Greencoat UK Wind has announced results for the year to 31 December 2022. Despite lower than budgeted wind speeds, which alongside the project-specific issues highlighted below, meant that the portfolio generated 5% less power than forecast, it did produce 4,362GWh of sustainable electricity and generated £560.1m of cash.
Notable issues affecting portfolio availability were:
- a blade failure at Windy Rig;
- long duration outages at Corriegarth due to generator issues and a shortage of skilled technicians;
- various stops due to major component replacements and delays in spares procurement at Burbo Bank Extension;
- various pitch motor exchanges and generator issues at Dunmaglass; and
- work scheduling issues affecting availability of parts and technicians at Cotton Farm, Earl’s Hall Farm and Yelvertoft.
The company declared total dividends of 7.72p and is targeting a dividend of 8.76p for 2023 (increased in line with December 2022 RPI). In addition, the NAV increased by 25.4% to 165.2p. However, a sharp fall in the premium left shareholders with a return of 13.5% for the year.
Within the various elements that make up the NAV calculation, the weighted average discount rate used to value the company’s future cash flows was increased to 8.0%.
Over the course of 2022, Greencoat UK Wind bought Twentyshilling and a net 12.5% stake in Hornsea 1. This increased the portfolio to 45 operating wind farm investments with a net generating capacity of 1,610MW as at 31 December 2022. 34 additional projects are being evaluated by the manager.
At the year end, aggregate group debt was £1,780m, equivalent to 31 per cent of GAV. [The limit is 40% of GAV so the trust could make additional investments from debt, but we would not be surprised to see another equity issue if the shares can return to trading at a premium (currently a 4.5% discount).]
UKW : Greencoat UK Wind targets inflation-matching dividend hike