2 May
2024
The Renewables Infrastructure Group
Limited
"TRIG" or "the Company", a
London-listed investment company advised by InfraRed Capital
Partners ("InfraRed") as Investment Manager and Renewable Energy
Systems ("RES") as Operations Manager.
Net
Asset Value - Q1 2024
TRIG announces that its estimated
unaudited Net Asset Value ("NAV")
as at 31 March 2024 is 125.0 pence per share, a
decrease of 2.7 pence per share to the Company's last
announced NAV as at 31 December 2023. This
decrease in NAV is primarily the result of
a decrease in near-term power price forecasts reflecting lower gas
prices and the mild winter across Europe, and below budget
generation and power prices in the period.
An interim dividend of 1.795 pence
per share was paid in the quarter, and the Company remains on track
to pay the target dividend for FY 2024 of 7.47 pence per
share1.
In line with the Company's capital
allocation strategy, proceeds from accretive divestments are being
used to reduce floating rate borrowings under the Company's
Revolving Credit Facility ("RCF"). The Manager continues to
progress TRIG's divestment activity and, as previously reported,
expects to proactively reduce RCF borrowings from £364m at 31
December 2023 to c. £150m during 2024.
Where there is a compelling
rationale to further TRIG's strategic priorities, the Company may
seek to make accretive investments. New investments are carefully
appraised against other uses of capital, including share buy
backs.
The key drivers of the movement in
Net Asset Value per share in the quarter are summarised in the
table below:
|
|
Net Asset Value (pence per
share)
|
Positive
Movements
|
Negative
Movements
|
|
NAV per share at 31 December
2023
|
127.7p
|
|
|
|
Q1 generation & power prices
compared to forecasts
|
|
|
(0.7)p
|
|
Value enhancements
|
|
0.3p
|
|
|
Q1 Inflation and foreign exchange
movements
|
|
|
(0.2)p
|
|
Decrease in near-term forecast power
prices
|
|
|
(2.0)p
|
|
NAV per share at 31 March
20242
|
125.0p
|
|
|
Q1 generation and power prices
compared to forecasts
In aggregate, generation and pricing
in the period was below forecast:
|
§
|
Weather resource has been, on
average, broadly on-budget across the portfolio. Weather resource
for
the German offshore, GB offshore and
French onshore wind projects was ahead of budget; and for
GB
onshore and solar projects was below
budget;
|
|
§
|
Overall generation was 7% below
budget. Underlying asset performance has been good with the
exception of cable faults at Hornsea One and East Anglia One
offshore wind farms, as flagged in the results for the year ended
31 December 2023. Both projects are partially curtailed with
remedial works underway, expected to be completed in the first half
of 2024;
|
|
§
|
Power prices were down consistently
across all geographies due to the mild winter experienced combined
with historically elevated gas stocks in the UK and mainland
Europe.
|
Value enhancements
During the period, TRIG
successfully sold three onshore
wind farms in the UK and Ireland, with the profit on disposal
contributing 0.3p to the Company's Net Asset Value. Since the
release of the Company's 2023 Interim results, TRIG has sold six
assets at an average premium of 12% to their respective valuations
for total consideration of £125m. These divestments underscore the
valuation of the Company's portfolio and its disciplined
approach to balance sheet management.
The Ranasjö & Salsjö onshore
wind farms (totaling 242MW generation capacity; TRIG owns a 50%
equity stake) in Sweden have been successfully energised and
commissioning is underway.
Development stage investments
continue to progress well. The grid connection date for the 100MW
Spennymoor battery storage project was advanced from 2032 to
2026.
Q1 inflation and foreign exchange
movements
Inflation in 2024 is running
slightly lower than forecast at 31 December 2023 resulting in small
negative impact to the portfolio valuation.
The portfolio benefits from strong
inflation linkage, with 51% of the Company's forecast revenue over
the next ten years directly indexed to inflation.
Sterling strengthened slightly
against the Euro during the period resulting in a small negative
movement in the valuation. This is offset by the hedges held at
group level increasing in value.
Decrease in near-term forecast power
prices
Across the markets TRIG invests in,
near-term power price forecasts3 have decreased due to
global gas prices declining amidst weaker demand driven by mild
weather and historically high levels of gas storage.
Q1 2024 power price forecasts for
the UK project an increase in prices over the medium term,
reflecting a delay to the expected commissioning of new nuclear in
the national energy mix and increased cost expectations for new
renewables deployment.
1 Past performance is not a
reliable indicator of future results. There can be no assurance
that targets will be met or that the Company will make any
distributions, or that investors will receive any return on their
capital. Capital and income at risk.
2 NAV per share at 31
March 2024 presented after unwind of the discount rate, company
costs and payment of the dividend, which in aggregate sum to net
nil impact. The table does not cast due to rounding.
3 Power price forecasts used
in the Directors' valuation for each of GB, SEM (Northern Ireland
& Republic of Ireland), France, Germany, Sweden and Spain are
based on analysis by the Investment Manager using data from forward
prices available in the market and leading power market
advisers.
Enquiries
InfraRed Capital Partners Limited
+44 (0) 20 7484 1800
Richard Crawford
Phil George
Minesh Shah
Mohammed Zaheer
Brunswick
+44 (0) 20 7404 5959 / TRIG@brunswickgroup.com
Mara James
Investec Bank
Plc
+44 (0) 20 7597 4000
Lucy Lewis
Tom Skinner
BNP Paribas
+44
(0) 20 7595 9444
Virginia Khoo
Carwyn Evans
Notes
The Company
The Renewables Infrastructure Group
("TRIG" or the "Company") is a leading London-listed renewable
energy infrastructure investment company. The Company seeks to
provide shareholders with an attractive long-term, income-based
return with a positive correlation to inflation by focusing on
strong cash generation across a diversified portfolio of
predominantly operating projects.
TRIG is invested in a portfolio of
wind, solar and battery storage projects across six countries in
Europe with aggregate net generating capacity of 2.8GW; enough
renewable power for 1.9 million homes and to avoid 2.3 million
tonnes of carbon emissions per annum. TRIG is seeking further
suitable investment opportunities which fit its stated Investment
Policy.
Further details can be found on
TRIG's website at www.trig-ltd.com.
Investment Manager
InfraRed Capital Partners is an
international infrastructure investment manager, with more than 190
professionals operating worldwide from offices in London, New York,
Sydney, Seoul and Madrid. Over the past 25 years, InfraRed has
established itself as a highly successful developer and custodian
of infrastructure assets that play a vital role in supporting
communities. InfraRed manages US$14bn+ of equity
capital1 for investors around the globe, in listed and
private funds across both income and capital gain
strategies.
A long-term sustainability-led
mindset is integral to how InfraRed operates as it aims to achieve
lasting, positive impacts and deliver on its vision of Creating
Better Futures. InfraRed has been a signatory of the Principles of
Responsible Investment since 2011 and has achieved the highest
possible PRI rating2 for its infrastructure business for
seven consecutive assessments, having secured a 5-star rating for
the 2023 period3. It is also a member of the Net Zero
Asset Manager's Initiative and is a TCFD supporter.
InfraRed is part of SLC Management,
the institutional alternatives and traditional asset management
business of Sun Life. InfraRed represents the infrastructure equity
arm of SLC Management, which also incorporates BentallGreenOak, a
global real estate investment management adviser, and Crescent
Capital, a global alternative credit investment asset
manager.
Further details can be found on
InfraRed's website at www.ircp.com.
1. Uses 5-year
average FX as at 30th September 2023 of GBP/USD of 1.2944; EUR/USD
1.1291. EUM is USD 13.597m.
2.
Principles for Responsible Investment ("PRI")
ratings are based on following a set of Principles, including
incorporating ESG issues into investment analysis, decision-making
processes and ownership policies. More information is available
at https://www.unpri.org/about-the-pri.
3.
In the 2023 Principles for Responsible Investment
("PRI") assessment, InfraRed achieved a 5 star rating for the
Policy Governance and Strategy and Infrastructure and a 4 star
rating for the newly created Confidence Building Measures. Please
find InfraRed's report available for download on our website
here: https://www.ircp.com/sustainability/
Operations Manager
TRIG's Operations Manager is RES
("Renewable Energy Systems"), the world's largest independent
renewable energy company.
RES is the world's largest
independent renewable energy company, working across 24 countries
and active in wind, solar, energy storage, biomass, hydro, green
hydrogen, transmission, and distribution. An industry innovator for
over 40 years, RES has delivered more than 24GW of renewable energy
projects across the globe and plans to bring more than 22GW of new
capacity online in the next five years.
As a service provider, RES has the
skills and experience in asset management, operations and
maintenance (O&M), and spare parts - supporting 41GW of
renewable assets across 1,300 sites. RES brings to the market a
range of purposeful, practical technology-based products and
digital solutions designed to maximise investment and deployment of
renewable energy. RES is the power behind a clean energy future
where everyone has access to affordable zero carbon energy bringing
together global experience, passion, and the innovation of its
4,500 people to transform the way energy is generated, stored and
supplied.
Further details can be found on the
website at www.res-group.com.