REG - Renew Infra Grp Ld - Net Asset Value – Q4 2023

Renewables InfrastructureAnnouncement

09/02/2024 07:00

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RNS Number : 5610C  Renewables Infrastructure Grp (The)  09 February 2024

 

 

9 February 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.

Q4 2023 Net Asset Value, 2024 dividend target and notice of results

TRIG announces that its estimated unaudited Net Asset Value as at 31 December
2023 is 127.7 pence per share, a decrease of 3.3 pence per share to the
Company's last announced Net Asset Value as at 30 September 2023, principally
due to a reduction in near-term power price forecasts.

Cash generation from TRIG's well-diversified portfolio remained strong in Q4
with net dividend cover for the full year of 2023 remaining healthy at 1.6x,
which is stated after the repayment of £219m project level debt (gross
dividend cover was 2.8x*).

The key drivers of the movement in Net Asset Value per share in the quarter
are summarised in the table below with further details following:

                                              Net Asset Value (pence per share)  Positive Movements  Negative Movements
 NAV per share at 30 September 2023           131.0p
 Decrease in forecast power prices                                                                   (3.4)p
 Q4 inflation and foreign exchange movements                                                         (0.7)p
 Value Enhancements & Other items                                                0.8p
 NAV per share at 31 December 2023**          127.7p

*The dividend cover implied on operational cashflow generated before the
repayment of portfolio level debt.

**NAV per share at 31 December 2023 presented after unwind of the discount
rate, company costs and payment of the dividend, which in aggregate sum to net
nil impact.

Decrease in forecast power prices

Power price projections assumed in the valuation have decreased materially
from those at 30 September. Forecast prices over the next three to five years
are lower across each of the markets in which TRIG invests, tracking lower
global gas prices. Longer term forecast prices are broadly unchanged in real
terms.

The impact of lower power price assumptions has been mitigated by the
interaction with government windfall taxes introduced in late 2022, which are
levied in the UK and some other jurisdictions, on higher power price levels.

Q4 inflation and foreign exchange movements

UK and European inflation decelerated during the quarter, ending at levels
lower than had been assumed in the 30 September 2023 valuation, reducing the
31 December 2023 valuation. This has been partly offset by gains on the
Company's foreign exchange hedges due to narrowing near term UK / Eurozone
interest rate expectations.

The portfolio is well-positioned to handle different possible paths for
inflation. 51% of the Company's forecast revenue over the next ten years is
directly indexed to inflation.

 

Other items

Other items in the quarter include actual portfolio performance, a small
increase to forecast REGO pricing and adjustments to energy budgets at a small
number of projects.

 

Capital allocation

During Q4, the sale of three onshore wind farms in Ireland announced in
August was successfully completed, raising gross proceeds of £22m at a 26%
premium to carrying value, reflecting the Company's disciplined approach to
balance sheet management. The Company is actively progressing with further
divestment opportunities. Initial offers have been consistent with or above
the Portfolio Valuation and the Company expects to provide updates on these in
due course.

The Board and Managers continue to prioritise paying an attractive,
sustainable and resilient dividend to shareholders, fulfilling existing
investment commitments and reducing RCF drawings, which are currently £364m.
Over the next twelve months, the Company expects to be able to reduce RCF
drawings to about £150m, which is within 5% of Portfolio Value, using
proceeds from disposals and organic cashflows. The Company may also make
accretive investments where there is a compelling rationale to further the
Company's strategic priorities. In the absence of compelling investments, the
Company may consider share buybacks.

 

Dividend

The Board has set the dividend target for 2024 at 7.47p per share,
representing a 4% growth on the 2023 dividend. This increase reflects strong
cash generation, but also recognises inflation has reduced materially from its
peak and that future cash flows are expected to be moderated by reductions in
power prices (with average forwards for 2024 lower than wholesale prices seen
in 2023 across TRIG's markets). Maintaining healthy dividend cover provides
the Company with optionality to fund organic investment in the portfolio to
enhance total returns for shareholders.

 

Notice of Annual Results

The Company has announced that it plans to release its Full Year Results for
the year ended 31 December 2023 on Wednesday, 28 February 2023.

Enquiries

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

Richard Crawford

Phil George

Minesh Shah

Mohammed Zaheer

 

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

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 over
2.8GW; enough renewable power for 1.9 million homes and to avoid over 2.4
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 170 professionals operating worldwide from offices in
London, New York, Sydney, Seoul and Madrid. Over the past 25 years, InfraRed
has established itself as a developer and steward of infrastructure assets
that play a role in supporting communities. InfraRed manages US$14bn of equity
capital(1) for investors around the globe, in listed and private funds across
both core and value-add 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 ("PRI")(2) since 2011 and has achieved the highest
possible infrastructure rating for eight consecutive PRI 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 BGO, a
global real estate investment management adviser, and Crescent Capital, a
global alternative credit investment asset manager.

 

www.ircp.com (http://www.ircp.com/)

 

 1  Uses 5-year average FX as at 30th September 2023 of GBP/USD of 1.2944;
EUR/USD 1.1291. EUM is USD 13.597m

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
(https://www.unpri.org/about-the-pri)

3 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/

 

Operations Manager

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

RES has been at the forefront of wind energy development for over 40 years,
with the expertise to develop, engineer, construct, finance and operate
projects around the globe. RES has developed or constructed onshore and
offshore wind, solar, energy storage and transmission projects totalling more
than 23GW in capacity. RES supports over 12GW of operational assets worldwide
for a large client base. Headquartered in Hertfordshire, UK, RES is active in
14 countries and has over 2,500 employees engaged in renewables globally.

RES is an expert at optimising energy yields, with a strong focus on safety
and sustainability. Further details can be found on the website
at www.res-group.com (http://www.res-group.com/) .

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