Ecofin U.S. Renewables Infrastructure Trust (RNEW) released its annual financial results for the 12 months ending 31 December 2023:
- RNEW reported a negative NAV total return of -5.5% and share price total return of -28.0%.
- NAV per share decreased from 94.3 cents per share to 85.2 cents. The company’s total NAV was $117.7m as of 31 December 2023.
- We remind readers that in September 2023, the board announced a strategic review focused on a potential sale of the trust’s assets to maximise value for shareholders, on the back of a widening discount which the board was actively trying to narrow. The review is ongoing with negotiations underway with potential buyers. RNEW traded on a 33.7% discount as of 31 December 2023.
- RNEW’s portfolio generated 248 GWh of clean energy during 2023, 36.2% below budget. This was due to a tornado in June 2023 damaging the transmission poles and substation through which the company’s Whirlwind wind asset transmits. Whirlwind re-gained interconnection during the fourth quarter of 2023 via an alternate route through a substation in Paducah, Texas. It expects 18 months to return to full capacity, and also expects its insurance policy to cover the damages to transmission poles.
- There were two other unforeseen issues impacting portfolio performance: damage to DC wiring at the Ellis Road solar project caused by a rodent infestation which forced 40% of the total system capacity to be de-energised; and voltage issues on the electricity network where the Skillman project is located causing the project to be automatically tripped offline, an issue which was rectified and power restored on 7 July.
- Other developments included the completion of several tax equity fundings across multiple projects. On 31 December 2023 the last three of the six Echo portfolio assets were granted conditional permission to operate and were placed in service, with commercial operation commencing in H1 2024.
- Four interim dividends totalling 3.5 cents per share were declared for 2023, reduced from the original target of 5.25-5.75 cents, reflecting lower cash flows from the portfolio operational issues.
- As of 31 Dec 2023, the portfolio consisted of 65 solar and wind assets with 177 MW capacity across 8 U.S. states. 93% of NAV was in operating assets. The weighted average remaining revenue contract term was 13.7 years.
- Total gearing was 38.6% of gross asset value at year-end 2023. RNEW has a $65m revolving credit facility of which $26.8m was drawn.