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Octopus Renewables Infrastructure chair warns ‘new renewable generation is urgent as ever’

Octopus Renewables Infrastructure chair warns ‘new renewable generation is urgent as ever’ – Octopus Renewables Infrastructure (ORIT) has published its final results for the year to 31 December 2021. During the period, its NAV per share increased from 98.3p to 102.3p. In combination with the dividends paid during the year this gave rise to a NAV total return of 9.3%. Total shareholder return for the year was 1.6%.

ORIT’s operating income for the year was £40.4m, giving rise to a profit for the period of £34.8m. This was underpinned by EBITDA from the portfolio of operational assets totalling £29.9m, arising from gross revenues of £38.5m.

Total dividends of 5p per ordinary share were declared in respect of the year, with the fourth and final interim dividend paid in March 2022. This was in line with the target set at IPO, and the total dividends paid in respect of the year of £23.8m were fully covered by cash generated in the portfolio of assets, after deducting holding company costs and debt service.

The board has announced an increase in the target dividend to 5.24p for 2022, an increase of 4.8%, in line with the increase to the Consumer Price Index inflation for the 12 months to 31 December 2021.

Portfolio performance

During the period ORIT’s assets generated 348GWh of electricity, an increase of over 23% compared with the prior year. This reflects the growth of its operational portfolio following the construction of the Ljungbyholm wind farm, which was completed on time and on budget in June delivering construction gains of £2m.

The Cerisou, Cumberhead and Kuslin wind farms are all expected to complete construction during 2022, as well as the Saunamaa and Suolakangas wind farms which were in the final stages of commissioning at the year end. ORIT finalised the commissioning for the Krezcin wind farm which became operational during February 2022.

Chairman’s outlook:

Looking to 2022, there are fresh challenges for investors, with inflation rising and interest rates being increased in response. Whilst the portfolio benefits from significant inflation protection via index-linked revenues, the Board is mindful of the need to monitor discount rates to ensure risk premia remain appropriate.

The deplorable invasion of Ukraine by Russia also brings a great deal of uncertainty. Whilst the Company’s projects have not been directly affected, at this time it is unclear how the conflict could spread. What is clear is that the desire to avoid purchases of Russian oil and gas has led governments across Europe and beyond to seek ways to accelerate the deployment of new renewable capacity.

With the need for new renewable generation therefore as urgent as ever, and the strong pipeline of investment opportunities identified by the Investment Manager, the Company is very well positioned to continue growing, providing genuine positive impact by bringing additional generation capacity into operation, whilst delivering attractive returns to investors.

ORIT : Octopus Renewables Infrastructure chair warns ‘new renewable generation is urgent as ever’

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