Octopus Renewables Infrastructure Trust ups divi despite drop in NAV
By Benjamin Chiou
Date: Monday 25 Mar 2024
(Sharecast News) - Octopus Renewables Infrastructure Trust (ORIT), the clean energy investment fund of Octopus Energy Group, reported a small drop in net asset value in 2023, but still upped its payouts to shareholders after what it deemed a "resilient" performance.
The company, which holds renewable energy assets in Europe and Australia, said NAV fell to £599m by the end of last year, down from £618m in 2022, driven primarily by falling power price and inflation forecasts, along with increases applied to discount rates. NAV per share slipped to 106.04p from 109.44p.
Total shareholder returns for the year were -4.4%, as share prices across the renewable infrastructure sector continued to fall.
The company's operational portfolio produced 1,110 GWh, 14% below the target of 1,291 GWh, but above the 1,005 GWh generated in 2022. It assets across UK, France, Ireland, Finland, Sweden and Germany generated revenues of £117.4m, up from £112m but 16% below the £139.8m target.
ORIT said this was a result of onshore wind production being 20% below target, mainly due to low wind speeds, combined with a hit from lower-than-expected power prices.
"ORIT has demonstrated resilience in its FY 2023 performance despite a challenging backdrop both for the asset class and the investment trust sector as a whole," said chair Phil Austin.
"The company generated a positive NAV total return and delivered a dividend fully covered by operational cashflows, thanks in the main to the high proportion of fixed revenues which bodes well for future payments."
Total dividends for the year were 10.5% higher than 2022 at 5.79p per share, in line with the company's target.
"Despite the market challenges experienced in the investment trust sector in recent months, the fundamental driving forces behind clean energy investment are stronger than ever, and we believe that ORIT is very well placed to continue its contribution to the transition to net zero whilst ensuring an attractive level of returns for our shareholders," Austin said.
The stock was down 0.6% at 72p by 0854 GMT.
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