Factsheet and Net Asset Value

RNS Number : 3734K

Octopus Renewables Infra Trust PLC

05 May 2022

 

5 May 2022

LEI: 213800B81BFJKWM2JV13

Octopus Renewables Infrastructure Trust plc

("ORIT" or the "Company")

Factsheet and

Net Asset Value

The Board of Octopus Renewables Infrastructure Trust plc announces that the unaudited net asset value ("NAV") of the Company as at 31 March 2022 on a cum-income basis was 587.5 million or 104.0 pence per ordinary share. This is an increase of £9.8 million or 1.74 pence per ordinary share compared with 31 December 2021.

A significant portion of the uplift was driven by increases in short-term wholesale energy price forecasts, particularly in Sweden, Poland and Finland (+£10.2 million). The actual achieved pricing for January to March 2022, particularly in Sweden, was materially below the forward price forecast used in the valuation of the Company as at 31 December 2021 (-£6.2 million). Following increases in the power price observed over recent months, the Company has fixed pricing on a significant portion of output for the remainder of 2022 and 2023 at the Ljungbyholm, Saunamaa and Suolakangas wind farms in Sweden and Finland. As at 31 March 2022, 56% of ORIT's forecast revenue over the 24-month period to 31 March 2024 is fixed (50% over the 24-month period to 31 December 2023 as at 31 December 2021). Following additional hedging carried out during April, this figure has increased to 61% as at 30 April 2022, excluding the recent impact of the Lincs offshore wind farm acquisition.

The Investment Manager has observed that during the recent periods of heightened price volatility in power markets, the 'capture price discount' between prices received by wind generators in the Nordics and the time-weighted average power price has been higher than that assumed by market advisors. Therefore, during the remainder of 2022 and 2023 where power prices are forecast to remain high, the valuation includes an increased capture price discount of 20% from the average forward price on the revenue that is not fixed in Sweden and Finland.

A gain was recognised on the achievement of full operations at the Krzecin wind farm in Poland (+£0.3 million). As the remaining assets under construction (Cerisou, Cumberhead and Kuslin windfarms in France, the UK and Poland respectively) become substantially de-risked through the completion of construction milestones, it is currently estimated that a further £7.9 million of value will be crystallised in future valuation cycles. All of the Company's assets currently under construction are expected to achieve operational status by the end of 2022.

Other significant valuation impacts include increases to short-term inflation forecasts across all jurisdictions (+£8.5 million), and a reduction to discount rates of 30bps and 15bps in France and the Nordics respectively, which are supported by market pricing observed on multiple recent transactions (+£4.8 million).

These movements were partially offset by an adjustment to the UK corporation tax assumption, reflecting an increased tax rate of 25% for the remainder of the assets lives (-£4.8 million). The calculation of the NAV as at 31 December 2021 was based on an assumption that this increased rate remained in place for three years, before trending down by 1% per year until reduced to the current level of 19% over the long-term.

Other valuation movements amounting to -£3.0 million, include the expected return on investments net of dividends paid, Company operating costs and transaction costs.

Factsheet

The Company's Q1 2022 factsheet is available to download at:

https://octopusrenewablesinfrastructure.com/investors/

For further information please contact:

Octopus R enewables Limited (Investment Manager) Matt Setchell, Chris Gaydon, David Bird	Via Buchanan
Peel Hunt (Broker) Liz Yong, Luke Simpson, Huw Jeremy (Investment Banking) Alex Howe, Chris Bunstead, Ed Welsby, Richard Harris (Sales)	020 7418 8900
Buchanan (Financial PR) Charles Ryland, Hannah Ratcliff, George Beale	020 7466 5000
Sanne Fund Services (UK) Limited (Company Secretary)	020 3327 9720

Notes to editors

About Octopus Renewables Infrastructure Trust

Octopus Renewables Infrastructure Trust plc is a closed end investment company incorporated in England and Wales focused on providing investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of renewable energy assets in Europe and Australia.

Further details can be found at www.octopusrenewablesinfrastructure.com  

About Octopus Renewables

Octopus Renewables is a specialist clean energy investor. Launched in 2010 its mission is to accelerate the transition to a future powered by renewable energy. It has a diverse portfolio of assets with a capacity of over 2.8GW, making it the largest commercial solar investor in Europe and a leading investor in onshore wind.

Octopus Renewables is also leading the next wave of renewables being built across Europe and Australia without government subsidies. There is a significant opportunity to unblock much needed investment by building bespoke portfolios of renewable assets at scale, across technologies and countries, to create better outcomes for our investors.

Further details can be found at www.octopusrenewables.com  

Neither the content of any website referred to in this announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this announcement.

 

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