Octopus Renewables Infrastructure Trust plc ("ORIT" or the "Company") is pleased to announce its unaudited interim results for the period from 1 January 2023 to 30 June 2023.
Key Points
· Total shareholder return and NAV total return in the period from IPO in December 2019 of 6.1% (December 2022: 11.6%) and 27.0% (December 2022: 25.9%) respectively¹ 4
· Total shareholder return and NAV total return in the six months ended 30 June 2023 of -4.9% (6 months to June 2022: -0.2%) and 0.9% (6 months to June 2022: +11.3%), respectively¹ 4
· Increased target dividend to 5.79p for FY 2023, representing an increase of 10.5% over FY 2022 in line with inflation (CPI)². Targeted dividends are expected to be fully covered by the operating portfolio's cashflows5.
· In February 2023, the Company successfully refinanced and increased its multi-currency RCF to £270.8m (which was previously £150.0m committed, pre-accordion) at an improved margin of 2.0%.
· Sarim Sheikh was appointed as an Independent Non-Executive Director of the Company with effect from 1 June 2023. Mr. Sheikh has more than 25 years of working in the energy sector across Europe, Latin America, Africa and Asia.
Operational Highlights
· The Company continued to diversify its sources of revenue and added further long-term growth opportunities through the completion of two transactions during the period.
· In January 2023 ORIT entered the battery storage market with the acquisition of a 50% stake in the Woburn Road, a 12MW/24MWh ready-to-build battery storage project in Bedfordshire, UK.
· In April 2023 ORIT agreed to invest up to £5m into HYRO Energy Limited (HYRO), a new joint venture between ORIT, Sky (a fund managed by Octopus Energy Generation) and renewable energy company, RES. HYRO has been established to develop green hydrogen electrolysis projects and intends to develop c.700MW of green hydrogen electrolyser capacity by 2030.
· During the period the Company completed construction works at the Cumberhead Onshore Wind Farm in Scotland, with the site fully operational from 31 March 2023. Significant progress has been made on the construction of the Breach Solar Farm, which is expected to complete by the end of September, with energisation expected in Q4 2023.
· The Company entered into an inflation-linked Power Purchase Agreement (PPA) with Iceland Foods over the electricity generated at the Breach Solar Farm. The PPA will cover 14% of Iceland Foods' electricity needs for its UK stores and will reduce Iceland's emissions by nearly 22,955 tonnes of CO2 a year, equivalent to removing 12,590 petrol cars and planting 112,592 trees every year.
· At the SPV level, the Company's operational portfolio generated 578GWh (6 months to June 2022: 403GWh) of electricity, generating revenue of?£61.7 million?(6 months to June 2022: £38.4 million) in 6 months to June 2023.
· 76% of forecast operational revenue is fixed (30 June 2022: 58%) for the next two years (up to June 2025).
· Approximately 55% of the revenues forecast in the period to 30 June 2033 are now explicitly inflation linked (with reference to UK RPI, French inflation and Polish CPI) (30 June 2022: 51%).
· As at 30 June 2023, the portfolio comprised 386 assets across seven countries (UK, France, Ireland, Finland, Poland, Sweden and Germany) and three technologies, as well as developer investments. Total capacity, excluding conditional acquisitions, of 668 MW6 (30 June 2022: 583 MW).
· Once fully invested, the portfolio has the potential to power the equivalent of 536,000 homes with clean energy, an estimated 598,000 tonnes of carbon emissions avoided, up from 521,000 homes and 482,000 tonnes of carbon in 2022, respectively.
Post Period End
· ORIT has agreed to invest up to £2m to set up and fund a new development business, focused on creating new ground-mounted solar PV and co-located battery storage assets in the UK. ORIT will own 100% of the new company, which will benefit from exclusive development services from BLC Energy Limited ("BLCe").
Phil Austin, Chairman of Octopus Renewables Infrastructure Trust plc, commented:
"The period under review was a successful half year for ORIT, considering the volatile market conditions that have affected the whole subsector. The Company brought another large project through construction, adding a significant amount of much needed renewable energy to the Grid. Additionally, ORIT secured a new corporate PPA with Iceland in 2023, continuing its track record of helping major corporations transition to net zero, whilst assisting the decarbonisation ambitions of the UK and Europe.
ORIT has continued to make selected strategic investments from its pipeline, which have required limited capital commitment whilst diversifying its portfolio and revenue streams into new areas such as green hydrogen. The Company's exposure to developers offers both proprietary pipeline and potential for NAV accretion through entering into projects at an earlier stage. ORIT's clean energy portfolio has ensured the avoidance of c.598,000 tonnes of carbon emissions; a further 16,000 tonnes from last year, through its energisation of key projects in the portfolio."
Results presentation today
There will be a presentation for sell side analysts at 9.00 a.m. today. Please contact Buchanan for details on octopus@buchanan.uk.com
