TIDMJLEN
RNS Number : 8486L
JLEN Environmental Assets Group Ltd
17 May 2022
The following replaces the 'Net Asset Value, Portfolio Update
and Dividend Declaration' announcement released on 17 May 2022 at
07:00 under RNS Number: 6871L. The ex-dividend and record dates for
the 31 March 2022 interim dividend payment have been amended from 2
June 2022 and 3 June 2022, to 1 June 2022 and 6 June 2022,
respectively. Save for the foregoing, all other details set out in
the original announcement remain unchanged and the full corrected
text is set out below.
17 May 2022
JLEN ENVIRONMENTAL ASSETS GROUP LIMITED
("JLEN" or the "Company")
Net Asset Value, Portfolio Update and Dividend Declaration
Net Asset Value
JLEN, the listed environmental infrastructure fund, is pleased
to announce an unaudited Net Asset Value as at 31 March 2022 of
GBP762.9 million (115.3 pence per share), an increase of 14.6 pence
per share since the last published NAV as at 31 December 2021. The
key drivers for this uplift are as follows:
NAV at 31 December 2021
100.7
Dividends paid in the period (1.7p)
Power prices (excluding assets previously held at acquisition cost) 5.0p
Power prices (assets previously held at acquisition cost) 8.4p
Inflation 2.6p
Discount rate changes 1.0p
Other movements (0.7p)
NAV at 31 March 2022 115.3p
Power prices
Short term wholesale electricty and gas prices have increased
dramatically over the last 12 months. Electricity prices for the
current Summer '22 season almost tripled from April 2021 to March
2022. Gas prices were even more volatile with an increase of more
than five times from April 2021 to the peak during March 2022,
before falling back in April 2022 to a level still more than three
times higher than a year earlier. Increases in prices across the
wind, solar and anaerobic digestion ("AD") assets, including from
the effect of replacing expiring Power Purchase Agreements ("PPAs")
with new fixed price arrangements, have increased the NAV by
5.0p.
In addition to this, a further 8.4p has been generated from
changes in electricity price assumptions at two bio-energy projects
that were previously held at acquisition cost in the 31 December
2021 valuation. These assets, ETA Energy-from-Waste in Italy and
Cramlington biomass CHP ("Cramlington") in the UK, were acquired in
the summer of 2021, prior to the subsequent significant increases
in prices that have been seen in gas and electricity markets. Both
are baseload generators and had limited fixed price contracts in
place at the time of acquisition, making them well-placed to
benefit from recent rises.
JLEN's policy is to reflect contractual fixed price
arrangements, where they exist, and short term market forward
prices for the next two years where they do not. After the initial
two-year period, the project cash flows assume future electricity
and gas prices in line with a blended curve informed by the central
forecasts from three established market consultants, adjusted for
project-specific arrangements and price cannibalisation as
required. At the valuation date, the extent of generation subject
to fixes is as follows:
Summer Winter
'22 '22
Wind 87% 69%
Solar 100% 100%
Thermal 56% 19%
AD - electric 100% 100%
AD - gas 73% 76%
On an equivalent MWh basis across the electricity and gas
generating assets, the portfolio is 76% fixed for Summer '22, 64%
fixed for Winter '22 and 47% fixed for Summer '23. When considered
together with the high proportion of revenues that are derived from
subsidies and long term contracts, JLEN has a high degree of
confidence over revenues, subject to operational performance.
Inflation
The portfolio valuation includes actual inflation prior to the
valuation date. RPI inflation (being the key index referenced in
subsidy and contractual mechanisms in JLEN's portfolio) is then
assumed to be 5% for the remainder of 2022, before reverting to
JLEN's established assumption of 3% until 2030, dropping to 2.25%
thereafter. The combination of higher actual and near term
inflation has added 2.6p to the NAV.
Discount Rates
Discount rates have been reduced for onshore wind projects in
line with observed market benchmarks. The discount rate for JLEN's
investment in low-carbon refuelling infrastructure has also been
reduced as the rollout of new sites has continued satisfactorily. A
risk premium has been added to the discount rate for Cramlington,
as this asset is the most sensitive to changes in near term
electricity prices. It is expected that the premium will be removed
progressively as uncertainty around actual prices captured reduces.
Cramlington currently has 50% of merchant revenues fixed for the
current Summer '22 season.
The net effect of changes to discount rates is to increase the
NAV by 1.0p.
Portfolio update
During the financial year to 31 March 2022, the renewables
portfolio of the Company was 6% below target in terms of energy
generated. Low wind resource was a primary driver of this as the UK
experienced its lowest wind speeds for 20 years over the summer
months of 2021. Positive performances against target generation
came from the AD and solar portfolios. The waste and bioenergy
sub-sector, which is now the second largest contributor to
generation on the portfolio, was also below target and the
Investment Manager has been working on installing upgrades to
improve resilience and value enhancements where identified,
particularly on the newly acquired assets.
The waste and wastewater concession-based projects continue to
deliver distributions in line with expectations and have performed
well against contractual targets.
The portfolio of CNG refuelling stations acquired in December
2021 performed extremely well over the financial year and 16% more
CNG was dispensed than was targeted for the year. Two further
refuelling stations were successfully completed over the year,
giving a total of eight stations with another station due to be
completed later this year.
Over the course of the year, JLEN has continued to grow its
portfolio by acquiring three new assets. This includes two assets
which further diversify the Company's portfolio into biomass CHP
and energy-from-waste and two investments into battery storage
assets.
At the year end, the battery assets, one CNG refuelling station
and certain investments in European renewables projects, held
through JLEN's commitment to FEIP, are in construction and are
valued at cost.
Dividend
The Company also announces a quarterly interim dividend of 1.70
pence per share for the period from 1 January 2022 to 31 March
2022.
Together with the interim dividends paid during the financial
year to date of 5.1 pence per share, the Company will have paid
total dividends of 6.80 pence per share in respect of the year
ended 31 March 2022, in line with the dividend target set out in
the 2021 Annual Report.
The Company also announces an increase in the target dividend
for the upcoming financial year of 5 per cent to 7.14(1) pence per
share for the financial year to 31 March 2023.
Dividend Timetable
Ex-dividend 1 June 2022
date
Record date 6 June 2022
Payment date 24 June 2022
This announcement contains information that is inside
information for the purposes of the Market Abuse Regulation (EU)
No. 596/2014.
For further information, please visit www.jlen.com or
contact:
Foresight Group
Chris Tanner
Chris Holmes +44(0)20 3667 8100
Winterflood Investment Trusts
Neil Langford
Chris Mills +44(0)20 3100 0000
SEC Newgate
Elisabeth Cowell +44(0)20 3757 6882
Sanne Fund Services
Matt Falla
Gemma Woods +44(0)1481 755530
About JLEN
JLEN's investment policy is to invest in a diversified portfolio
of Environmental Infrastructure. Environmental Infrastructure is
defined by the Company as infrastructure assets, projects and
asset-backed businesses that utilise natural or waste resources or
support more environmentally friendly approaches to economic
activity, support the transition to a low carbon economy or which
mitigate the effects of climate change. Such investments will
typically feature one or more of the following characteristics:
-- long-term, predictable cash flows, which may be wholly or
partially inflation-linked cash flows;
-- long-term contracts or stable and well-proven regulatory and legal frameworks; or
-- well-established technologies, and demonstrable operational performance.
JLEN's aim is to provide investors with a sustainable,
progressive dividend per share, paid quarterly and to preserve the
capital value of the portfolio over the long term on a real basis.
The target dividend for the year to 31 March 2023 is 7.14 pence per
share(1) . The dividend is payable quarterly.
Further details of the Company can be found on its website
www.jlen.com
LEI: 213800JWJN54TFBMBI68
( (1) These are targets only and not profit forecasts. There can
be no assurance that these targets will be met or that the Company
will make any distributions at all.
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