The Renewables Infrastructure Group Limited has published its interim report for the six months to 30 June 2016. Total annualised shareholder return for the six months to 30 June 2016 was -0.3% (with the FTSE-250 total return being -5.2% over the same period). The Board reaffirms its intention to pay a dividend of, in aggregate, 6.25p for the year ending 31 December 2016, in four quarterly amounts of 1.5625p.
The Company’s profit before tax increased by 27% to GBP19.2 million for the six month period ending 30 June 2016 (six months to 30 June 2015: GBP15.1 million) and earnings per share for the period was 2.6p (six months to 30 June 2015: 3.2p).
They say the results reflect a period of lower power prices affecting earnings, portfolio value and net asset value. The power price impact was partially offset by foreign exchange gains, reduced corporation tax rate assumptions and reductions in valuation discount rates as strong demand for renewables infrastructure continues. The Directors have approved the valuation of the portfolio of 51 project investments as GBP759.5 million as at 30 June 2016 (31 December 2015: GBP712.3 million across 36 projects).
While electricity production was up 29% on the comparable period in 2015 at 738GWh as a result of the increase in the scale of the portfolio, production has been lower than the Company’s long-term production projections (as set upon acquisition of each project) by 9% in aggregate across the portfolio. The shortfall is predominantly due to adverse weather conditions (in particular, low wind speeds in the British Isles and low solar irradiation in England during the second quarter), although operational factors on some projects also contributed, including a high incidence of grid outages and equipment maintenance and repairs.
The net asset value per share was 97.0 pence at 30 June 2016 (99.0 pence at 31 December 2015) after payment of dividends in the first half relating to nine months of performance. This was a one-off event as the movement to quarterly dividend payments (from semiannual) resulted in the first quarterly 1.5625p per share dividend being paid for the first quarter of 2016 as well as the 3.11p per share dividend for the second half of 2015.
Cash received from the portfolio by way of distributions was GBP30.8 million. After operating and finance costs, net cash flow of GBP26.0 million covered the cash dividend paid in March in respect of the six months to 31 December 2015 by 1.3 times, (or 1.6 times, factoring in amounts invested in the repayment of project-level debt – with the amount repaid, net of cash deposits, at the project level amounting to an additional GBP7 million, as set out more fully in the Interim Management Report).
Total management fees accruing to InfraRed and RES amounted to GBP3.7 million in the period, comprising management and advisory fees based on 1.0% per annum in aggregate of the applicable Adjusted Portfolio Value, with 20% of the fees to be paid through the issue to the Managers of 781,125 Ordinary Shares in aggregate. For the period, the Company’s Ongoing Charges Percentage, using the AIC methodology, was 1.15% on an annualised basis.
At the Company’s AGM in May, investors endorsed an increase in the allocation limit to technologies other than onshore wind and solar PV to 20% of the portfolio by value. TRIG is now considering potential investment in a broader array of projects including offshore wind, which now represents a significant portion of renewables generation in the UK and Northern Europe, as well as energy-supporting infrastructure.
TRIG : Renewables Infrastructure reports low sunshine, wind speeds and power prices