22
November 2024
VH
Global Sustainable Energy Opportunities plc
Net
Asset Value and Factsheet
GSEO
Overview
GSEO 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 also aims to
create environmental and social impact, transforming lives and
communities without compromising on returns.
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.
Buyback
Programme
The Company announced a £10 million share
buyback programme on 15 September 2023, which was further
increased by £10 million on 22 February 2024, bringing the
total share buyback programme to £20 million. As at
30 September 2024, the Company had bought back a total of
£18.8 million worth of its own shares. During the quarter, the
buyback added 0.7p to the NAV per share. Subsequent to the quarter
end the buyback budget has now been fully utilised.
Financial
Operational Highlights
Dividends
The Company announced an interim dividend of
1.42p per share in respect to the period from 1 July 2024 to
30 September 2024, in line with the dividend target for
2024.
As at 30 September 2024, the dividend was
1.0x covered by the strong underlying cash generation from the
operating assets, which make up 64% of the current portfolio. The
dividend coverage has reduced from 1.1x due to the strengthening of
the GBP in Q3 together with seasonal lows during the period,
notably in Brazil. As construction assets achieve operational
status in 2025, the dividend coverage is expected to
strengthen.
Leverage
Total leverage of the Company is 4.96% of NAV as
at 30 September 2024, which comprises of asset-level leverage
at its US asset, and Iberian and Swedish assets. The Company does
not currently employ leverage at the fund level.
30 September 2024 Net Asset Value
(NAV)
The Company's NAV as at 30 September 2024
was 111.2p per share, compared to the NAV of 110.8p per share as at
30 June 2024, a 0.3% increase. The movements in the NAV during
the quarter include:
|
|
Pence per share
|
|
Net Asset Value per share as at
30 June 2024
|
110.8
|
|
Dividend paid during
the quarter
|
(1.4)
|
|
Distributions from
investments fair value of asset movements
|
4.7
|
|
Fund
expenses
|
(0.4)
|
|
Movement in foreign
exchange
|
(3.2)
|
|
Share
buyback
|
0.7
|
|
Net Asset Value per share as at
30 September 2024
|
111.2
|
NAV Movements - Key Drivers:
Fair Value of Assets
· During the
quarter, discount rates reduced by 57bps on average across the
portfolio, primarily due to a decrease in the risk-free rate - with
the 20-year US Treasury rate falling from 4.66% to 4.18% as at
30 September 2024 - and a reduction in equity risk premia,
resulting in a 3.6p per share increase in NAV.
· Discount rates
for operational assets as at 30 September 2024 are 6.48% in
the US, 7.08% in Australia, 8.85% for the Brazilian hydro facility
and 8.89% for the Brazilian solar PV assets. The UK asset and the
Iberian and Swedish assets are currently held at cost.
Foreign Exchange
During the quarter, movements in foreign
exchange led to a £12.8m (-3.2p per share) drop in the NAV. GBP
strengthened versus USD, BRL and AUD by 5.8%, 3.0% and 2.0%
respectively. A net strengthening of GBP against the portfolio
currencies resulted in an unrealised foreign exchange loss. The
Company hedges the short-term distributions from investments from
local currency to GBP.
Portfolio Update
Financial update
· On a currency
adjusted basis, Q3 EBITDA is 12.2% ahead of the same quarter last
year. However, due to GBP strength against the underlying basket of
currencies, on a non-currency adjusted basis EBITDA in the last
12 months has decreased by 9.7%. This adjustment is due to GBP
strengthening 9.6% against USD, 18.7% against BRL and 2.2% against
AUD in the last 12 months.
Operational update
Spanish, Portuguese and Swedish
solar onshore wind assets:
· During the period
under review, a portfolio of ready to build and operational assets
comprising seven solar and two wind assets was acquired across
Spain, Portugal and Sweden. The programme is split into two
deployment legs, the first of which, completed in July, was an
investment of EUR53m in five assets with a generation capacity of
59.8MW. Additionally, project rights for four ready-to-build solar
PV assets in Spain with a total 188.6MW capacity were acquired in
July.
· Construction of
one solar PV asset in Spain has commenced post period and is
expected to be completed by H1 2025.
Australian solar PV with battery
storage assets:
· Post-period,
three solar and storage hybrid systems in New South Wales completed
construction and commissioning and have now reached operational
status.
· The final two
hybridised assets in the programme are still due to come online in
2025.
· We continue to
observe market events in Australia translating into increasingly
frequent outsized power prices. This is driven by volatility in the
supply-demand dynamics of Australia's constrained energy market,
validating our initial investment thesis.
Brazilian hydro facility:
· A drought in
Brazil has driven spot electricity prices up, as more thermal
capacity had to be called upon. As a result, the plant benefited
from selling its uncontracted capacity at higher prices, more than
offsetting the impact of reduced hydro power
availability.
US terminal storage
assets:
· The Mexican
refined oil product deliveries recommenced post the weather-related
disruptions experienced in Q2 2024.
UK flexible power with carbon
capture and reuse (CCR) asset:
· The full
commissioning of the plant with CCR element is progressing well and
streaming of first carbon dioxide is expected by the end of the
year.
Brazilian solar PV
assets:
· Completion of the
construction for three of the remaining six solar sites is still
expected by the end of the year.
· The drought in
Brazil mentioned above affected retail tariffs, driving up energy
inflation to end-users and making solar PVs more cost
competitive.
Sustainability Update
· A total of 29,373
tonnes of greenhouse gas emissions were avoided in the third
quarter of 2024.
· A total of 95,125
MWh of renewable energy was generated from the portfolio over the
same time period equivalent to over 24,300 average UK homes powered
annually.
· Almost 5,902
tonnes of sulfur were avoided in the third quarter, attributable to
the US terminal storage assets.
www.vh-gseo.com
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
Deutsche Numis (Corporate
Broker)
David
Benda
+44 (0)20 7260 1000
Matt Goss
Ocorian Administration (UK)
Limited (Company Secretary and Administrator)
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
