TIDMNESF
RNS Number : 8105P
NextEnergy Solar Fund Limited
22 February 2021
LEI: 213800ZPHCBDDSQH5447
22 February 2021
NextEnergy Solar Fund Limited
("NESF" or the "Company")
Net Asset Value and Operational Update
NextEnergy Solar Fund, the FTSE 250 solar power renewable energy
investment company, is pleased to announce the following
operational update and its unaudited Net Asset Value ("NAV") as at
31 December 2020.
NESF's operating activities continue to be resilient during the
COVID-19 pandemic and the Company remains well-placed to meet its
investment objective of providing shareholders with an attractive
risk-adjusted return from a diversified portfolio of primarily
UK-based solar infrastructure assets.
Financial highlights
-- Increase in NAV per ordinary share to 100.7p (30 September 2020: 99.6p)
-- Increase in ordinary shareholders' NAV to GBP591m (30 September 2020: GBP583.5m)
-- Second interim dividend of 1.7625p per ordinary share for the
year ending 31 March 2021 (31 March 2020: 1.7175p)
Operational highlights
-- 763 MWp total capacity installed to date (30 September 2020:
755 MWp), across 91 operating solar assets with 8.5 MWp added to
the subsidy-free portfolio
-- Strong operational resilience through COVID-19 pandemic with
year-to-date portfolio outperformance
-- Electricity generation was 8.1% above budget year-to-date
("YTD"), generating c.GBP5.1m in additional revenue
-- Irradiation levels exceeded expectations by 7.3% YTD
-- Asset management alpha of 0.8% YTD, attributable to the added
value of active management and operation of the portfolio by the
investment manager and asset manager
-- Generated additional revenue of c.GBP7m from NESFs power price strategy
-- Conservative risk approach, actively hedging future power prices securing future cash flows
-- 100% of budgeted generation for the 2020/21 financial year hedged at fixed prices*
-- 83% of budgeted generation for the 2021/22 financial year
hedged at an average price of over GBP48/MWh* (compared with
GBP43.5/MWh power price forecasts)
-- 32% of budgeted generation for the 2022/23 financial year
hedged at an average price of over GBP50/MWh* (compared with
GBP46/MWh power price forecasts)
*Covers the sale of electricity at market prices on 725MW of UK
assets, as at 19 February 2021.
Subsidy-free asset portfolio
NESF remains on track to reach its subsidy-free target of 150
MWp through its project pipeline during the 2021/22 financial year.
With three operational subsidy-free solar projects among its
portfolio, NESF continues to lead the UK solar industry's
transition from a subsidy-based regime to one that provides clean
electricity at market competitive terms without the need for
support from consumers or regulators.
Increase in NAV
The increase in NAV was primarily driven by a 0.25% reduction in
the unlevered discount rate to 6.0% for UK operating assets. The
Board considered it appropriate to reduce the discount rate as a
result of the observed increased market valuations of operating
solar plants in the UK as well as the impact of the reduction in UK
interest rates.
Changes in the Company's power price forecasts had a minimal
effect on the NAV this quarter due to the power price hedges
implemented and the short-term rise in power prices being offset by
both lower medium to long-term price forecasts as provided by the
Company's independent consultants.
Inflation expectations have remained in-line with NESF
forecasts.
Attractive dividend
NESF is targeting a dividend of 7.05p per ordinary share in
respect of the financial year ending 31 March 2021 (2020: 6.87p).
The forecast full-year dividend represents a yield of c.7% based on
Friday's closing share price of 100.4p.
Future pipeline
NESF continues to advance a pipeline of UK and international
solar assets to achieve its growth and expansion objectives. The
Company has sufficient financial flexibility through its two
revolving credit facilities to pursue selected growth
opportunities.
Factsheet
The Company's December 2020 factsheet is available now on the
Company's website nextenergysolarfund.com
Kevin Lyon, NextEnergy Solar Fund Chairman, commented:
"I am pleased that, following what has been an extremely
challenging period for all, NESF can present an increase in NAV.
NESF entered the final quarter of this financial year in a very
strong position, having secured attractive prices for the totality
of expected generation this current financial year, plus a
significant portion of expected generation for 2021/22. We look
forward to updating the market further regarding our growing
pipeline of attractive UK and international opportunities."
Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy
Capital, commented:
"The successful active management of NESF's assets in the year
was clear as the Group enjoyed above-budget electricity generation,
good asset management alpha from our portfolio management, and a
significant cash benefit from our power price contract fixes.
Progress towards our subsidy-free goal of 150 MWp is on track as
NESF continues to lead the market in a transition to a subsidy-free
model in the UK and beyond."
For further information:
NextEnergy Capital Group 020 3746 0700
Michael Bonte-Friedheim ir@nextenergysolarfund.com
Aldo Beolchini
Ross Grier
Peter Hamid (Investor Relations)
Cenkos Securities 020 7397 8900
James King
William Talkington
Shore Capital 020 7408 4090
Anita Ghanekar
Darren Vickers
Fiona Conroy (Corporate Broking)
Camarco 020 3781 8334
Owen Roberts
Eddie Livingstone-Learmonth
Apex Fund and Corporate Services (Guernsey)
Limited 01481 735 827
Nick Robilliard
Notes to Editors(1) :
About NextEnergy Solar Fund
A constituent of the FTSE 250 Index, NextEnergy Solar Fund is a
renewable energy infrastructure investment company that currently
invests in operating solar power plants in the UK and Italy. The
Company may invest up to 30% of its gross asset value in non-UK
OECD countries, 15% in private equity structures, and 10% in
standalone energy storage.
NESF currently has a diversified portfolio comprising 91
operating solar assets, primarily on agricultural, industrial, and
commercial sites, with a combined installed power capacity of
c.763MW.
As at 31 December 2020, the Company had gross assets of GBP1,001
million, of which 88% was invested in the UK, and net assets of
GBP591 million. The majority of long-term cash flows from its
investments are inflation-linked.
NESF's investment objective is to provide ordinary shareholders
with attractive risk-adjusted returns, principally in the form of
regular dividends, by investing in a diversified portfolio of
primarily UK-based solar energy infrastructure assets. The dividend
is payable quarterly, and the Company has announced a dividend
target for the year ending 31 March 2021 of 7.05p per ordinary
share.
Committed to ESG
NESF is committed to ESG principles and responsible investment
which make a meaningful contribution to reducing CO2 emissions
through the generation of clean solar power. NESF will only select
investments that meet the requirements of NEC Group's Sustainable
Investment Policy. Based on this policy, NESF benefits from NEC's
rigorous ESG due diligence on each investment. NESF is committed to
reporting on its ESG performance in accordance with the UN
Sustainable Development Goals framework and the EU Sustainable
Finance Disclosure Regulation.
NESF has been awarded the London Stock Exchange's Green Economy
Mark and has been designated a Guernsey Green Fund by the Guernsey
Financial Services Commission.
For further information on NESF please visit
nextenergysolarfund.com
About NextEnergy Capital Group ("NEC Group")
NESF is managed by the NextEnergy Capital Group, a specialist
solar investment manager, which has a strong track record in
sourcing, acquiring, and managing operating solar assets. NEC Group
is a leading player in the global solar investment sector and has
over 190 team members with offices in UK, Italy, India, and the USA
and assets under management of over $2.3bn across three
institutional funds.
NextEnergy Capital Group donates 5% of its net annual profits to
NextEnergy Foundation. NextEnergy Foundation is an international
charity that was founded in 2016. Its mission is to participate
proactively in the global effort to reduce carbon emissions,
provide clean power sources in regions where they are not yet
available, and contribute to poverty alleviation.
For further information on NEC Group please visit
nextenergycapital.com
For further information on NextEnergy Foundation visit
nextenergyfoundation.org
About WiseEnergy
WiseEnergy is NEC Group's specialist operating asset management
division. NESF is differentiated by its access to WiseEnergy, which
has provided operating asset management, monitoring, technical due
diligence, and other services to over 1,500 utility-scale solar
power plants with an installed capacity in excess of 2.3GW.
For further information on Wise Energy please visit
wise-energy.com
([1]) Note: All financial data is as at 31 December 2020, being
the latest date in respect of which NESF has published financial
information
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