TIDMNESF
RNS Number : 5881Y
NextEnergy Solar Fund Limited
13 May 2021
LEI: 213800ZPHCBDDSQH5447
13 May 2021
NextEnergy Solar Fund Limited
("NESF" or the "Company")
Quarterly Net Asset Value, Operational Update and Interim
Dividend
NextEnergy Solar Fund, the specialist solar power renewable
energy investment company, announces its unaudited Net Asset Value
("NAV") as at 31 March 2021, its latest operational update and its
final interim dividend for the year ended 31 March 2021.
The Company continues to outperform operationally, despite
disruptions resulting from the COVID-19 pandemic, and remains
well-placed to provide shareholders with an on-going attractive
risk-adjusted return from a diversified portfolio of solar
infrastructure assets.
Financial highlights
-- Unaudited NAV per ordinary share of 98.9p (31 December 2020: 100.7p)
-- Ordinary shareholders' unaudited NAV of GBP581m (31 December 2020: GBP591m)
-- Interim dividend of 1.7625p per ordinary share for the
quarter ending 31 March 2021 (31 March 2020: 1.7175p)
-- Total dividend of 7.05p per ordinary share in respect of the
year ended 31 March 2021 (year ended 31 March 2020: 6.87p per
ordinary share)
Operational highlights
-- 814MW total capacity installed to date across 94 operating
solar assets (31 December 2020: 763 MW and 91 operating solar
assets)
-- 100MW acquisition of two UK assets under construction for a
consideration of c.GBP64.3m, both with a 15-year corporate power
purchase agreement ("PPA") with AB InBev, the world's largest
brewer
-- Successfully energised two assets with a 25-year corporate
PPA with utility provider, Anglian Water Group (1.5MW)
-- Continued operational resilience and outperformance through COVID-19 pandemic
-- Electricity generation was 6.2% above budget for the year
ended 31 March 2021, generating c.GBP4.8m in additional revenue
-- Irradiation levels exceeded expectations by 5.5%, for the year ended 31 March 2021
-- Asset management alpha of +0.7% for the year ended 31 March 2021
-- Continued active hedging strategy securing future UK contracted revenues*:
Ø 2021/22 financial year: 87% of budgeted generation hedged
Ø 2022/23 financial year: 63% of budgeted generation hedged
*As at 13 May 2021, covers c.95% of total portfolio (775MW)
NAV
The Company's latest unaudited NAV reduction reflects the
current market environment, taking into account changes in the
power price forecasts provided by the Company's three independent
consultants (-2.1p per ordinary share from 31 December 2020 to 31
March 2021), the recent Budget announcement with UK corporation tax
rate rising to 25% from 2023, expected to remain in place for the
remainder of the life of the portfolio (-1.8p per ordinary share
from 31 December 2020 to 31 March 2021), and small changes in
inflation expectations.
These reductions were offset by the Company's operating
outperformance, the acquisition of the 100MW Camden portfolio which
was financed by a drawdown on the existing revolving credit
facility ("RCF"), and a reduction of 0.25% in the unlevered
discount rate to 5.75% for UK operating assets (resulting from
market values observed on transactions in the secondary market for
UK solar assets) taking the weighted average discount rate to
6.3%.
The above NAV numbers are unaudited and the Company will publish
an audited NAV as at 31 March 2021 as part of its final results for
the year.
Power price strategy
The Company continues to benefit from NextEnergy Capital's
specialist energy sales desk, which drives the successful
monitoring and implementation of NESF's forward hedging strategy.
This strategy, which also includes various long-term Power Price
Agreements, is designed to secure high levels of revenue certainty
across the NESF portfolio and mitigate exposure to short-term
fluctuations in power prices. The Company generally seeks to hedge
the majority of its market exposure over any forward 24-month
period, leveraging its market expertise for the implementation and
pricing of hedges.
During the 2020/21 financial year, this strategy reduced the
Company's exposure to lower power prices resulting from reduced
electricity demand due to the COVID-19 pandemic, lower UK gas
prices and warmer weather patterns. It also resulted in a c.GBP7m
revenue uplift when compared to the market power prices over the
year.
The current UK power market prices continue to improve, in
contrast to 2020, following colder weather patterns, low gas supply
and storage levels, and sustained demand for electricity. The
Company has taken advantage of these recent higher power prices to
hedge the majority of its expected generation for the 2021/22 and
2022/23 financial years at prices significantly above the
projections provided by its three independent market
consultants.
Dividend
The Company is pleased to announce an interim dividend of
1.7625p per ordinary share for the quarter ended 31 March 2021.
This will be paid on 30 June 2021 to shareholders on the register
as at the close of business on 21 May 2021. The ex-dividend date is
20 May 2021.
The Company will also be offering shareholders a scrip dividend
alternative to this interim dividend as detailed in the Scrip
Circular dated 19 August 2020, a copy of which can be viewed and /
or downloaded from 'Circulars' in the Investor Relations part of
the NESF website (nextenergysolarfund.com). The Scrip Share
reference price will be announced on 27 May 2021, with elections to
be made by 4 June 2021.
NESF achieved its target of delivering a dividend of 7.05p per
ordinary share in respect of the financial year ended 31 March 2021
(2020: 6.87p).
Future pipeline
In line with its investment policy, the Company continues to
advance a significant pipeline of exciting opportunities in
international solar assets, domestic energy storage assets and
investments in private equity structures. This pipeline, when
converted will complement the Company's existing portfolio, with a
view to achieve higher financial returns with increased
geographical, technology, and revenue diversification.
Kevin Lyon, NextEnergy Solar Fund Chairman, commented:
"I am encouraged with the on-going outperformance of our
portfolio, as we successfully increased installed capacity and the
asset base through value-enhancing acquisitions. Whilst COVID has
presented a number of pricing and disruptive challenges, a strong
operating performance has helped to mitigate this impact and
enabled us to deliver an increased dividend from the previous
year."
Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy
Capital, commented:
"I am pleased that NESF delivered its target total dividend for
the year and, whilst the economic environment has put pressure on
the sector's NAV, our excellent operational performance offset some
of these challenges. We added to our installed capacity with high
quality PPAs, and we are continuing to explore a strong pipeline of
exciting growth opportunities, both in the UK and internationally,
in line with last year's revised investment policy."
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
Sarah Mather
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
NextEnergy Solar Fund is a renewable energy infrastructure
investment company that currently owns operating solar power plants
in the UK and Italy. The Company may invest internationally 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 94
operating solar assets, primarily on agricultural, industrial, and
commercial sites, with a combined installed power capacity of
c.814MW.
As at 31 March 2021, the Company had gross assets of GBP1,025
million, of which 88% was invested in the UK, and net assets of
GBP581 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 achieved its dividend
target for the year ended 31 March 2021 of 7.05p per ordinary
share.
For further information on NESF please visit
nextenergysolarfund.com
Commitment 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.
NESF's sustainability-related disclosures in the financial
services sector in accordance with Regulation (EU) 2019/2088 can be
accessed on the ESG section of both the NESF website (
nextenergysolarfund.com/esg/ ) & NEC Group website (
nextenergycapital.com/sustainability/transparency-and-reporting/
).
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 USA and
assets under management of over $2.5bn across three institutional
funds.
NEC 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 unaudited as at 31 March 2021,
being the latest date in respect of which NESF has published
financial information
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