Foresight closed out an impressive year as NAV per share rose 16.9%. The shares also returned almost 17% and while the company doesn’t reference a benchmark, returns are well in excess of global market indices. While the headline numbers are strong, the company did benefit to a certain extent from timing as the calendar year coincided roughly with the peak-to-trough move for the company. The last close was still comfortably above its year-ago price, however, some of the gloss has been taken off the performance as the renewable sector has turned down over the past six or so weeks. Still, fundamentals remain strong and consolidated revenues and EBITDA were 26% and 37% ahead of budget for the reported period thanks to better-than-expected generation and prices during the year.
Commenting on the company’s results, Alex Ohlsson, Chairman of Foresight Solar Fund Limited, said:
“Foresight Solar has enjoyed another strong year, benefiting not only from elevated power prices and higher than anticipated inflation, but also from its favourable power price hedges, good operational performance, and construction completion of the Spanish portfolio. This resulted in impressive total shareholder return of 24.8% for the calendar year and NAV total return for 2022 of 24%.
“Looking into 2023, the Company is pleased to declare a target dividend of 7.55 pence per share, a 6.0% increase year-on-year. Based on a strong contracted revenue position, and even after accounting for the effects of the EGL and the windfall tax in Spain, this year’s target dividend is expected to be at least 1.50x covered from cash generated in the period alone. A similar level of cover is expected for 2024 and 2025, assuming current revenue forecasts.
“Operationally, the portfolio continued to perform well, generating above budget electricity levels. The Company’s Spanish portfolio is now fully operational and, at 11% of total capacity, is expected to make a significant contribution to 2023 revenues. Foresight Solar has a strong focus on the Spanish market, and I am pleased to announce that the Company is in advanced negotiations to acquire the full project rights to a development-stage portfolio in the country with a potential capacity of more than 400MW. The transaction is well progressed and is expected to close in the first half of 2023.
“After the year end, Foresight Solar also entered exclusive negotiations for the rights to a further 50MW ready-to-build battery project. Discussions have progressed well and completion is expected in the second quarter of 2023. Given the positive market dynamics, the Investment Manager is actively considering building this asset as a longer duration project, as well assessing the potential for extending the duration of its other BSS sites.
“The Investment Manager believes there are several attractive opportunities in UK battery storage and in development-stage portfolios in the UK and Europe. As governments continue to support the transition to a net zero economy and prioritise domestic energy security, there is significant upside for the Company’s core solar and battery storage markets. These industry fundamentals, combined with Foresight Solar’s exciting pipeline of opportunities and attractive yield, position us strongly for 2023 and the following years.”
FSFL : Impressive year for Foresight Solar Fund