VH Global Energy Infrastructure (ENRG), the £300m international renewables fund, increased net asset value (NAV) by 5.8% in the third quarter in an encouraging start to the three-year wind-down approved by shareholders in August.
NAV per share rose 5.8p from 100.9p at 30 June to 106.7p on 30 September as a result of market feedback to the value of projects being prepared for sale, which impressed analysts as these outweighed the negative impact of a 28 basis points (0.28%) rise in discount valuation rates to 8.48%.
Distributions from investments and valuation rises added 4.1p and positive currency movements a further 3.7p per share before 2.01p was deducted for expenses and the 1.45p quarterly dividend, which is only 0.86 times covered by earnings and puts the company on a 8.4% yield.
Stifel analyst Will Crighton said: “This suggests the value of realisations could be strong, especially compared to the share price of 58p.”
The shares jumped 3.2p, or 5.5%, to 61.2p, leaving them on a 43% discount. They have recovered from an all-time low of 54p in May after they slid from a peak of 117p in August 2022. The company launched at 101p in 2021.
Fund manager Victory Hill Capital Partner has until August next year to agree asset sales, giving “time for investors to wait for further tangible evidence of good sales on the way,” said Crighton.
Assets in the portfolio comprise of a carbon capture and release project in the UK, a portfolio of seven solar power sites in Australia, a further 13 solar parks in Brazil, and two more in Spain and Portugal expected to be energised this year, plus a US terminal storage facility in the Gulf of Mexico and a hydroelectric facility in Brazil.
