposal to provide further funding for HH2E was not approved by
fellow investor Foresight, a development not expected by the Company.  As
previously disclosed, no recovery of the Company's investment is anticipated
through the insolvency process.  The Company valued HH2E in its 30 September
2024 unaudited results at £11 million of NAV (8.4 pence per share, 8% of
NAV), with an 11% shareholding in HH2E.

 

A number of individual hydrogen production projects have seen delays and
cancellations in 2024, against the backdrop of evolving regulations and a
challenging funding environment.  The Company's portfolio has been designed
to be resilient to business cycles, but does reflect these trends.  However,
the board of directors of the Company and the Investment Adviser believe that
the investment fundamentals for the hydrogen sector remain positive. At the
end of 2023, 1.4GW of green hydrogen was in production worldwide.  The
International Energy Agency recently updated expectations for green hydrogen
capacity worldwide to increase to 5GW in 2024, and announced that a further
20GW of green hydrogen production has now reached Final Investment Decision.

 

On 11 December 2024, the Company announced that the Investment Adviser had
entered into a conditional agreement to sell its business and assets to a
wholly owned subsidiary of Cordiant Capital Inc ('Cordiant'), a specialist
global infrastructure and real assets manager (the 'Transaction'). The Board
of the Company stated at the time of this announcement its support for the
Transaction.  Completion of the transaction is subject to certain regulatory
approvals, expected in early 2025, following which the Company will change its
name to Cordiant HydrogenOne plc.

 

The Investment Adviser and Cordiant believe that the Transaction will result
in an acceleration in the Company's market access and capabilities.
 Importantly, the Investment Adviser's senior management team and personnel
is expected to remain unchanged, with no impact on the existing management and
operations of the Investment Adviser and the Company expected. The Investment
Adviser and the Company will remain focused on advising on the portfolio and
managing cost base to deliver growth and maximise shareholder value.

 

Cordiant is a specialist global infrastructure and real assets investment
manager, with a sector-led approach to providing growth capital solutions to
promising mid-sized companies in Europe, North America and select global
markets, with over US$4 billion in committed capital under management. The
Cordiant group has experience in UK listed funds as investment manager to
Cordiant Digital Infrastructure Limited (CORD: LSE), which listed on the Main
Market of the London Stock Exchange in 2021 and has successfully raised and
deployed c. £800 million of equity.

 

The key contributors to movements in the quarterly NAV were the write-off of
HH2E, reducing NAV by 8.4 pence per share compared to 30 September 2024, with
additional negative impacts from higher discount rates, portfolio effects and
fund costs, totalling 2.1 pence per share, compared to 30 September 2024.

 

The Company has now completed the divestment of Gen 2 Energy, an early-stage
green hydrogen developer in Norway.  The exit divests the Company from its
smallest private investment, which represented 3% of the Company's NAV at 30
June 2024, which was c. £3 million.

 

The portfolio, excluding HH2E and Gen2 Energy, continued to perform in line
with the Investment Adviser's expectations.

 

During the 12 months to 31 December 2024, private portfolio companies
delivered an aggregate unaudited £85 million in revenue, an increase of 11%
compared to the 12 months to 31 December 2023 (£77 million).  Revenue growth
reflects the strong order books for supply chain equipment.

 

The portfolio weighted average discount rate at 31 December 2024 was 12.8%,
higher than 30 September 2024 (12.5%), decreasing NAV by 2.4 pence per share.
The portfolio weighted average discount rate at 31 December 2023 was 14.2],
higher than 31 December 2024, increasing 31 December 2024 NAV by 0.9 pence per
share.

 

At 31 December 2024, the Company has invested in a portfolio of private
investments, in the UK and Europe, representing 98 % of its invested portfolio
by value.  The Company has exited from its remaining listed holdings and its
focus is on private investments.

 

- Ends -

 

 

Further details on the Company's private investments can be found on its
website at:

https://hydrogenonecapitalgrowthplc.com/portfolio/private-investments
(https://url.uk.m.mimecastprotect.com/s/xSMWCGMXxsy04pMpcKfxTBI1KY?domain=hydrogenonecapitalgrowthplc.com/)
.

 

Factsheet and investor webinar

 

The 31 December 2024 factsheet is now available on the Company's website at:
https://hydrogenonecapitalgrowthplc.com/investors/factsheets/
(https://hydrogenonecapitalgrowthplc.com/investors/factsheets/) .

 

The Company's Investment Adviser, HydrogenOne Capital LLP, will be hosting a
live webinar presentation for investors and analysts to provide an update on
the Q4 2024 developments commencing at 11am GMT today.

 

In order to register for the webinar, please follow the link:
https://www.investormeetcompany.com/hydrogenone-capital-growth-plc/register-investor
(https://www.investormeetcompany.com/hydrogenone-capital-growth-plc/register-investor)
.

 

The presentation will also be available on the Company's website at:
https://hydrogenonecapitalgrowthplc.com/investors/documents-and-publications/
(https://hydrogenonecapitalgrowthplc.com/investors/documents-and-publications/)
.

 

Notes

 

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

 

 HydrogenOne Capital LLP                Tel: +44 (0) 20 3830 8231

 Investment Adviser
 Dr. JJ Traynor

 Richard Hulf

 Barclays Bank PLC - Corporate Broker   Tel: +44 (0) 20 7623 2323

 Dion Di Miceli                         BarclaysInvestmentCompanies@barclays.com

 Stuart Muress

 James Atkinson

 Burson Buchanan - Financial PR         Tel: +44 (0) 20 7466 5000

 Henry Harrison-Topham                  HGEN@buchanancomms.co.uk (mailto:HGEN@buchanancomms.co.uk)

 Henry Wilson

 Samuel Adams

 

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 with an ESG policy
integrated in investment decisions and asset monitoring.

 

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 or projects 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. HydrogenOne Capital LLP (FRN: 954060) is an appointed
representative of Thornbridge Investment Management LLP (FRN: 713859) which is
authorised and regulated by the Financial Conduct Authority.

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