REG - Renew Infra Grp Ld - Net Asset Value - Q2 2024

Renewables InfrastructureAnnouncement

02/08/2024 07:00

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RNS Number : 8943Y  Renewables Infrastructure Grp (The)  02 August 2024

 

 

2 August 2024

The Renewables Infrastructure Group Limited

"TRIG" or "the Company", a London-listed investment company advised by
InfraRed Capital Partners ("InfraRed") as Investment Manager and Renewable
Energy Systems ("RES") as Operations Manager.

Net Asset Value - Q2 2024

TRIG announces an estimated unaudited Net Asset Value ("NAV") per share as at
30 June 2024 of 123.4 pence, a decrease of 1.6 pence per share from the
Company's last announced NAV as at 31 March 2024. This reduction in NAV
principally reflects below budget generation and downward movement in
project-level revenue forecasts, mitigated by the expected profit on the
disposal of a partial stake in Gode offshore wind farm which was signed after
the period end.

The TRIG Board reaffirms that the Company remains on track to pay the target
dividend for FY 2024 of 7.47 pence per share(1).

The Board and Managers continue to emphasise responsible management of TRIG's
balance sheet to create greater capacity for future investment activities.
Significant progress has been made towards reducing floating rate borrowings
under the Company's Revolving Credit Facility ("RCF") through the application
of sale proceeds from asset disposals, with transactions signed over the past
12 months providing aggregate proceeds of £210m at an average 11% premium to
carrying value.

Given the significant progress made in respect of TRIG's capital allocation
priorities and the attractive investment opportunity presented by TRIG's
shares trading at a significant discount to the Company's Net Asset Value, the
Board announced on 1 August 2024 that it has allocated up to £50m to a
12-month share buyback programme that will commence following the release of
the 2024 Interim Results later this month.

The key drivers of the movement in NAV per share over the quarter are
summarised in the table below:

                                              Net Asset Value (pence per share)  Positive Movements  Negative Movements
 NAV per share at 31 March 2024               125.0p
 Q2 Portfolio generation                                                                             (0.8p)
 Divestment activity                                                             0.3p
 Q2 Inflation and foreign exchange movements                                                         (0.4)p
 Changes to revenue forecasts                                                                        (0.7)p
 NAV per share at 30 June 2024(2)             123.4p

 

Q2 portfolio generation

In aggregate, generation in the period was below forecast due to:

-     Third-party owned cable outages at two UK offshore wind farms,
Hornsea One and East Anglia 1. The outage at Hornsea One has now been
resolved. Remedial works have been scheduled for East Anglia 1 and commercial
protection is in place for future losses relating to this outage;

-     Lower weather resource in some regions, particularly in Sweden; and

-     High hydro levels in Spain significantly increasing the incidence of
negative price events during which the Company's Cadiz projects curtailed
generation. Participation in ancillary services insulated the Valdesolar
project from this H1 2024 effect.

In the quarter, the Ranasjö and Salsjö onshore wind farms in Sweden were
both commissioned, adding 121MW net capacity to TRIG's portfolio, further
strengthening and diversifying the Company's revenues.

Inflation and foreign exchange movements

Across the markets TRIG invests in, headline inflation has been coming down
from the highs of 2022-2023 to levels generally at or around central bank
targets. Inflation is expected to continue to slow and the forecast UK
inflation for full year 2024 used by the Company in the valuation of the
portfolio has been reduced slightly.

Net movement of foreign exchange during the quarter had nil impact on the
Company's NAV.

Changes to revenue forecasts

During the quarter, the significant movements in project-level revenue
forecasts were:

-     Wholesale power prices (+0.2p per share in the quarter): Power price
forecasts increased during the quarter, with short-term pricing recovering
some of the reductions seen in Q1 as forecast gas prices increased. The
recovery in pricing in Sweden and Spain was less than in other markets due to
sustained higher-than-average hydro reserves.

-     Guarantees of origin certificate pricing (-0.5p per share in the
quarter): Pricing of European Guarantees of Origin certificates, in
particular, has fallen back from recent highs as elevated hydro reserves in
Sweden and Spain have impacted supply levels.

-     Batteries valuation adjustment (-0.3p per share in the quarter): An
adjustment has been made to the carrying value of the development-stage
battery projects purchased by TRIG in 2022 following a reduction in battery
revenue forecasts.

Note: the above does not sum to the (0.7p) impact shown in the table above due
to rounding differences.

 

(1) Past performance is not a reliable indicator of future results. There can
be no assurance that targets will be met or that the Company will make any
distributions, or that investors will receive any return on their capital.
Capital and income at risk.

(2) NAV per share at 30 June 2024 presented after unwind of the discount rate,
company costs and payment of the first quarterly interim dividend.

Enquiries

InfraRed Capital Partners
Limited                        +44 (0) 20 7484 1800

Minesh Shah

Phil George

Mohammed Zaheer

 

Brunswick
+44 (0) 20 7404 5959 / TRIG@brunswickgroup.com

Mara James

 

Investec Bank
Plc
+44 (0) 20 7597 4000

Lucy Lewis

Tom Skinner

 

BNP
Paribas
+44 (0) 20 7595 9444

Virginia Khoo

Carwyn Evans

Notes

The Company

The Renewables Infrastructure Group ("TRIG" or the "Company") is a leading
London-listed renewable energy infrastructure investment company. The Company
seeks to provide shareholders with an attractive long-term, income-based
return with a positive correlation to inflation by focusing on strong cash
generation across a diversified portfolio of predominantly operating projects.

 

TRIG is invested in a portfolio of wind, solar and battery storage projects
across six countries in Europe with aggregate net generating capacity of
2.8GW; enough renewable power for 1.9 million homes and to avoid 2.3 million
tonnes of carbon emissions per annum. TRIG is seeking further suitable
investment opportunities which fit its stated Investment Policy.

 

Further details can be found on TRIG's website at www.trig-ltd.com
(http://www.trig-ltd.com) .

 

Investment Manager

 

InfraRed Capital Partners is an international infrastructure investment
manager, with more than 160 professionals operating worldwide from offices in
London, New York, Sydney, Seoul and Madrid. Over the past 25 years, InfraRed
has established itself as a highly successful developer and custodian of
infrastructure assets that play a vital role in supporting communities.
InfraRed manages US$13bn+ of equity capital(1) for investors around the
globe, in listed and private funds across both income and capital gain
strategies.

A long-term sustainability-led mindset is integral to how InfraRed operates as
it aims to achieve lasting, positive impacts and deliver on its vision of
Creating Better Futures. InfraRed has been a signatory of the Principles of
Responsible Investment since 2011 and has achieved the highest possible PRI
rating(2) for its infrastructure business for seven consecutive assessments,
having secured a 5-star rating for the 2023 period(3). It is also a member of
the Net Zero Asset Manager's Initiative and is a TCFD supporter.

InfraRed is part of SLC Management, the institutional alternatives and
traditional asset management business of Sun Life. InfraRed represents the
infrastructure equity arm of SLC Management, which also incorporates
BentallGreenOak, a global real estate investment management adviser, and
Crescent Capital, a global alternative credit investment asset manager.

Further details can be found on InfraRed's website at www.ircp.com
(http://www.ircp.com/)

 

 

(1) Uses 5-year average FX as at 31st March 2024 of GBP/USD of 1.2839; EUR/USD
1.1179. EUM is USD 12.927bn

 

(2) Principles for Responsible Investment ("PRI") ratings are based on
following a set of Principles, including incorporating ESG issues into
investment analysis, decision-making processes and ownership policies. More
information is available at https://www.unpri.org/about-the-pri

(3 (https://www.unpri.org/about-the-pri%C2%A0%0d3) ) ( )In the 2023
Principles for Responsible Investment ("PRI") assessment, InfraRed achieved a
5 star rating for the Policy Governance and Strategy and Infrastructure and a
4 star rating for the newly created Confidence Building Measures. Please find
InfraRed's report available for download on our website
here: https://www.ircp.com/sustainability/
(https://www.ircp.com/sustainability/)

Operations Manager

TRIG's Operations Manager is RES ("Renewable Energy Systems"), the world's
largest independent renewable energy company.

RES is the world's largest independent renewable energy company, working
across 24 countries and active in wind, solar, energy storage, biomass, hydro,
green hydrogen, transmission, and distribution. An industry innovator for over
40 years, RES has delivered more than 24GW of renewable energy projects across
the globe and plans to bring more than 22GW of new capacity online in the next
five years.

As a service provider, RES has the skills and experience in asset management,
operations and maintenance (O&M), and spare parts - supporting 41GW of
renewable assets across 1,300 sites. RES brings to the market a range of
purposeful, practical technology-based products and digital solutions designed
to maximise investment and deployment of renewable energy. RES is the power
behind a clean energy future where everyone has access to affordable zero
carbon energy bringing together global experience, passion, and the innovation
of its 4,500 people to transform the way energy is generated, stored and
supplied.

Further details can be found on the website at www.res-group.com
(http://www.res-group.com/) .

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