Greencoat UK Wind has published results for the first half of 2015. Over the period the NAV rose by 0.2%. Dividends totalling 3.13p per share were declared for the period. High winds meant that electricity generation was 10% ahead of expectations at 408GWh. This helped them generate cash of £29.2m and pushed the dividend cover to 2.0x.
They say the most significant event affecting the portfolio in the period was a grid transformer failure, which resulted in Earl’s Hall Farm being offline from 18 April to 6 June, while the Distribution Network Operator (UKPN) resolved the issue. The insurer has been notified in relation to lost revenue. Other major unscheduled outages resulted from the blade failure at Little Cheyne Court (as a result of a lightning strike, as highlighted in the 2014 Annual Report), with the turbine brought back into operation on 21 March; the replacement of two gearboxes at Little Cheyne Court, following end of warranty inspections; and various yaw gear failures at Maerdy, which are being investigated by Siemens. Lower than forecast power prices were seen throughout the period but revenue remained above budget owing to above budget generation. Operating expenditure was below budget.
Power prices now and forecast are below those forecast on listing and the changes to the Climate Change Levy have also reduced future earnings. These factors have been included in the NAV calculation.
No new farms were added to the portfolio – they said “During the period, a number of potential wind farm acquisitions were carefully evaluated, but none were completed, reflecting the Board’s support for the prudent approach by the Investment Manager only to acquire assets when we are confident that they bring value to shareholders.” When they do want to make acquisitions, there is room in their borrowing facilities to accommodate this as debt was 18% of gross assets at the end of June vs. the 20%-30% range they expect it to be normally.
UKW : Greencoat UK Wind generates 10% more power than forecast in H1