REG - US Solar Fund PLC US Solar Fund - USFP - Full Year Results and Notice of AGM

Us Solar FundAnnouncement

25/03/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240325:nRSY0601Ia&default-theme=true

RNS Number : 0601I  US Solar Fund PLC  25 March 2024

25 March 2024

 

US SOLAR FUND PLC

('USF', the 'Company')

 

FULL YEAR RESULTS TO 31 DECEMBER 2023

NOTICE OF AGM

 

US Solar Fund plc (LON: USF (USD)/USFP (GBP)), the renewable energy fund
investing in utility-scale solar power plants across North America, is pleased
to announce its annual results for the year ended 31 December 2023.

 

 

FINANCIAL HIGHLIGHTS

 

 ·         Audited Net Asset Value (NAV) of $258.2m or $0.78 per share (31 December 2022:
           $320.0m or $0.96 per share), down c.20%, largely driven by:
           o                                         Contributions including improvements in macroeconomic assumptions ($6.4m),
                                                     changes in the merchant curve ($28.5m) and the new Renewable Energy
                                                     Certificates (REC) Agreements ($7.9m); offset by
           o                                         Reductions including discount rate widening ($36.7m), updates to operating
                                                     cost assumptions ($41.9m) and dividend payments ($18.7m)
 ·         Dividends of 5.66 cents per share for 2023. Dividend cash cover of 0.95x for
           2023 (31 December 2022: 1.20x)
           o                                         Adjusting for carried forward reserves, the gain on sale of MS2 and
                                                     non-recurring strategic review payments, the underlying operational dividend
                                                     cover for the year was 0.50x (December 2022: 0.74x)
           o                                         The decrease in operational dividend cover was the result of a number of
                                                     factors including a reduction in revenues generated by the portfolio following
                                                     the sale of MS2 and an increase in the operational costs resulting from
                                                     inflation
 ·         IFRS loss for the year of $43.1m (31 December 2022: $14.5m profit), primarily
           driven by the reduction in overall unrealised fair value of the Company's
           assets due to factors including increased discount rates and changes to
           underlying asset cash flow forecasts

 

 

Gill Nott, Chair of US Solar Fund, said:

 

"The last 12 months will be remembered as a challenging year for financial
markets. Higher inflation and interest rates have weighed on infrastructure
companies generally, particularly impacting discount rates used to calculate
net asset values, and the costs of operating assets. The end of 2023 sees the
Company in a stronger position having secured a new Investment Manager, Amber.

 

With USF on a firmer footing following these events, we continue to be
optimistic about the outlook for performance of the operating portfolio. We
are analysing options available to return capital to shareholders, including a
share buyback, and a debt refinancing to optimise the Company's capital
structure and improve the operational cash flows. We will report on these by
the end of April.

 

The US states in which the Company's assets are located continue to provide a
supportive backdrop for renewable generation, which we expect will continue
irrespective of the outcome of the 2024 US federal election."

 

OPERATIONAL HIGHLIGHTS

 

 ·         Portfolio of 41 operating solar assets with a total capacity of 443MWDC,
           following sale of 50% share of Mount Signal 2 during 2023 (31 December 2022:
           543MWDC)
 ·         Total generation of 816GWh including MS2, and 715GWh for the Company's current
           portfolio (excluding MS2)
 ·         Electricity generated by USF's portfolio equates to 480,900 tCO(2)e emissions
           displaced (31 December 2022: 618,000 tCO(2)e) and 104,500 equivalent US cars
           removed from the road (31 December 2022: 134,000)
 ·         Overall generation (excluding MS2) of 7.2% below budget, of which 2.0%
           attributable to below forecast solar irradiance, and 5.2% attributable to
           below forecast plant availability, unscheduled outages and other
           non-irradiance related factors
 ·         Moving forward, the Investment Manager intends to implement a disciplined
           approach to asset management focused on decreasing unplanned outages and using
           generation data to inform Operation & Maintenance priorities
 ·         Portfolio weighted average PPA term of 11.9 years (31 December 2022:  13.8
           years). All PPA counterparties are investment-grade (Average offtaker credit
           rating of BBB+)
 ·         Sale of RECs for Oregon projects agreed, contributing $7.9m to NAV and
           additional operational cash and dividend coverage for 2024 onwards
 ·         Sale of 50% stake in Mount Signal 2 completed, with approximately $29m of
           remaining proceeds following revolving credit facility repayment and tax
           equity buy-out settlements

 

 

CAPITAL MANAGEMENT AND OUTLOOK

 

 ·         The Board and Investment Manager are currently analysing options available to
           it to return capital to shareholders (including through a share buyback) and
           refinancing of the Company's existing debt as a means to optimise the
           Company's capital structure and improve the operational cash flows. A further
           update on the outcome of this options analysis will be provided by the end of
           April 2024
 ·         The Company's operating solar assets remain well-located, within host states
           which remain committed to renewable energy targets and progressive policies
           which are compatible with renewable generation
 ·         The outlook remains positive as utilities and corporates continue to aim to
           meet their renewable energy objectives in line with state mandated targets and
           corporate sustainability objectives

 

 

NOTICE OF AGM AND OTHER INFORMATION

 

USF's 2024 Annual General Meeting will be held on Tuesday, 21 May 2024 at 3pm
at the offices of JTC (UK) Limited, The Scalpel, 18th Floor, 52 Lime Street,
London EC3M 7AF.

As required by the Company's Articles of Association, because the Company has
traded at an average discount to NAV in excess of 10% during 2023, a special
resolution will be proposed at the Company's forthcoming AGM, for shareholders
to vote to wind up or otherwise reconstruct the Company. If such a
discontinuation resolution is passed, the Company's Articles provide the Board
with four months to put forward a proposal. The strategic review conducted
throughout 2023 demonstrated that prevailing market conditions are not
conducive to the Company realising the value of its assets. For these reasons,
the Board recommends that shareholders vote against the discontinuation of the
Company at the Company's forthcoming AGM.

The Company's Annual Report and Financial Statements for the year ended 31
December 2023 and the formal Notice of the Annual General Meeting will be
posted to shareholders. In accordance with Listing Rule 9.6.1, copies of the
documents have been submitted to the UK Listing Authority and will shortly be
available to view on the Company's corporate website at
http://www.ussolarfund.co.uk (http://www.ussolarfund.co.uk) and for inspection
from the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)

 

 

For further information, please contact:

 

 US Solar Fund                      +44 20 7939 0550

 Meredith Frost (Amber)

 Cavendish Capital Markets Limited  +44 20 7397 8900

 Tunga Chigovanyika

 James King

 Will Talkington

 JTC (UK) Limited                   USSolarFund-CompanySecretary@jtcgroup.com

 Ruth Wright                        +44 207 409 0181

 KL Communications                  +44 20 3995 6673


 Charles Gorman

 Charlotte Francis

 Patrick Lodge

About US Solar Fund plc

 

US Solar Fund plc, established in 2019, listed on the premium segment of the
London Stock Exchange in April 2019. The Company's investment objective is to
provide investors with attractive and sustainable dividends with an element of
capital growth by owning and operating solar power assets in North America and
other OECD countries in the Americas.

 

The solar power assets that the Company acquires or constructs are expected to
have an asset life of at least 30 years and generate stable and uncorrelated
cashflows by selling electricity to creditworthy offtakers under long-term
power purchase agreements (or PPAs). The Company's portfolio currently
consists of 41 operational solar projects with a total capacity of 443MWDC,
all located in the United States.

 

Further information on the Company can be found on its website at
http://www.ussolarfund.co.uk (http://www.ussolarfund.co.uk) .

 

 

About Amber Infrastructure Group

 

Amber Infrastructure (Amber) is an international infrastructure specialist,
focused on investment origination, development, asset management and in
Europe, fund management. Amber's core business focuses on infrastructure
assets across the public, transport, energy, digital and demographic
infrastructure sectors that support the lives of people, homes and businesses
internationally.

 

Among other funds, Amber Infrastructure advises International Public
Partnerships, a FTSE 250-listed Company with a market cap of approximately
£2.5 billion and 15-year track record of long-term investment in
infrastructure assets globally. Amber is headquartered in London with offices
in Europe, North America and Australia and employs c.180 infrastructure
professionals. Amber has had a strategic partnership with the Hunt Group of
Companies in the US since 2015. Learn more at www.amberinfrastructure.com
(http://www.amberinfrastructure.com) .

 

 

LEI: 2138007BIUWE7AHS5Y90

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACSQKQBNDBKBDNB