REG - VH Global Energy Inf - Net Asset Value and Factsheet

VH Global Energy InfrastructureAnnouncement

22/05/2025 07:02

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RNS Number : 6685J  VH Global Energy Infrastructure PLC  22 May 2025

22 May 2025

 

VH Global Energy Infrastructure plc

 

Net Asset Value and Factsheet

 

ENRG Overview

ENRG is focused on enabling the energy transition globally through its
investments. Its objective is to generate stable returns, principally in the
form of income distributions, by investing in a diversified portfolio of
global sustainable energy infrastructure assets, predominantly in countries
that are members of the EU, OECD, OECD Key Partner countries or OECD Accession
countries. The Company's investments in sustainable energy infrastructure seek
to make an impact by supporting the attainment and pursuit of key Sustainable
Development Goals ("SDGs") where energy and energy infrastructure investments
are a direct contributor to the acceleration of the energy transition.

 

About Victory Hill Capital Partners LLP

 

Victory Hill is a London-based specialist investment management firm founded
by an experienced team of energy financiers. The investment team has
participated in more than $200bn in transaction values across 91 conventional
and renewable energy related transactions in over 30 jurisdictions worldwide.
The Victory Hill team deploys its experience across different financial
disciplines in order to assess investments holistically from multiple points
of view. The firm pursues operational stability and well-designed corporate
governance to generate sustainable positive returns for investors.

 

Financial Operational Highlights

Dividends

The Company announced an interim dividend of 1.45p per share in respect to the
period from 1 January 2025 to 31 March 2025, in line with the dividend target
for 2025. Based on the share price as at 31 March 2025, the resulting dividend
yield is 10.1%.

As at 31 March 2025, the dividend was 0.96x covered by the strong underlying
cash generation from the operating assets. As construction assets achieve
operational status, the dividend coverage is expected to improve.

Leverage

Total leverage of the Company is 8.1% of NAV as at 31 March 2025, which
comprises of asset-level leverage at its US asset, and Iberian and Swedish
assets. The Company does not employ leverage at the fund level.

 

31 March 2025 Net Asset Value (NAV)

 

The Company's NAV as at 31 March 2025 was 103.29p per share, broadly in line
with the NAV of 103.21p per share as at 31 December 2024. The movements in the
NAV during the quarter include:

                                                                     Pence per share
 Net Asset Value per share as at 31 December 2024                    103.21
 Dividend paid during the quarter                                    (1.45)
 Distributions from investments & fair value of asset movements      1.83
 Fund expenses                                                       (0.43)
 Movement in foreign exchange                                        0.13
 Net Asset Value per share as at 31 March 2025                       103.29

NAV Movements - Key Drivers:

Fair Value of Assets

·      During the quarter, discount rates decreased by 2 bps on average
across the portfolio. The movement in discount rates was primarily driven by a
decline in the US 20-year government bond yield - from 4.86% to 4.60%.

·      Discount rates for operational assets as at 31 March 2025 are
6.84% in the US, 7.57% in Australia, 9.96% for the Brazilian hydro facility,
10.13% for the Brazilian solar PV assets, and 8.97% for the operational assets
of the Iberian and Swedish portfolio. The UK asset is held at cost.

Foreign Exchange

During the quarter, movements in foreign exchange led to a 0.13p per share
increase in the NAV. GBP strengthened versus USD and AUD by 3% and 2.4%
respectively and weakened versus BRL and EUR by 4.6% and 1.2% respectively.

Portfolio Update

During the period under review, key construction milestones were achieved in
both Brazil and the UK, a majority of the operational assets delivered strong
results, and additional projects are on track to be commissioned in Q2 and Q3
2025. The following points provide further insight into the performance and
strategic positioning of the Fund's assets:

US terminal storage assets:

·      Since the formal announcement of tariffs on fuel imports from
Mexico by the Trump administration in February 2025, there have been no
negative effects on the asset's revenue streams. This is consistent with the
initial analysis conducted by the Investment Manager and its operating
partner, Motus Energy. We continue to closely monitor any developments related
to the potential escalation of tariff usage in the US, ensuring ongoing
assessment of the asset's valuation.

·      With respect to the southbound flows, despite the risk of
retaliatory tariffs from Mexico to the US, Mexico's high dependency on lighter
and cleaner fuels from the US has remained evident. No disruptions have been
observed at the border, and southbound flows have neither stopped nor
decreased compared to previous periods.

·      During the period under review, Motus was awarded the ILTA
(International Liquid Terminals Association) Safety Award for a third
consecutive year.

Midstream assets continue to be a highly attractive asset class for
institutional investors with many infrastructure funds actively participating
in the M&A market. Energy companies are also actively pursuing strategic
midstream acquisitions that can facilitate their trading activities.

Brazilian hydro facility:

·      EBITDA for the first quarter of the year was 22% above budget on
the back of strong hydrological conditions that reduced operating costs.

·      The spot wholesale and long-term PPA markets in Brazil remain
volatile, offering attractive entry points during heightened dry periods,
hence enabling strong revenues to be locked in and the plant to benefit from
low operational costs when the hydrological conditions revert. This proactive
commercial strategy drove much of the outperformance during the quarter.

·      The Brazilian M&A market for hydroelectric plants remains
active, with the most recent transaction being the sale of two additional
hydro facilities by EDP to Engie.

Australian solar PV with battery storage assets:

·      The three assets in New South Wales have been performing well
since their hybridisation last quarter. Based on simulations run with actual
operational data from our sites and data from the Australian Energy Market
Operator (AEMO) published electricity prices, these hybrid solar and BESS
assets have been generating 1.5 to 2 times the revenue of standalone solar
systems during the first quarter, highlighting the significant potential of
this integrated approach.

·      The overall Australian energy system is subject to seasonal
trends with summer months registering lower morning and evenings margins and
winter months generating higher margins. In the quarter, lower irradiation
levels, and negative prices in the summer months resulted in asset performance
below budget. The variance to budget was also more pronounced because positive
price volatility events which may occur later in the year (and not in the
current quarter) are nevertheless averaged out across each quarter of the year
in the forecast asset budgets. It is therefore more likely that performance
will improve in Q2 and Q3 as a result of an unwinding of the factors above.

·      The remaining two hybridised assets in the programme are still
expected to come online in Q3 2025.

UK flexible power with carbon capture and reuse (CCR) asset:

·      It is still our expectation that the integrated plant will be
fully commissioned in H1 2025.

·      Following the announcement on 21 February 2025 of the successful
production of the first stream of purified CO2, the asset is currently in the
midst of commissioning the full production of liquefied CO2. This includes the
transfer into on-site storage tanks in preparation for offtake by Buse Gases
Ltd - a global leader in the industrial and specialty gases sector - which is
expected in May 2025.

Brazilian solar PV assets:

·      Two solar sites, totalling 7.0 MWdc, were successfully energized
in January 2025. A third site, with a capacity of 6.25 MWdc, is expected to be
fully operational by the end of Q2 2025.

·      In Q1 2025, revenues were below budget due to lower-than-expected
solar generation, primarily driven by weather-related factors-most notably,
heavy rainfall across several Brazilian states.

·      The energy tariffs that underpin the PPAs in this programme have
continued to increase above inflation during the period under review.

·      Brazil's distributed generation (DG) market is currently
undergoing a phase of consolidation, with the largest players looking for
attractive portfolios with a meaningful size. Industrial players seeking to
generate cleaner and cheaper energy are also active buyers in the market, with
multinationals such as Dow Chemicals and Schulz having recently announced
DG-related transactions.

Spanish, Portuguese and Swedish solar onshore wind assets:

·      The recent disruption to power systems in Spain and Portugal has
not affected the ENRG's assets, as less than 20% of the portfolio of solar and
wind assets have been built and are primarily located in Sweden and the Canary
Islands.

·      In the operational portion of the portfolio, the revenues of the
3.7MW solar PV asset in the Canary Islands were above expectations in the
quarter due to captured prices exceeding budget. Conversely, the 6MW Swedish
wind farm underperformed due to depressed prices in the SE2 Nordpool market
and maintenance activities in the period. We expect this to reverse over the
medium-term.

·      With respect to the remainder of the programme, the 10.3MW
Spanish solar PV asset is mechanically complete and energisation is expected
in H1 2025, while the 20MW Portuguese solar PV asset is expected to be
operational by the end of H2 2025. The solar panels have been acquired, and
early works have started on the remaining 98.3MW Spanish solar PV site, while
notice-to-proceed on the 20MW onshore wind farm in Sweden is expected in the
second half of the year.

·      This programme offers robust protection against delays and cost
overruns through two key transaction structure components: i) a developer
premium, subject to automatic adjustments on any deviations from the plan,
ensuring a minimum return level is maintained; and ii) the option to abort
projects that do not achieve full "ready-to-build" status to the required
standard.

Sustainability Update

·      A total of 86,969 tonnes of greenhouse gas emissions were avoided
in the first quarter of 2025.

·      A total 275,095 of renewable energy was generated from the
portfolio over the same time period, equivalent to over 101,887 average UK
homes powered annually.

·      Almost 5,847 tonnes of sulfur were avoided in the first quarter,
attributable to the US terminal storage assets.

 

* Sustainability data is calculated internally at Victory Hill as at 31 March
2025. Historical data and analysis should not be taken as an indication or
guarantee of any future.

 

www.globalenergyinfrastructure.co.uk
(http://globalenergyinfrastructure.co.uk/)

 

The Company's LEI is 213800RFHAOF372UU580.

 

For further information, please contact:

 

Edelman Smithfield (PR Adviser)

Ged Brumby          +44  (0)7540 412 301

Hamza Ali              +44  (0)7976 308 914

 

Victory Hill Capital Partners LLP (Investment Manager)

Navin
Chauhan                       info@victory-hill.com
(mailto:info@victory-hill.com)

 

Deutsche Numis (Corporate Broker)

Hugh Jonathan         +44 (0)20 7260 1000

Matt Goss

 

Ocorian Administration (UK) Limited (Company Secretary)

oaukcosecteam@ocorian.com (mailto:oaukcosecteam@ocorian.com)

About Victory Hill Capital Partners LLP

Victory Hill Capital Partners LLP ("Victory Hill") is authorised and
regulated by the Financial Conduct Authority (FRN
961570).

Victory Hill is based in London and was founded in May 2020 by an
experienced team of energy financiers that have spun-out of a large
established global project finance banking group. The team has participated in
more than $200bn in transaction values across 91 conventional and renewable
energy-related transactions in over 30 jurisdictions worldwide. Victory Hill
is the investment manager of the Company.

The Victory Hill team deploys its experience across different financial
disciplines in order to assess investments holistically from multiple points
of view. The firm pursues operational stability and well-designed corporate
governance to generate sustainable positive returns for investors. It focuses
on supporting and accelerating the energy transition and the attainment of the
UN Sustainable Development Goals.

Victory Hill is a signatory of the United Nations Principles for Responsible
Investing (UN PRI), the United Nations Global Compact (UN GC), Net Zero Asset
Managers Initiative (NZAMI), a member of the Global Impact Investing Network
(GIIN) and is a formal supporter of the Financial Stability Board's Task-Force
on Climate-related Disclosures (TCFD).

END

 

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