Greencoat Renewables says that for the year ended 31 December 2022:
- NAV per share increased by 7.3 cents to 112.4 cents per share
- Declared dividends totalling 6.18 cents per share, with a target of 6.42 cents for 2023 (+3.9%)
- The portfolio generated 2,487GWh of electricity in the period (2021: 1,522GWh) that’s enough to power 538,958 homes, saving 685,997 tonnes of CO2 emissions, the company also committed €1m to local communities across 202 community projects – its an Article 9 fund under EU SFDR
- Portfolio increased to 35 assets with the acquisition of 9 wind farms, including its first offshore wind farm and expansion into Germany, Finland and Spain, increasing net generating capacity to 1,164MW (2021: 800MW)
- Net cash generation was €215m and gross dividend cover was 3.2x (2021: 1.5x)
- €945m of group debt as at 31 December 2022 equivalent to 42% of GAV
- 59% of cash flows are inflation linked to 2032
Portfolio generation was 9% below budget. This was primarily a result of lower wind resource as well as the ongoing adverse impacts from higher dispatch down in the Irish portfolio.
On the impact of energy price caps, the chairman says: “Towards the end of the year, price caps were announced in various European jurisdictions, following a consistent policy framework and helping to remove short term regulatory uncertainty in energy markets. As of December 2022, these have been implemented in the markets that the group operates in, including Ireland, Germany, France and Spain. The introduction of a market price cap has not impacted the group’s portfolio valuation due to our conservative approach to valuations and power price curves and the fact that many of our assets are contracted under government support schemes.”
On discount rates: “Reflecting the fact that cost of financing across Europe has increased and a resetting of long term bond yields, in 2022, the investment manager took the decision to increase its contracted and merchant discount rates over the period by 0.5%, resulting in a 6.9% unlevered (post tax nominal) blended discount rate at the end of the period.”
On the pipeline: “the group entered into forward sale agreements to acquire Erstrask North, a 134.4MW onshore wind farm located in Sweden and a 50% stake in South Meath, an 80.5MW solar farm located in Ireland.
The expansion into the Nordics last year and into Spain and Germany this year is indicative of the group’s strategy, unlocking opportunities to aggregate significant investments in diversified geographies as we have demonstrated to be a successful business model in Ireland.
The company continues to explore new European markets where we can see low levelised cost of electricity opportunities in both wind and solar, with underlying Euro denominated cashflows. This includes opportunities in Portugal, the Baltics and Italy.”
GRP : Low wind resource holds back Greencoat Renewables