REG - US Solar Fund PLC US Solar Fund - USFP - Interim Results to 30 June 2024

Us Solar FundAnnouncement

30/09/2024 07:15

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RNS Number : 0872G  US Solar Fund PLC  30 September 2024

30 September 2024

 

US SOLAR FUND PLC

('USF', the 'Company')

 

INTERIM RESULTS TO 30 JUNE 2024

 

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 interim results for the six months ended 30 June 2024.

 

 

FINANCIAL HIGHLIGHTS

 ·         Net Asset Value (NAV) of $230.4m per share (31 December 2023: $258.2m). NAV
           movement (down 20%) largely driven by the return of $18.6 million plus costs
           to shareholders via a tender offer
 ·         NAV per share of $0.75 (31 December 2023: $0.78 per share), down 4%, driven
           by:
           o                                         Risk free rate used in the discount rate for portfolio valuations is the US
                                                     has increased by 40bps which was partially offset by a reduction in risk
                                                     premia and the combined impact is a reduction to the NAV of $8.6 million
           o                                         The weighted average discount rate used is 9.2% (pre-tax)
           o                                         Dividend distributions of $6.8 million approved to be paid to shareholders
                                                     during the period
           o                                         Changes in operating assumptions reflecting the valuation impact of revisions
                                                     made to the revenue and cash flow assumptions, including to REC contracts, as
                                                     separately announced
           o                                         Macroeconomic assumptions, including changes to inflation and depositary rates
                                                     contributed to an uplift of $0.4 million to NAV
           o                                         Changes in the merchant curves contributed an uplift of $11.6 million to NAV
           o                                         NAV return of $2.2 million reflects valuation impacts of cash distributions
                                                     from underlying assets, RCF reduction, net working capital and other
                                                     adjustments
 ·         Dividend of $0.56 to be paid for Q2 20242024 to be paid by 29 October 2024, in
           line with the Company's interim dividend target of $0.0225 per share
 ·         Operational dividend cash cover 1  (#_ftn1) of 0.62x (30 June 2023: 0.50x),
           the 2024 dividend target is forecasted to be fully covered by cash generated
           from operations

 

 

Commenting on the interim results, Gill Nott, Chair of US Solar Fund, said:

"Over the past six months, working with the Company's new Investment Manager
Amber Infrastructure Investment Advisor, LLC (AIIA), USF has delivered on its
commitment to return capital, via a tender offer in June. The Company acquired
approximately 7% of the issued share capital at a significant premium to the
prevailing market price, returning $18.6 million to shareholders earlier this
year.

Our focus remains on taking steps to ensure the Company's portfolio is robust,
optimised and capable of being presented to the market for a future liquidity
event in order to maximise shareholder value. The immediate plan, in addition
to the continuing focus on improving performance, is to progress the proposed
refinancing.

We have valued the constructive discussions held with shareholders during the
period and look forward to continuing positive engagement. On behalf of my
colleagues on the Board, we thank you for your ongoing support."

 

OPERATIONAL HIGHLIGHTS

 ·         Total generation of 365GWh, 6.8% below budget, of which:
           o                                         3.2% (31 Dec 2023: 2.0%) attributable to below forecast solar irradiance from
                                                     unfavourably weather across most of the portfolio during Q1 2024, particularly
                                                     at USF's largest asset, the 128MW Milford site
           o                                         3.6% (31 Dec 2023: 5.2%) arose from unscheduled outages including low impact
                                                     outages of solar plant, utility grid outages, and delays to repair and
                                                     restoration work
           o                                         Supported by the Board, the Investment Manager continues to assess external
                                                     contractors' performance to ensure early detection and resolution of issues
                                                     impacting generation. An O&M subcontractor for two sites was replaced
                                                     during the period with consideration for additional sites going forward
 ·         Electricity generated by USF's portfolio equates to 234,500 tCO(2)e emissions
           displaced (30 June 2023: 220,200 tCO(2)e (current portfolio))
 ·         Portfolio weighted average power purchase agreements (PPA) term of 11.4 years
           (31 Dec 2023: 11.9 years). All PPA counterparties are investment-grade
           (Average offtaker credit rating of BBB+)
 ·         Portfolio of 41 operating solar assets with a total capacity of 443MWDC
 ·         All portfolio assets have PPAs with contracted prices for 100% of electricity
           generated
 ·         In line with the Board's request, AIIA, as the new Investment Manager, has
           concluded a full review of portfolio and valuation assumptions. The Board is
           pleased with the approach AIIA has taken towards proactive capital management
           and enhanced reporting disclosures

 

 

GOVERNANCE

 ·         Appointment of Mark Lerdal as of 1 October 2024, an experienced energy and
           renewables US-based executive, as an independent non-executive director,
           following the retirement of Rachael Nutter from the Board
 ·         Shareholders voted against discontinuation at the 2024 Annual General Meeting,
           confirming continuation of the Company

 

 

CAPITAL MANAGEMENT AND OUTLOOK

 ·         USF returned $18.6 million to shareholders (around 7% of the Company's shares)
           at a significant premium to the prevailing market price
 ·         As previously announced, dividend target reduced to $0.0225 cents per share,
           in order to improve operational cash dividend coverage during the remainder of
           the year
 ·         Reduction of the Company's revolving credit facility from $40 million to £20
           million, which remains undrawn
 ·         Board remains focused on the efficient and disciplined management of capital,
           with the overriding objective of driving shareholder value
 ·         In addition to the focus on performance, the Board is progressing a proposed
           refinancing
 ·         The Board will continue to monitor the market for similar assets as those held
           by the Company with a view to the realisation of value from the Company's
           assets when the time is right

 

 

Interim report

In accordance with UK Listing Rule 6.4.1, copies of the Company's interim
report 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 Securities Plc  +44 20 7397 8900

 Tunga Chigovanyika

 James King

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

                         (mailto:USSolarFund-CompanySecretary@jtcgroup.com)
 Ruth Wright

                         +44 207 409 0181

 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
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 Group (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 advises International Public Partnerships, a FTSE
250-listed Company with a market cap of £2.4billion 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 Hunt Companies, Inc. in the US since 2015 and completed their
previously announced strategic combination with Boyd Watterson in August 2024.

Learn more at www.amberinfrastructure.com (http://www.amberinfrastructure.com)
.

 

 

 1  (#_ftnref1) Presented on an operational coverage basis for a trailing 12
month period. As announced in April 2024, the Board revised the target
dividend for 2024 to $0.0225 per share in order to improve operational cash
dividend coverage, which will begin to be captured in this metric as dividends
are paid at this revised rate.

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