TIDMNESF
RNS Number : 1296J
NextEnergy Solar Fund Limited
08 April 2020
8 April 2020
NextEnergy Solar Fund Limited
("NESF" or "Company")
Operating Update
NextEnergy Solar Fund, the solar power renewable energy
investment company, is pleased to provide the following operational
update.
Highlights
-- Generation (unaudited) in the financial year ended 31 March
2020 was 4.7% above budget (2019: 9.1%)
-- Financial debt* of 21% as at 31 March 2020 (2019: 27%)
-- Full-year dividend target of 6.87p reaffirmed for financial
year ended 31 March 2020 (2019: 6.65p)
-- For market revenues, fixed price electricity sales contracts
in place for 95% of generation for summer 2020 and 50% for winter
2020/21
-- Energisation of subsidy-free new-build asset High Garrett (8.5MW) is expected in Q3 2020
-- COVID-19 pandemic has not had any significant impact on the
Company or its underlying portfolio
* Excludes preference shares (see Balance Sheet Strength
below)
2019/20 Portfolio Performance (Unaudited)
During the year ended 31 March 2020, solar irradiation across
the portfolio was 4.0% above budget (2019: 9.0%), generation was
4.7% above budget (2019: 9.1%) and Asset Management Alpha was 0.7%
(2019: 0.1%). Asset Management Alpha would have been 1.5% (2019:
1.1%) if distribution network outages were excluded.
The UK portfolio performed above expectations with generation
outperformance of 4.6% (2019: 9.4%) and an Asset Management Alpha
of 0.7% (2019: -0.1%).
The Italian portfolio also performed above expectations during
the year with 6.4% (2019: 5.4%) extra generation over budget and an
Asset Management Alpha of 1.3% (2019: 2.5%).
2020/21 Electricity Sales
For the current financial year ending 31 March 2021, NESF
estimates approximately 61% of revenues in the UK will be derived
from regulated revenues (renewable obligation certificates and
others), and approximately 39% of revenues will be derived from the
sale of its electricity generation under short-term and medium-term
contracts. Of the market revenues derived from the sale of
electricity generation, the Company has secured fixed price
agreements covering 95% of its electricity generation for the
summer of 2020 and fixed price agreements covering 50% of its
electricity generation for the 2020/21 winter. These agreements
were concluded during calendar year 2019 and at prices well above
the current market prices.
In Italy, approximately 83% of revenues will be derived from
regulated revenues (principally feed-in-tariffs) and approximately
17% of revenues will result from the sale of electricity generated
under short-term contracts, of which the Company has secured fixed
price agreements covering 100% of its electricity generation until
the end of the calendar year. These fixed price agreements were
entered into during calendar year 2019 and at prices well above the
current market prices. The majority of the expected cash flows from
the Italian portfolio are covered by a currency hedge for the
period up to 2032, which includes all hedging costs.
The power purchase agreement counterparties both in the UK and
Italy are all of investment grade quality.
Balance Sheet Strength
As at 31 March 2020, the Company's subsidiaries had consolidated
financial debt outstanding of GBP214m on a look-through basis,
including project-level debt. Of the financial debt, GBP195m
comprises two long-term fully amortising debt facilities and GBP19m
was drawn under a short-term credit facility.
At the financial year-end, NESF had GBP51.5m undrawn from two
short-term credit facilities and significant year-end cash
holdings. One short-term credit facility of GBP20m has been
extended to February 2022 and the other of GBP70m is currently
under negotiation for an extension from July 2020 to July 2022.
The total financial debt represented 21% of gross asset value as
at 31 March 2020. As at 31 March 2020, the aggregate gearing
comprising the total financial debt and the Company's preference
shares represented 40% of gross asset value (2019: 39%). The
preference shares are irredeemable save for in the event of a
change in control or delisting of the Company and then only at the
option of the holders.
Dividend
NESF confirms its target of a full-year dividend of 6.87p per
Ordinary Share for the financial year ended 31 March 2020, with the
fourth interim dividend due to be declared in May 2020 for payment
in June 2020. The forecast full-year dividend represents a yield of
5.9% based on yesterday's closing share price of 115.6p. The
Company intends to offer the scrip dividend alternative again for
the next dividend payable in June 2020.
Subsidy-free Construction Update
NESF has completed initial site entry works on its subsidy-free
plant High Garrett, an 8.5MWp extension to an existing 5MWp ROC
asset acquired in 2016. Subject to current COVID-19 impacts, major
construction works are planned to commence shortly and energisation
is expected to take place towards the end of Q3 2020.
COVID-19 Contingency Planning
The Company would like to reassure investors that NESF and the
NextEnergy Capital Group, as Investment Manager, continue to
monitor the COVID-19 pandemic and have taken actions where
necessary to protect employees and maintain the Company's
operations.
The Company built up a stock of spare parts during H2/2019 and
is currently not expecting any significant complications along its
spare parts supply chain. The Company's key service providers have
continued to provide contracted services. The Investment Manager
remains in close contact with them and continuously monitors and
reviews their ability to perform in light of the COVID-19 pandemic
developments.
Workers in the electricity sector are considered key workers
and, to date, NESF has not experienced any significant technical,
operational or financial impacts on its portfolio resulting from
effects of the COVID-19 pandemic, and will continue to work with
its Investment Manager, partners and suppliers to anticipate and
mitigate, where possible, arising risks.
For further information:
NextEnergy Capital Limited 020 3746 0700
Michael Bonte-Friedheim
Aldo Beolchini
Cenkos Securities Plc 020 7397 8900
Justin Zawoda-Martin
Robert Naylor
William Talkington
Shore Capital 020 7408 4090
Anita Ghanekar
Darren Vickers
MHP Communications 020 3128 8100
Oliver Hughes
Apex Fund and Corporate Services
(Guernsey) Limited 01481 735 827
Nick Robilliard
Notes to Editors [i] :
A constituent of the FTSE 250 Index, NextEnergy Solar Fund
("NESF") is a renewable energy infrastructure investment company
that invests primarily in operating solar power plants in the UK
(it may invest up to 15% of its gross assets in other OECD
countries). The Company is committed to ESG principles and
responsible investment and makes a meaningful contribution to
reducing CO2 emissions through the generation of clean solar power.
NESF has been designated a Guernsey Green Fund by the Guernsey
Financial Services Commission and has been awarded the London Stock
Exchange's Green Economy Mark.
NESF has a diversified portfolio comprising 90 operating solar
assets, primarily on agricultural, industrial and commercial sites,
with a combined installed power capacity in excess of 755MW. As at
31 December 2019, the Company has gross assets of GBP1,032 million,
of which 89% is invested in the UK, and net assets of GBP620
million. The majority of long-term cash flows from its investments
are inflation-linked.
NESF's investment objective is to provide ordinary shareholders
with a sustainable and attractive dividend that increases in line
with RPI over the long term, while delivering an element of capital
growth through reinvesting net cash generated in excess of the
target dividend. The dividend is payable quarterly and the Company
is targeting a total dividend for the year to 31 March 2020 of
6.87p per ordinary share.
NESF is differentiated by its access to NextEnergy Capital Group
("NEC Group"), its Investment Manager, which has a strong track
record in sourcing, acquiring and managing operating solar assets.
WiseEnergy is NEC Group's specialist operating asset management
division, which currently provides operating asset management,
monitoring, technical due diligence and other services to over
1,300 utility-scale solar power plants with an installed capacity
in excess of 1.9 GW.
Further information on NESF, NEC Group and WiseEnergy is
available at www.nextenergysolarfund.com, www.nextenergycapital.com
and www.wise-energy.eu.
[i] Note: All data is as at 31 December 2019, being the latest
date in respect of which NESF has published financial
information.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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