Information  X 
Enter a valid email address

Blackrock Energy And Resources (BERI)


Tuesday 17 May, 2022

Blackrock Energy And Resources

Portfolio Update

All information is at 30 April 2022 and unaudited.
Performance at month end with net income reinvested
One Three Six One Three Five
Month Months Months Year Years Years
Net asset value -1.6% 18.5% 25.3% 37.1% 86.3% 117.1%
Share price 2.4% 19.2% 33.1% 39.1% 101.3% 129.0%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 128.21p
Net asset value cum income1: 128.92p
Share price: 130.00p
Premium to NAV (cum income): 0.8%
Net yield: 3.2%
Gearing - cum income: 9.2%
Total assets: £165.6m
Ordinary shares in issue2: 128,440,391
Gearing range (as a % of net assets): 0-20%
Ongoing charges3: 1.21%
1 Includes net revenue of 0.71p.
2 Excluding 0 ordinary shares held in treasury.
3 Calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation for the year ended 30 November 2021.
Sector Overview
Mining 38.6%
Traditional Energy 38.2%
Energy Transition  22.8%
Net Current Assets    0.4%
Sector Analysis % Total Assets^ Country Analysis % Total Assets^
Diversified 20.4 Global 53.2
Industrial Minerals 5.8 USA 17.9
Copper 3.4 Canada 12.3
Steel 2.9 Latin America 6.5
Gold 2.2 Australia 4.3
Nickel 1.0 Germany 2.5
Diamonds 0.9 Ireland 0.8
Aluminium 0.8 France 0.6
Iron 0.7 India 0.6
Platinum 0.5 South Africa 0.5
Subtotal Mining: 38.6 Spain 0.4
Net Current Assets 0.4
Traditional Energy: -----
E&P 16.5 100.00
Integrated 13.3 =====
Oil Services 3.5
Refining & Marketing 2.8
Distribution 2.1
Subtotal Traditional Energy: 38.2

Energy Transition:
Energy Efficiency 8.3
Electrification 7.3
Renewables 3.9
Transport 3.3
Subtotal Energy Transition: 22.8
Net Current Assets 0.4
^ Total Assets for the purposes of these calculations exclude bank overdrafts, and the net current assets figure shown in the tables above therefore exclude bank overdrafts equivalent to 9.6% of the Company’s net asset value.
Ten Largest Investments
Company Region of Risk
% Total Assets
Glencore Global 6.7
Vale Latin America
  Equity 4.0
  Bond 1.6
Shell Global 3.1
Samsung Global 2.8
First Quantum Minerals Global
  Equity 1.9
  Bond 0.8
BHP Global 2.6
Suncor Energy Canada 2.6
RWE Germany 2.5
ConocoPhillips  Global 2.5
TotalEnergies Global 2.3
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:

The Company’s Net Asset Value (NAV) per share decreased by -1.6% during the month of April (in Sterling terms with dividends reinvested).

Global equity markets experienced a challenging month with concerns around economic growth, given the war in Ukraine, ongoing Covid-19 related lockdowns in China and the US Federal Reserve raising interest rates driving stock markets lower. The yield on US 10-year Treasuries increased from 2.35% to 2.94% as US consumer price growth hit 8.5%.

The mining sector pulled back in April on weakness across mined commodity prices. Ongoing Covid-19 lockdowns in China have led to a deterioration in demand conditions in the country. The mining sector also reported on Q1 production and cost results during the month. Overall, production numbers were disappointing, whilst cost inflation was also a key theme. Whilst weaker production was a negative for performance in April, it does indicate an even tighter supply and demand picture for the rest of the year. For reference, production of copper in Chile (which typically accounts for over 30% of global supply) was down by 7.2% year-on-year in March 2022, whilst the country’s full year 2022 production is expected to be lower than it was in 2004.

Traditional Energy equities were largely resilient with energy prices remaining elevated. The war in Ukraine continues to impact the energy sector as Europe seeks to reduce its consumption of Russian oil and gas. It is also causing a shift in energy supply chains and the replumbing of the world’s energy systems is leading to higher energy prices and in particular, higher prices in crude product markets, with diesel margins at all time high levels. Russia is a major exporter of diesel to European markets. The European Commission announced further sanctions on Russia, whilst the US Administration’s release of 180 million barrels of oil from the Strategic Petroleum Reserve (SPR), at a rate of approximately 1 million barrels per day over a six-month period, began in April. Natural gas prices in the US rose sharply higher during the month with the US Henry Hub price rising by 29% from $5.64/mmbtu to $7.48/mmbtu. For reference the price was $3.82/mmbtu at the start of the year. In Europe natural gas prices remain well above $30/mmbtu. The Brent and WTI (West Texas Intermediate) oil prices rose by 1.0% and 4.4%, ending the month at $108/bbl and $105/bbl respectively.

Within the energy transition theme, in a follow up to the REPowerEU proposals to improve energy independence, Portugal announced plans to tackle renewable energy planning bottlenecks. In the US, potential new anti-circumvention rules, which may come into force following a Department of Commerce investigation around solar panel imports and significantly reduced solar panel availability in 2022, led US solar companies to downgrade expected installations for 2022. California’s regulators proposed raising the level of zero emission new car sales from 24% to 35% for 2026 and to 68% of new car sales by 2030. Elsewhere in a sign of how quickly EV sales are increasing, InsideEVs reported Chinese EV sales reached 20% in March selling 118% more EVs than just 12 months ago.

17 May 2022
Latest information is available by typing on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

a d v e r t i s e m e n t