Net Asset Value as at 31 December 2022

RNS Number : 6278Q

VH Global Sustainable Energy Oppt.

22 February 2023

 

VH Global Sustainable Energy Opportunities plc

22 February 2023

Net Asset Value as at 31 December 2022

The Board of directors of the Company announced an interim dividend of 1.38p per share with respect to the period from 1 October 2022 to 31 December 2022, an increase of over 10% vs. the prior quarter. Of this amount, 0.24p per Ordinary Share will be designated as an interest distribution.

With the declaration of the interim dividend, the total dividend for the 2022 financial year is 5.13p per share, exceeding the dividend target of 5p. The Company has committed to quarterly dividends of at least 1.38p or 5.52p in total for the 2023 financial year, in line with its progressive dividend policy. Based on the shares outstanding as at 31 December 2022, the dividend coverage was 1.4x for 2022. As further projects achieve operational status, the dividend coverage is expected to strengthen.

31 December 2022 Net Asset Value (NAV)

Net Asset Value ("NAV") decreased from 112.5p per share as at 30 September 2022 to 108.2p per share as at 31 December 2022, a 3.8% reduction.

The movements in the NAV during the quarter include:

	Pence per share
Net Asset Value per share as at 30 September 2022	112.5
Dividend paid	(1.25)
Fund expenses	(0.4)
Movement in fair value of assets	0.5
Foreign Exchange	(3.2)
Net Asset Value per share as at 31 December 2022	108.2

Fund expenses

Fund expenses for the quarter tracked under budget resulting in an annual ongoing charge of 1.3%.

Discount rates

During the quarter, discount rates increased by 55bps on average across the portfolio which contributed to a downward movement in the fair value of assets. Average discount rates for operational assets at 31 December 2022 are 8.4% in the US, 8.6% in Australia, 10.5% for the Brazilian Hydro Facility and 13.1% for the Brazilian solar assets. The UK assets are in construction and therefore currently held at cost.

Movement in fair value of assets

The net positive NAV movement of £2.3m, or 0.5p per share, is primarily driven by:

-  distributions from underlying investments of £13.5m in the quarter;

-  the completion of the expansion of the US terminal storage tanks that are fully contracted resulting in an upward revaluation;

-  nine of the 18 Brazil solar sites are operational. However, supply chain disruption has resulted in delays to the construction of the remaining nine sites. The completion of these sites is now expected in Q3 2023;

-  the acquisition of the Brazilian Hydro Facility during the quarter which has generated cash flows in excess of expectations;

-  updates to merchant forward power curves regarding the operational Australian solar PV asset, resulting in a downward movement in valuation.

Foreign Exchange

During the quarter, GBP strengthened against the basket of currencies within the Company's portfolio, including USD, AUD, and BRL. This resulted in a downward foreign exchange movement over the quarter due to the marking of the principal value of investments in foreign currencies into GBP. Despite the Q4 2022 downward movement, the Company had a foreign exchange gain for the financial year ending 31 December 2022 of 5.2%. The Company does not hedge the principal value of investments, but does hedge the short term distributions from investments from local currency to GBP and income from operational investments remains robust.

During the quarter, the Company made the following acquisitions:

· the acquisition on 7 December 2022 of the Brazilian Hydro Facility in the state of Espírito Santo, Brazil for a total consideration of BRL 708m (£110.8m), which is subject to post-closing adjustments in Q1 2023. In addition, BRL 425m (£67.4m) is payable subject to the conditions established under the process of renewal of the Hydro Facility concession in H1 2027. This run-of-river asset's nameplate capacity is 198MW and it has been operational since 1974.

· the acquisition of three fully permitted solar PV sites to be built out at a total cost of £21.2m as part of the existing £50m commitment to its Australian solar PV and storage investment programme (the "Programme"). The acquired sites represent Phase III of the Programme, which comprises 5MW of PV capacity per site, each situated in New South Wales.

The factsheet will be available on the Company's website.

www.vh-gseo.com

The Company's LEI is 213800RFHAOF372UU580.

For further information, please contact:

Edelman Smithfield (PR Adviser)

Ged Brumby  + 44 (0)7540 412 301

Kanayo Agwunobi  [phone]

Victory Hill Capital Partners LLP (Investment Adviser)

Navin Chauhan  [e-mail]

Numis (Corporate Broker)

David Benda  [phone]

Matt Goss

G10 Capital Limited (AIFM)

Paul Cowland  [phone]

Apex Fund and Corporate Services (UK) Limited (Company Secretary)

Geetika Dayal  [e-mail]

About Victory Hill Capital Partners LLP

Victory Hill Capital Partners LLP ("Victory Hill") is authorised and regulated by the Financial Conduct authority (FRN 961570).

Victory Hill is based in London and was founded in May 2020 by an experienced team of energy financiers that have spun-out of a large established global project finance banking group. The team have an established track record built over six years while working together in their previous roles and participating in over $37.1bn in sustainable energy project transaction values, generating over 24.2 per cent. equity returns. In addition, the team has also participated in more than $200bn in transaction values across 91 conventional and renewable energy-related transactions in over 30 jurisdictions worldwide, throughout their individual careers. The average experience per individual is 22 years of relevant energy finance experience.

The Victory Hill team deploys its experience across different financial disciplines in order to assess investments holistically from multiple points of view. The firm pursues operational stability and well-designed corporate governance to generate sustainable positive returns for investors. It focuses on supporting and accelerating the Energy Transition and the attainment of the UN Sustainable Development Goals.

Victory Hill is a signatory of the United Nations Principles for Responsible Investing (UN PRI), the United Nations Global Compact (UN GC) and is a formal supporter of the Financial Stability Board's Task-Force on Climate-related Disclosures (TCFD).

 

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