Net Asset Value and portfolio update

HydrogenOne Capital Growth PLC

10 May 2023

 

HydrogenOne Capital Growth plc ("HydrogenOne" or the "Company")

LEI: 213800PMTT98U879SF45

10th May 2023

Net Asset Value and portfolio update

HydrogenOne, the first London-listed fund investing in clean hydrogen for a positive environmental impact, today announces its quarterly net asset value and portfolio update for the period ended 31 March 2023.

Key highlights for the quarter

·      Positive industry outlook underpinned by macro tailwinds in the hydrogen sector and supportive regulatory regimes in the USA and Europe. UK Government selection of 20 green hydrogen projects as funding candidates announced in the quarter;

·      Net Asset Value ("NAV") per share of the Company 100.00 pence, an increase of 3.3% from 31 March 2022, and 2.8% from 31 December 2022;

·      Increased valuations in both private and listed hydrogen assets compared to 31 December 2022; NAV includes 1.14p reduction for accrual of carry;

·      Growth delivery from private portfolio companies, delivering an aggregate £40m in total revenue in the 12 months to March 2023, an increase of 107% compared to the 12 months to March 2022;

·      First investment in a clean hydrogen production project in Germany; £2.5m commitment;

·      Investments in the quarter totalling £5.4m;

·      Cash and cash equivalents of £12.5m, and £3.8m of listed hydrogen companies at the end of the quarter;

·      The Company hosted a Capital Markets Day, which included presentations from the management teams of each of the private portfolio companies.

Net asset value

At 31 March 2023, the unaudited NAV per share of the Company was 100.00 pence, representing a quarterly increase of 2.8% from 31 December 2022, and an increase of 3.3% from 31 March 2022. The Company had net assets of £128.8 million at that date.

The quarterly increase was driven primarily by valuation uplifts to the Company's portfolio of private investments, positively contributing 4.45 pence (4.6%) per share to the NAV movement.

NAV movements

Opening NAV per share at 31 Dec 2022	97.31p
Portfolio valuation uplifts including FX impacts	4.53p
Company expenses	(0.70)p
Accrual for Investment Adviser carry	(1.14)p
Closing NAV per share at 31 March 2023	100.00p

Financial summary

	31 March 23	31 Dec 22	Change	31 March 22	Change
NAV	£128.8m	£125.3m	2.8%	£104.0m	23.8%
NAV per share	100.00p	97.31p	2.8%	96.83p	3.3%
Portfolio valuation	£117.4m	£106.8m	10.0%	£69.9m	68.0%
Portfolio fair value gain / (loss) on cost	£11.0m	£5.6m	95.2%	£0.7m	n/a
Other net assets (incl cash)	£11.4m	£18.5m	-38.6%	£34.1m	-66.6%

Portfolio

·    At 31 March 2023, the Company has invested in ten private investments, in the UK and Europe, representing 96.7% of its invested portfolio by value. Additional investment in strategic, global hydrogen equities represented 3.3% of the invested portfolio, in revenue generating businesses.

·    The portfolio continues to perform in line with the expectations of the Investment Adviser, HydrogenOne Capital LLP.

·    Eight of the Company's ten private investments, representing 93% of its invested portfolio by value, are revenue-generating, producing equipment and technology solutions for clean hydrogen production. The unaudited aggregate revenue from these investments was c. £40m in the 12-month period to 31 March 2023, an increase of 107% compared to the 12 months to March 2022, on a pro-forma basis

·      The portfolio weighted average discount rate at 31 March 2023 was 13.0% (31 December 2022 12.9%; 31 March 2022 12.5%).

Portfolio developments

·    Cranfield Aerospace Solutions Ltd, a UK hydrogen flight innovator (6.8% of NAV). After the end of the quarter, Cranfield announced a Heads of Terms with Britten-Norman, to merge and to create the world's first fully integrated, zero-emissions aircraft, for entry into service in 2026. The proposed combination would accelerate and de-risk the commercialisation of Cranfield's hydrogen flight technology.

·    Elcogen Plc, a solid oxide fuel cell and electrolyser manufacturer in Estonia and Finland: (16.1% of NAV). Elcogen signed a memorandum of understanding covering green hydrogen with Korea Shipbuilding and Offshore Engineering, a member of Hyundai Heavy Industries Group, one of the world's largest shipbuilders, and the Germany based Fraunhofer Institute for Ceramic Technologies and Systems.

·    HH2E is a green hydrogen project developer with a focus on industrial customers in Germany: (3.7% of NAV). HH2E announced its second major green hydrogen production project in Germany, a 100MW facility at Thierbach. A final investment decision is expected in the second half of 2023. HH2E agreed to purchase of 120MW of alkaline electrolyzer equipment from NEL ASA. The total value of the contract is approximately EUR 34 million, and the equipment will be used in multiple HH2E green hydrogen projects in Germany.

·    NanoSUN Limited, a UK-based developer of hydrogen distribution and mobile refuelling equipment: (10.5% of NAV).  NanoSUN continued deliveries of new Pioneer Mobile Refuelling Stations to customers, including two units to Octopus Hydrogen in the UK and one unit to Westfalen in Germany. NanoSUN commenced collaboration and contract manufacturing with TIS Manufacturing, in Aberdeen, UK, for NanoSUN's Pioneer Hydrogen Refuelling Stations.

·    Strohm Holding B.V., a Netherlands-based hydrogen pipeline company: (12.0% of NAV). Strohm delivered a major milestone by completing its plant expansion in the Netherlands. The new facility can produce some 140km of thermocomposite plastic ("TCP") pipeline per year, a three times increase on previous levels. Strohm was awarded its second contract for TCP pipeline for deployment in Guyana. This is the largest contract ever secured by Strohm.

·    Sunfire GmbH, the leading German industrial electrolyser producer: (18.9% of NAV). Sunfire launched a new serial production facility in Solingen, Germany with investment of E30m at the facility. Further expansion is underway at Solingen, taking Sunfire's total capacity to 500MW of alkaline electrolysis by the end of 2023. Sunfire announced a strategic partnership with Vitesco Technologies, who will combine Sunfire electrolysis cells into the stacks, that form the main element of electrolyzers.

Investment activity

·    The Company invested in three portfolio companies, and a green hydrogen project, at Thierbach in Germany (the "Thierbach Project"), totalling £5.4m in the quarter.

·    The Company will invest £2.5 million (EUR 2.8 million) in development activities at the Thierbach Project alongside other institutional investors and HH2E, of which the Company invested £0.8m in Q1 2023. Thierbach should reach Final Investment Decision in the second half of 2023, subject to technical and commercial studies, and funding. Should the Thierbach Project take FID, and the Company elects to not participate, then its £2.5m investment in the project will be returned with interest.

·    The Company has invested £1.5m in Cranfield Aerospace Solutions Ltd in April 2023, which could increase to up to £5m in a potential £10m funding round from existing investors alongside Safran Corporate Ventures and the Strategic Development Fund , on the completion of the merger of Cranfield and Britten-Norman.

·    The Company had cash and cash equivalents of £12.5m, and £3.8m of listed hydrogen companies at the end of the quarter, and remains well funded for its day-to-day activities.

Further details on the Company's private investments, including the new investments referenced above, can be found on its website at https://hydrogenonecapitalgrowthplc.com/portfolio/private-investments.

ESG

·    The Company is classified as an Article 9 Fund under the SFDR and EU Taxonomy Regulation.

·    The Company is a signatory of the United Nations-supported Principles for Responsible Investment.

·    The first reporting in accordance with the SFDR Article 9 requirements and the International Sustainability Standards Board framework was published with the FY2022 Annual Report, released in April 2023.

Factsheet and investor webinar

The 31 March 2023 factsheet is now available on the Company's website: https://hydrogenonecapitalgrowthplc.com/investors/factsheets/.

The Company's Investment Adviser, HydrogenOne Capital LLP, will be hosting a 30-minute live webinar presentation for investors and analysts on Q1 2023 Factsheet and NAV update commencing at 9am GMT today. 

In order to register for the webinar, please follow the link: https://www.investormeetcompany.com/hydrogenone-capital-growth-plc/register-investor.  

The presentation will also be available on the Company's website at https://hydrogenonecapitalgrowthplc.com/investors/documents-and-publications/.

Notes

This announcement is not an offer for sale or subscription or solicitation to purchase shares in any jurisdiction. This announcement contains inside information.

For further information, please visit www.hydrogenonecapitalgrowthplc.com or contact:

HydrogenOne Capital LLP - Investment Adviser	[phone]
Dr. JJ Traynor/Richard Hulf
Barclays Bank PLC - Corporate Broker Dion Di Miceli Stuart Muress	[phone] [e-mail]
FTI Consulting - Media Enquiries Matthew O'Keeffe Cally Billimore	[phone] [e-mail]

About HydrogenOne:

HydrogenOne is the first London-listed hydrogen fund investing in clean hydrogen for a positive environmental impact. The Company was launched in 2021 with an investment objective to deliver an attractive level of capital growth by investing in a diversified portfolio of hydrogen and complementary hydrogen focussed assets. INEOS Energy is a strategic investor in HydrogenOne. The Company is listed on the London Stock Exchange's main market (ticker code: HGEN). The Company is an Article 9 climate impact fund with an ESG policy integrated in investment decisions and asset monitoring.

IMPORTANT NOTICE

This announcement does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, shares in the Company in any jurisdiction. The distribution of this announcement outside the UK may be restricted by law. No action has been taken by the Company that would permit possession of this announcement in any jurisdiction outside the UK where action for that purpose is required. Persons outside the UK who come into possession of this announcement should inform themselves about the distribution of this announcement in their particular jurisdiction.

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and/or the plans of one or more of its investee companies or projects and their respective current goals and expectations relating to their respective future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward- looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward- looking statements.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, as it forms part of UK domestic law ("MAR"). Upon publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR. The person responsible for arranging the release of this announcement on behalf of the Company is HydrogenOne Capital LLP.

 

END