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

Us Solar FundAnnouncement

10/04/2025 07:00

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RNS Number : 3815E  US Solar Fund PLC  10 April 2025

10 April 2025

 

US SOLAR FUND PLC

('USF', the 'Company')

 

FULL YEAR RESULTS TO 31 DECEMBER 2024

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 2024.

 

 

FINANCIAL HIGHLIGHTS

 

 ·             Audited Net Asset Value (NAV) of $194.2m or $0.63 per share (31 December 2023:
               $258.2m or $0.78 per share), a NAV total return of (13.4%) (31 December 2023:
               (1.7%), largely driven by:
               o                                         Shareholder distributions of $28.9m, including $10.3m of dividends recognised
                                                         in the period and the $18.6m tender offer which concluded in June 2024
               o                                         Increase of $21.3m due to changes in merchant curves, offset by discount rate
                                                         widening ($48.2m) and updates to operating cost assumptions ($15.9m)
               o                                         The valuation discount rate used increased to 10.8% (2023: 8.8%) due to market
                                                         dynamics including the uncertainties created by the lead up to and results of
                                                         the US federal election in November 2024, which has negatively impacted asset
                                                         valuations within the US renewables sector
 ·             Dividends of 2.25 cents per share for 2024. Operational dividend cover of
               1.10x for 2024 (31 December 2023: 0.50x)
 ·             During the year c.$18.6m was distributed to shareholders on account of the
               tender offer that concluded in June 2024, which utilised the remaining
               proceeds from the sale of the Company's interest in the Mount Signal 2 asset
               (MS2) which closed in June 2023
 ·             IFRS loss for the year of $34.8m (31 December 2023: ($43.1m)), 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:

 

"2024 has been a challenging year for US Solar Fund, and investment companies
more widely, with tough market conditions continuing to impact trading
activity and valuations. The Board and Investment Manager have remained
proactive in addressing issues within their control. However, the results of
the US election in November 2024 and statements made by the incoming
administration during the period influenced market dynamics and increased
discount rates relevant to the Company's valuation.

 

During the year, the Board delivered on its commitment to return capital to
shareholders, via an $18.6m tender offer. The Board has resized the Company's
revolving credit facility, and reduced the dividend target on an interim basis
to ensure the balance sheet remains robust. Following a detailed analysis of
options available to the Company to refinance its existing senior debt
facilities, the Board is taking steps to conclude a refinancing by the end of
April 2025.

 

The Board and Investment Manager will continue to monitor the market for
comparable sales of performing operational portfolios, with a view to
realising value from the Company's assets when the time is right. The Board
and I maintain an optimistic outlook for the Company because of its robust
operational portfolio with assets located in states which continue to support
renewable generation"

 

 

OPERATIONAL HIGHLIGHTS

 

 ·             Portfolio of 41 operating solar assets with a total capacity of 443MWDC
 ·             Total generation of 698GWh (2023: 715GWh on a like-for-like portfolio basis
               (excluding MS2, which was sold in 2023)
 ·             Electricity generated by USF's portfolio equates to 448,600 tCO(2)e emissions
               displaced (31 December 2023: 480,900 tCO(2)e) and 106,800 equivalent US cars
               removed from the road (31 December 2023: 104,500)
 ·             Overall generation was 9.0% below budget, of which 2.9% was attributable to
               below forecast solar irradiance (versus 2.0% in 2023), and 6.1% attributable
               to unscheduled outages and other non-irradiance related factors (versus 5.2%
               in 2023), such as utility grid outages
 ·             The Investment Manager has instigated multiple asset-management related
               activities to enhance operational efficiencies and portfolio performance,
               including replacing underperforming operations and maintenance subcontractors
               and developing a master diagnostic and remediation plan to strategically and
               methodically address technical issues impacting overall portfolio performance.
               Initiatives progressed during 2024 are expected to result in improved
               portfolio performance in 2025 and beyond
 ·             Portfolio weighted average PPA term of 10.8 years (31 December 2023: 11.9
               years). All PPA counterparties are investment-grade (Average offtaker credit
               rating of BBB+)

 

CAPITAL MANAGEMENT AND OUTLOOK

 

 ·             During the period, the Company's revolving credit facility ("RCF") was reduced
               from $40 million to $20 million and the Board and Investment Manager will
               continue to assess the ongoing need for the RCF
 ·             The Board announced its intention to carry out a potential refinancing in
               April 2024. Following detailed analysis, a bank refinancing was determined to
               be the more attractive option because of its structural flexibility and is
               expected to conclude by the end of April 2025
 ·             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
 ·             While statements made during the November 2024 US federal election campaign,
               and the subsequent Executive Order entitled "Unleashing American Energy" have
               created policy objectives which continue to drive uncertainty within the US
               renewable market and more broadly, the long-term outlook for renewable energy
               in the US remains strong on the back of state-level mandates and the overall
               cost competitiveness of renewable energy
 ·             The Board and Investment Manager will continue to closely monitor changes to
               market conditions that might suggest a favourable environment capable of
               delivering value to shareholders. In the meantime, the Investment Manager will
               continue to act as a responsible steward of the Company and its assets, and
               remain focused on taking steps to optimise, enhance and position the Company
               for a future liquidity event which delivers value to shareholders

 

NOTICE OF AGM AND OTHER INFORMATION

 

USF's 2025 Annual General Meeting will be held on 20 May 2025 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 2024, 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 prevailing market uncertainty
means that now is not the right time to attempt a sale of the Company's
portfolio. For this reason, the Board recommends that shareholders vote
AGAINST the discontinuation of the Company at the forthcoming AGM.

 

The Company's Annual Report and Financial Statements for the year ended 31
December 2024 and the formal Notice of the Annual General Meeting will be
posted to shareholders. In accordance with UK Listing Rule 6.4.1, 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)

 

ENDS

 

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

 KL Communications                  +44 20 3882 6644

 Charles Gorman

 Charlotte Francis

 Amy Levingston Smith

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 Investment Advisor LLC, a subsidiary of the Amber
Infrastructure Group, was appointed as the Company's Investment Manager on 1
December 2023.

 

Amber Infrastructure 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 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, Australia and New Zealand and employs over 180 infrastructure
professionals.

 

Amber has had a strategic partnership with the Hunt Group of Companies in the
US since 2015 and completed their previously announced strategic transaction
with Boyd Watterson in August 2024. Amber is part of Boyd Watterson Global
Asset Management Group LLC, a global diversified infrastructure, real estate
and fixed income business with over $35.7 billion in assets under management
and over 300 employees with offices in eight US cities and presence in twelve
countries.

 

Learn more at www.amberinfrastructure.com

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