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Greencoat Renewables (GRP)

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Thursday 12 September, 2019

Greencoat Renewables

Interim Results to 30 June 2019

RNS Number : 0407M
Greencoat Renewables PLC
12 September 2019
 

Greencoat Renewables PLC

Interim Results to 30 June 2019

Dublin, London | 12 September 2019: Greencoat Renewables PLC ("Greencoat Renewables" or the "Company"), the renewable infrastructure company invested in euro-dominated assets, is pleased to announce its Interim Results for the six month period ended 30 June 2019.

              

Highlights

 

·     The Group's investments generated 555.9GWh of electricity, 5 per cent. below budget.

 

·  Net cash generation (Group and wind farm SPVs) was €27.1 million (gross of SPV level debt repayment).

 

·     In March 2019, the Group made a further investment in Cloosh Valley increasing GAV to €954.6 million as at 30 June 2019.  In September 2019, the Group agreed to acquire Gortahile wind farm increasing net generating capacity to 431MW.

 

·     Issuance of 140 million ordinary shares in an oversubscribed placing raising €147.7 million.

 

·     The Company declared total dividends of 3.015 cent per share with respect to the period.

 

·     €416.5 million of outstanding borrowings as at 30 June 2019, equivalent to 44 per cent. of GAV.

              

Commenting on today's results, Ronan Murphy, Non-Executive Chairman of Greencoat Renewables, said:

              

"I am pleased to announce strong 6 months results for Greencoat Renewables which also saw the generating portfolio grow and diversify, continued robust dividend cover, and another oversubscribed equity placing.

              

The outlook for the business remains positive, with an attractive pipeline of growth opportunities in Ireland, and the ability to make opportunistic acquisitions elsewhere in Europe. I would like to thank our new and existing shareholders for their strong support and the Board looks forward to the Company continuing to grow."

              

Key Metrics

 

As at 30 June 2019:

Market Capitalisation

€582.4 million

Share price

112.0 cent

Dividends with respect to the period

€15.7 million

Dividends with respect to the period per share

3.015 cent

GAV

€954.6 million

NAV

€538.2 million

NAV per share

103.5 cent

 

Details of the conference call for analysts and investors:

A conference call for analysts and investors will be held at 10.00 am BST today, 12 September 2019. To register for the call please contact FTI Consulting on +353 1 765 0800, or by email at [email protected].

Presentation materials will be posted on the Company's website, www.greencoat-renewables.com from 7.00 am.

              

For further details contact:

Greencoat Capital LLP (Investment Manager)

 

 

 

 

 

Bertrand Gautier

Paul O' Donnell

Tom Rayner

 

 

 

 

+44 20 7832 9400

FTI Consulting (Investor Relations & Media)

 

 

 

 

 

Jonathan Neilan

 

 

 

 

+353 1 765 0886

Melanie Farrell

 

 

 

 

[email protected]

Davy (Broker, NOMAD and Euronext Growth Adviser)

Fergal Meegan

Barry Murphy

Ronan Veale

 

 

 

 

 

+353 1 679 6363

 

 

RBC Capital Markets (Joint Broker)

Matthew Coakes

Jonathan Hardy

 

 

 

 

+44 20 7653 4000

 

About Greencoat Renewables PLC

Greencoat Renewables PLC is an investor in euro denominated renewable energy infrastructure assets. Governed by a strong and experienced independent board, it is focused on the acquisition and management of operating wind farms in Ireland. It is managed by an experienced team at Greencoat Capital LLP, a leading European renewable investment manager with over €4 billion of assets under management across a number of funds in wind and solar infrastructure.

 

 

 

At a Glance

 

Summary

 

Greencoat Renewables PLC is a sector-focused listed renewable infrastructure company, investing in renewable electricity generation assets, with an initial focus on wind assets in Ireland. The Company's aim is to provide investors with an annual dividend that increases progressively whilst growing the capital value of its investment portfolio in the long term through reinvestment of excess cash flow and the prudent use of portfolio leverage.

 

Highlights

 

·     The Group's investments generated 555.9GWh of electricity, 5 per cent. below budget.

 

·    Net cash generation (Group and wind farm SPVs) was €27.1 million(1) (gross of SPV level debt repayment).

 

·    In March 2019, the Group made a further investment in Cloosh Valley increasing GAV to €954.6 million as at 30 June 2019.  In September 2019, the Group agreed to acquire Gortahile wind farm increasing net generating capacity to 431MW.

 

·     Issuance of 140 million ordinary shares in an oversubscribed placing raising €147.7 million.

 

·     The Company declared total dividends of 3.015 cent per share with respect to the period.

 

·     €416.5 million of outstanding borrowings as at 30 June 2019, equivalent to 44 per cent. of GAV.

 

(1) Net cash generation was €23.4 million net of SPV level debt repayment

 

Key Metrics

 

As at
30 June 2019

 
 

Market capitalisation

€582.4 million

 

Share price

112.0 cent

 

Dividends with respect to the period

€15.7 million

 

Dividends with respect to the period per share

3.015 cent

 

GAV

€954.6 million

 

NAV

€538.2 million

 

NAV per share

103.5 cent

 

 

Chairman's Statement

 

I am pleased to present the Interim Report of Greencoat Renewables PLC for the six months ended 30 June 2019. The period saw the Company continue to execute on its growth strategy, evidenced by the successful placing of 140 million new shares, raising €148 million of equity in an oversubscribed issuance. I would like to thank our new and existing shareholders for their continued support.

 

Over the past 2 years since listing, the Company has become one of the largest owners of onshore wind assets in Ireland and has successfully positioned itself to take advantage of the increasing Irish and European secondary market opportunities, whilst continuing to deliver target returns to investors.

 

Performance

The portfolio generated 555.9GWh in the first half of the year, 5 per cent below budget. Both asset availability and wind resource were broadly on budget for the period, with higher than expected grid curtailment, specifically in the south west region, responsible for lower performance.

Due to the contracted payments under the REFIT regime, there is no exposure to wholesale power price fluctuations and, accordingly net cash generated by the Group and wind farm SPVs was €27.1 million(1), providing strong dividend cover of 2.0x(1) during the period. 

The past 6 months have also seen significant consolidation of the portfolio following a period of significant growth last year and a primary focus on integrating new outsourced asset managers for investments made in 2018.

(1) Net cash generation and dividend cover are gross of SPV level debt repayment were €23.4 million and 1.7x net of SPV level debt repayment

 

Dividend

The target dividend for 2019 was set at 6.03c per share with declared dividends for the period totalling 3.015 cent per share.

 

NAV per share increased slightly in the period from 103.4 cent per share at 31 December 2018 to 103.5 cent per share at 30 June 2019.

 

Acquisitions and Equity Raising

The past 2 years has been a period of sustained growth and the net generating capacity stood at 411MW at 30 June 2019, effectively triple the size of the initial seed portfolio at IPO and has resulted in diversification in Ireland.

During the period, the Group invested €72 million (excluding acquired cash, including acquisition costs and including the Group's proportionate increase in SPV level debt), to increase its share of Cloosh Valley by 25% to 75%.

On 11 September 2019, the Group announced its agreement to acquire the 20MW Gortahile wind farm from Glennmont Partners.  Gortahile, located in Co. Laois, consists of 8 Nordex N90 turbines and increases the portfolio's net generating capacity to 431MW.  

The portfolio now benefits from a weighted average 11 years of secured pricing with all of the wind farm SPVs contracted under the REFIT 1 and REFIT 2 schemes.

In order to support its continuing growth, the Company issued 140 million new shares, in March 2019, raising gross proceeds of €148 million in an oversubscribed and NAV-accretive share placing. The Board was pleased with the results of this placing, completing the 250 million share issuance programme that was launched in July 2018.

 

Gearing

At the start of the period, Group borrowings amounted to €490.7 million (56 per cent. of GAV). Following the further investment in Cloosh Valley and equity issuance in the period, as at 30 June 2019 Group borrowings amounted to €416.5 million equating to 44 per cent. of GAV.

The Group's policy is to keep overall Group level borrowings at a prudent level (limited to 60 per cent. of GAV) in order to reduce risk, while ensuring that the Group is always at least fully invested, thus using shareholders' capital efficiently.

Principal Risks and Uncertainties

As detailed in the Company's Annual Report for the year to 31 December 2018, the principal risks and uncertainties affecting the Group are unchanged:

·     dependence on the Investment Manager;

·     Brexit risk;

·     regulatory risk;

·     financing risk; and

·     risk of investment returns becoming unattractive.

 

Also, as detailed in the Company's Annual Report for the year to 31 December 2018, the principal risks and uncertainties affecting the investee companies are as follows:

·     changes in government policy on renewable energy;

·     a decline in the market price of electricity after the REFIT period;

·     risk of low wind resource;

·     lower than expected lifespan of the wind turbines;

·     risk of market structure change; and

·     health and safety and the environment.

 

Further information in relation to these principal risks and uncertainties, which are unchanged from 31 December 2018 and remain the most likely to affect the Group in the second half of the year, may be found on pages 20 - 22 of the Company's Annual Report for the year ended 31 December 2018. 

 

Outlook

The Irish wind market remains a very attractive jurisdiction for investment with both a stable and supportive regulatory regime and broad public support. In the first half of 2019, wind generation delivered approximately 32% of the country's electricity, and will remain the dominant renewable technology as Ireland continues towards achieving its target of 40% renewable electricity generation by 2020.   

 

Beyond 2020, The Irish Government's recently announced Climate Action Policy committed the country to generating 70% of electricity from renewables by 2030. This is expected to create more than €12 billion of further investment opportunities and it is expected that the majority of this new capacity will be delivered under the new RESS, a competitive auction structure for CFD support, with such auctions expected to commence in 2020 and run until 2026. The Board continue to view the Irish wind market as an attractive market for further investment.

From July 2019, the Group is able to consider investment opportunities in other EU jurisdictions in line with our investment policy. Investments outside of Ireland provide further diversification of generation resource from renewables, and give the Group access to a considerably larger pool of assets from which to seek best value. Many of these assets are owned by parties with whom the Investment Manager has strong existing relationships and provides the opportunity for bilateral transactions. The Group's position is further improved by the absence of currency risk when acquiring assets in Europe.

The Board is supportive of value-accretive growth through further wind farm investments, and such acquisitions will be in the shareholders' interest:

·     providing additional economies of scale at Group level;

·     supporting diversification of both geographic and technological exposure;

·     increasing market power with service providers and asset sellers; and

·     increasing liquidity in our shares.

 

The Board remains confident in the Company's outlook for the future, and in the disciplined approach of the Investment Manager to possible future acquisitions and the continued careful management of the existing portfolio.

Sustainability

Sustainability is central to all that the Group does and we recognise that investing responsibly is critical to our performance and growth over the longer term. Given the nature of our business, our most significant impact is the displacement of carbon generation and we are extremely proud to generate sufficient carbon-free electricity to power c.240,000 homes.

Our commitment to a sustainable future extends beyond our wind farms and the renewable energy they generate. We strive to operate in a responsible and sustainable manner for the benefit of all of our stakeholders, and aim to be a best-in-class partner for our investors, joint venture partners, neighbours, and customers.

Corporate Governance

The Board intends to appoint an additional non-executive Director to further enhance the skill and experience of the existing Board. I am pleased to report that the search is now well progressed, and we are hoping to announce the appointment of a new member in the foreseeable future.

Conclusion

In conclusion, the Board is very pleased with the significant progress that the Company has achieved in the first half of 2019. I would like to thank my fellow Directors, Emer Gilvarry and Kevin McNamara, for their continued support and advice during the year. Finally, I would like to acknowledge the substantial role of the Investment Manager, which contributed significantly to all of our successes in this period.

 

Rónán Murphy

Chairman

9 September 2019

 

Investment Manager's Report

Information about Investment Manager

The Investment Manager is responsible for the day-to-day management of the Company's investment portfolio in accordance with the Company's investment objective and policy, subject to the overall supervision of the Board.

The Investment Manager is an experienced manager of renewable infrastructure assets and is authorised and regulated by the Financial Conduct Authority.

Investment Portfolio

The Group's investment portfolio as at 30 June 2019 consisted of SPVs which hold the following underlying operating wind farms:

Wind Farms

Turbines

Operator

PPA

Total MW

Ownership Stake

Net MW

 
 

Ballybane

Enercon

MOS Group

Energia

48.3

100%

48.3

 

Cloosh Valley

Siemens

SSE

SSE

108.0

75%

81.0

 

Garranereagh

Enercon

Statkraft

Bord Gáis

9.2

100%

9.2

 

Glanaruddery

Vestas

EnergyPro

Supplier Lite

36.3

100%

36.3

 

Killhills

Enercon

SSE

Brookfield

36.8

100%

36.8

 

Knockacummer

Nordex

SSE

Brookfield

100.0

100%

100.0

 

Knocknalour

Enercon

Wind Prospect

Naturgy / Energia

9.2

100%

9.2

 

Lisdowney

Enercon

EnergyPro

Naturgy

9.2

100%

9.2

 

Monaincha

Nordex

Statkraft

Bord Gáis

36.0

100%

36.0

 

Raheenleagh

Siemens

ESB

ESB

35.2

50%

17.6

 

Sliabh Bawn

Siemens

Wind Prospect

Supplier Lite

64.0

25%

16.0

 

Tullynamoyle II

Enercon

Cabragh

Bord Gáis

11.5

100%

11.5

 

Total  

 

 

 

 

 

411.1

 

 

Portfolio Performance

Portfolio generation for the six months ended 30 June 2019 was 555.9GWh, 5 per cent. below budget, primarily due to higher than expected curtailment.

Our assessment, aligned with that of our independent consultants, is that the high curtailment and constraint in the period was an anomaly and was primarily due to a forced outage of a 220kV to 400kV grid transformer at Moneypoint impeding the electricity flows in periods of high wind in the south west of Ireland. It is expected that the transformer will be replaced later this year.

Health and safety

There were no major incidents in the period ended 30 June 2019. Health and safety audits  were conducted across 5 sites during the period by an independent consultant. No material areas of concern were identified.

 

Acquisitions

On 28 March 2019, the Group made a further investment in Cloosh Valley for €72 million (including acquisition costs, excluding acquired cash) to increase ownership to 75%. This also includes increasing the Group's share of SPV level debt by €40.8m.

On 10 September 2019, the Group announced its agreement to acquire the 20MW Gortahile wind farm from Glennmont Partners. Gortahile, located in Co. Laois, consists of 8 Nordex N90 turbines and increases the portfolio's net generating capacity to 431MW.

Financial Performance

Dividend cover for the six months ended 30 June 2019 was 1.7x net of SPV level debt repayment or 2.0x gross of SPV level debt repayment.

 

Cash balances (Group and wind farm SPVs) increased by €5.1m to €46.4m over the period.

 

Group and wind farm SPV cash flows

For the six months ended
30 June 2019

 

Net (1)

Gross (1)

 

€ 000

€ 000

 

 

 

Net cash generation (2)

23,417

27,134

Dividends paid

(13,539)

(13,539)

 

 

 

SPV Capex & PSO Cashflow (3)

(3,625)

(3,625)

SPV level debt repayment

-

(3,717)

 

 

 

Acquisitions (4)

(30,726)

(30,726)

Acquisition costs

(4,457)

(4,457)

 

 

 

Equity issuance

147,700

147,700

Equity issuance costs

(2,443)

(2,443)

 

 

 

Net repayment under debt facilities

(111,031)

(111,031)

Upfront finance costs

(196)

(196)

 

 

 

Movement in cash (Group and wind farm SPVs)

5,100

5,100

Opening cash balance (Group and wind farm SPVs)

41,275

41,275

Ending cash balance (Group and wind farm SPVs)

46,375

46,375

 

 

 

Net cash generation

23,417

27,134

Dividends

13,539

13,539

Dividend cover

1.7x

2.0x

 

 

 

(1)  The dividend cover tables above are shown as two scenarios: the first reflects cash generation net of the Group's share of SPV level debt repayment at Cloosh Valley, Raheenleagh and Sliabh Bawn, and the second shows the gross cash generation.

(2)  Net cash generation has been adjusted to remove €3.2m of REFIT revenue accrued in November 2018 that was received later than contracted in January 2019

(3)  Cashflows reflect residual capital expenditure from acquired SPVs (covered by the vendor of the SPVs) plus REFIT working capital movements with the PSO relating to wind farm SPVs.

(4)  Acquisition consideration is net of the acquired SPV cash.

 

Net Cash Generation - Breakdown 

For the six months ended
30 June 2019

 

Net

Gross

 

€'000

€'000

 

 

 

Revenue (1)

47,622

47,622

Operating expenses

(12,770)

(12,770)

Tax / VAT

168

168

Wind farm operating cashflow

35,020

35,020

SPV level debt interest

(2,015)

(2,015)

SPV level debt repayment

(3,717)

-

Wind farm cashflow

29,288

33,005

 

 

 

Management fee

(1,999)

(1,999)

Operating expenses

(929)

(929)

Ongoing finance costs

(2,751)

(2,751)

VAT

(265)

(265)

Other

73

73

Group cashflow

(5,871)

(5,871)

 

 

 

Net cash generation

23,417

27,134

 

(1) Cash revenue has been adjusted to exclude €3.2m of REFIT revenue that was received in January 2019 that related to November 2018.

 

Net Cash Generation - Reconciliation to Net Cash Flows from Operating Activities

For the six months ended
30 June 2019

 

Net

Gross

 

€'000

€'000

 

 

 

Net cash flows from operating activities (1)

4,459

4,459

Movement in cash balances of wind farm SPVs

6,977(2)

10,694(3)

Repayment of shareholder loan investment (1)

14,733

14,733

Finance costs (1)

(2,948)

(2,948)

Upfront finance costs (cash) (4)

196

196

Net cash generation

23,417

27,134

 

(1)  Condensed Consolidated Statement of Cash Flows

(2)  €7,077k movement in cash balances of SPVs (note 8 to the Financial Statements - excludes acquired cash) less €100k other working capital at wind farm SPV level

(3)  €7,077k movement in cash balances of SPVs (note 8 to the Financial Statements - excludes acquired cash) less €100k other working capital at wind farm SPV level plus €3,717k repayment of SPV level debt

(4)  €44k other facility fees (note 12 to the Financial Statements) plus the €152k decrease in other finance costs payable (note 11 to the Financial Statements).

 

A dividend of €5.7 million (1.5 cent per share) was paid on the 28 February 2019 with respect to the quarter ended 31 December 2018. Following the issuance of 140 million new shares in March 2019, a dividend of €7.8m (1.5075 cent per share) was paid on the 30 May 2019 with respect to the quarter ended 31 March 2019.

A further dividend of €7.8m (1.5075 cent per share) was paid on the 29 August 2019 with respect to the quarter ended 30 June 2019.

The share price at 30 June 2019 was 112.0 cent, representing an 8.2 per cent. premium to NAV.

 

cent per share

 

 

NAV at 31 December 2018

103.4

Less February 2019 dividend

(1.5)

NAV at 31 December 2018 (ex dividend)

101.9

 

 

NAV at 30 June 2019

103.5

Less August 2019 dividend

(1.5)

NAV at 30 June 2019 (ex dividend)

102.0

 

 

Movement in NAV (ex dividend)

0.1

 

Reconciliation of Statutory Net Assets to Reported NAV

 

 

As at
30 June 2019

 

As at
31 December 2018

 

€'000

€'000

 

 

 

DCF valuation

911,686

852,940

Shareholder loan interest receivable

4,371

3,993

Other relevant liabilities (wind farm SPVs)

(4,097)

(9,109)

Cash (wind farm SPVs)

45,317

38,239

Fair value of investments (1)

957,277

886,063

Cash (Group)

1,058

3,036

Other relevant liabilities

(3,700)

(5,621)

GAV

954,635

883,478

Aggregate Group Debt (2)

(416,478)

(490,695)

NAV

538,157

392,783

 

 

 

Reconciling items (3)

1,237

1,171

Statutory net assets

539,394

393,954

 

 

 

Shares in issue

520,000,000

380,000,000

NAV per share (cent)

103.5

103.4

 

(1)  The fair value of investments are shown gross of €165.5 million debt and swap fair values held at wind farm SPV level that are not included in the equivalent figure in the Consolidated Statement of Financial Position.

(2)  Aggregate Group Debt reflects €251.0 million relating to amounts drawn under the Group's revolving credit facility, consistent with the Consolidated Statement of Financial Position, and €165.5 million of debt and swap fair values held at wind farm SPV level.

(3)  The other reconciling item reflects a deferred tax asset in Holdco.

 

Gearing

As at 30 June 2019, the Group and wind farm SPVs had €416.5 million of debt outstanding, equating to 43.6 per cent. of GAV. This debt relates to the amounts drawn under the Group's revolving credit facility as well the Group's proportionate share of long-term project finance debt (including the fair value of associated interest rate swaps) within Cloosh Valley, Raheenleagh and Sliabh Bawn.

In March 2019, the Group made a €111.0m repayment of its revolving credit facility utilising net proceeds from its oversubscribed share placing leaving €251.0m drawn under the facility (26.3 per cent. of GAV).

Outlook

Irish Wind Market

The Irish wind market remains a very attractive jurisdiction with both a stable and supportive regulatory regime.

The build out of REFIT 2 has continued strongly, with the total market for operating wind farms in Ireland expected to reach €8 billion by 2020. Beyond this, there is expected to be more than €12 billion of further investment opportunities in Ireland due to the recent Government announcement on the Climate Action Policy and the commitment to generate 70 per cent. of electricity from renewables by 2030. These opportunities are expected to include an increase in the capacity of onshore wind to c. 8GW, as well as c. 3.5GW of offshore wind and 1.5GW of solar PV, which previously weren't eligible for government subsidies.

Ireland is experiencing fast growth in the demand for electricity, particularly from the development of a substantial number of datacentres, which are seeking to use solely renewable energy in their operation. The government expects to see a growing number of large corporate entities seeking to enter into long term Corporate PPA electricity contracts.

Potential Market Entry into Continental Europe

From July 2019, the Group is able to explore investment opportunities in Northern European countries such as Belgium, Finland, France, Germany and the Netherlands. We are currently reviewing a number of these opportunities and are looking to leverage off the strong relationships we have with advisors and asset owners on the continent.

The outlook for the Group continues to remain very positive, with robust operational and financial performance from the existing portfolio combined with a healthy pipeline of further attractive investment opportunities.

Condensed Consolidated Statement of Comprehensive Income (unaudited)

For the six months ended 30 June 2019

 

 

 

For the six months ended 30 June 2019

For the six months ended 30 June 2018

 

 

Notes

€'000

€'000

 

 

 

 

 

 

 

 

 

 

 

Return on investments

3

20,147

17,005

 

Other income

 

37

185

 

Total income and gains

 

20,184

17,190

 

 

 

 

 

 

Operating expenses

4

(3,188)

(1,827)

 

Investment acquisition costs

 

(234)

(1,553)

 

 

 

 

 

 

Operating profit

 

16,762

13,810

 

 

 

 

 

 

Finance expense

12

(3,052)

(2,112)

 

 

 

 

 

 

Profit for period before taxation

 

                13,710

11,698

 

 

 

 

 

 

Taxation

5

-

-

 

 

 

 

 

 

Profit for period after taxation

 

13,710

11,698

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

Basic and diluted earnings from continuing operations in the period (cent)

6

3.00

4.33

 

 

 

 

 

 

 

 

 

 

                     

 

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

 

Condensed Consolidated Statement of Financial Position (unaudited)

As at 30 June 2019

 

 

Notes

30 June

2019

31 December

2018

 

 

€'000

€'000

 

 

 

 

Non-current assets

 

 

 

Investments at fair value through profit or loss

8

791,798

757,399

 

 

791,798

757,399

 

 

 

 

Current assets

 

 

 

Receivables

10

1,834

3,486

Cash and cash equivalents

 

1,058

3,036

 

 

2,892

6,522

Current Liabilities

 

 

 

Payables

11

(4,296)

(7,936)

Net current liabilities

 

(1,404)

(1,414)

 

 

 

 

Non current liabilities

 

 

 

Loans and borrowings

12

(251,000)

(362,031)

 

 

 

 

Net assets

 

539,394

393,954

 

 

 

 

Capital and reserves

 

 

 

Called up share capital

14

5,200

3,800

Share premium account

14

263,878

120,009

Other distributable reserves

 

215,614

229,153

Retained earnings

 

54,702

40,992

Total shareholders' funds

 

539,394

393,954

 

 

 

 

Net asset per share (cent)

15

103.7

103.7

 

 

Authorised for issue by the Board on 11 September 2019 and signed on its behalf by:

 

 

Rónán Murphy                                     Kevin McNamara

Chairman                                                       Director

 

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

Condensed Consolidated Statement of Changes in Equity (unaudited)

For the six months ended 30 June 2019

 


For the six months

Note

Share capital

Share premium

Other

distributable

reserves

Retained earnings

Total

ended 30 June 2019

 

€'000

€'000

€'000

€'000

€'000

Opening net assets attributable to shareholders (1 January 2019)

 

3,800

120,009

229,153

40,992

393,954

Issue of share capital

14

1,400

146,300

-

-

147,700

Share issue costs

14

-

(2,431)

-

-

(2,431)

Profit and total comprehensive income for the period

 

-

-

-

13,710

13,710

Interim dividends paid in the period

7

-

-

(13,539)

-

(13,539)

Closing net assets attributable to shareholders

 

5,200

263,878

215,614

54,702

539,394

 

 

For the six months

Note

Share capital

Share premium

Other

distributable

reserves

Retained earnings

Total

ended 30 June 2018

 

€'000

€'000

€'000

€'000

€'000

Opening net assets attributable to shareholders (1 January 2018)

 

2,700

11,958

250,000

(2,572)

262,086

Share issue costs

 

-

(7)

-

-

(7)

Profit and total comprehensive income for the period

 

-

-

-

11,698

11,698

Interim dividends paid in the period

7

-

-

(11,097)

-

(11,097)

Closing net assets attributable to shareholders

 

2,700

11,951

238,903

9,126

262,680

 

 

After taking account of cumulative unrealised gains of €68,765,871 (30 June 2018: €21,254,560), the total reserves distributable by way of a dividend as at 30 June 2019 €201,550,071 (30 June 2018: €226,774,898).

 

The accompanying notes form an integral part of the condensed consolidated interim financial statements

 

Condensed Consolidated Statement of Cash Flows (unaudited)

For the six months ended 30 June 2019

 

Note

For the six months ended
30 June 2019

 

 

€'000

€'000

 

 

 

 

Net cash flows from operating activities

16

4,459

4,423

 

 

 

 

Cash flows from investing activities

 

 

 

Acquisition of investments

 

(34,452)

(131,486)

Investment acquisition costs

 

(4,457)

(982)

Repayment of shareholder loan investments

8

               14,733

4,120

Net cash flows from investing activities

 

(24,176)

(128,348)

 

 

 

 

Cash flows from financing activities

 

 

 

Issue of share capital

14

147,700

-

Amounts drawn down on loan instruments

 

-

127,061

Amounts repaid on loan instruments

12

(111,031)

-

Payment of share issue costs

 

(2,443)

(121)

Dividends paid

7

(13,539)

(11,097)

Finance costs

 

(2,948)

(1,494)

Net cash flows from financing activities

 

17,739

114,349

 

 

 

 

Net decrease in cash and cash equivalents during the period

 

(1,978)

(9,576)

 

 

 

 

Cash and cash equivalents at beginning of period

 

3,036

14,794

 

 

 

 

Cash and cash equivalents at the end of the period

 

1,058

5,218

 

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

 

Notes to the Unaudited Condensed Consolidated Financial Statements

1.    Significant accounting policies

 

Basis of accounting

The condensed consolidated financial statements included in this Interim Report have been prepared in accordance with IAS 34 "Interim Financial Reporting".

 

IFRS 16 'Leases' became effective for accounting periods beginning on or after 1 January 2019. As the Group's investments are held at fair value through profit or loss and leases are held at SPV level, the introduction of IFRS 16 has not had a material impact on the reported results and financial position of the Group.

 

The interim financial statements have been prepared in accordance with IFRS to the extent that they have been adopted by the EU and with those parts of the Companies Act 2014 (including amendments by the Companies (Accounting) Act 2017) applicable to companies under IFRS. The financial statements have been prepared on the historical cost basis, as modified for the measurement of certain financial instruments at fair value through profit or loss.

 

These financial statements are presented in Euro ("€") which is the currency of the primary economic environment in which the Group operates and are rounded to the nearest thousand, unless otherwise stated.

 

These condensed financial statements do not include all information and disclosures required in the annual financial statements and should be read in conjunction with the Group's consolidated annual financial statements as of 31 December 2018. The audited annual accounts for the year ended 31 December 2018 have been delivered to the Companies Registration Office. The audit report thereon was unmodified.

 

Review

The Interim Report has not been audited or formally reviewed by the Company's Auditor in accordance with the International Standards on Auditing (ISAs) (Ireland) or International Standards on Review Engagements (ISREs). However, it has been subject to a limited review of the Interim Financial Statements by the Company's Auditor.

 

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

 

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, as a whole.

 

The key measure of performance used by the Board to assess the Group's performance and to allocate resources is the total return on the Group's net assets, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the consolidated financial statements.

 

For management purposes, the Group is organised into one main operating segment, which invests in wind farm assets. All of the Group's income is generated within Ireland. All of the Group's non-current assets are located in Ireland.

 

Seasonal and cyclical variations

The Group's results do not vary significantly during reporting periods as a result of seasonal activity.

 

2.   Investment management fees

 

Under the terms of the Investment Management Agreement, the Investment Manager is entitled to a management fee from the Company, which is calculated quarterly in arrears and remains at 1 per cent. of NAV per annum on that part of NAV up to and including €1 billion, as disclosed on page 49 of the Company's Annual Report for the year ended 31 December 2018.

 

Investment management fees paid or accrued in the period were as follows:

 

For the six months ended 30 June 2019

For the six months ended 

30 June 2018

 

€'000

€'000

Investment management fee

2,415

1,296

Total

2,415

1,296

 

As at 30 June 2019, total amounts payable to the Investment Manager were €1,343,998 (31 December 2018: €928,073).

 

3.   Return on investments

 

For the six months ended

30 June 2019

For the six months ended

30 June 2018

 

€'000

€'000

Unrealised movement in fair value of investments (note 8)

14,301

13,553

Interest on shareholder loan investments received

5,846

3,452

 

20,147

17,005

 

4.   Operating expenses

 


For the six months ended

30 June 2019


For the six months ended

30 June 2018

 

€'000

€'000

Investment management fee (note 2)

2,415

1,296

Other expenses

476

318

Group administration fees

157

84

Non-executive Directors' fees

100

100

Fees to the Company's Auditor:

 

 

for audit of the statutory financial statements

37

25

for other audit related services

3

4

 

3,188

1,827

 

The fees to the Company's auditor includes €3,000 (2018: €4,000) payable in relation to a limited review of these interim financial statements, and estimated accruals apportioned across the year for the audit of the statutory financial statements.

 

5.    Taxation

 

Taxable income during the period was offset by management expenses and the tax charge for the period ended 30 June 2019 is €nil (30 June 2018: €nil). The Group has tax losses carried forward available to offset against current and future profits as at 30 June 2019 of €505,879 (30 June 2018: €108,219).

 

6.    Earnings per share

 

 

 

For the six months

ended

30 June 2019


For the six months ended

30 June 2018

Profit attributable to equity holders of the Company - €'000

13,710

11,698

Weighted average number of ordinary shares in issue

457,348,066

270,000,000

Basic and diluted earnings from continuing operations in the period (cent)

3.00

4.33

 

7.    Dividends declared with respect to the period

 

Interim dividends paid during the period

Dividend per share

Total dividend

ended 30 June 2019

cent

€'000

With respect to the quarter ended 31 December 2018

1.5000

5,700

With respect to the quarter ended 31 March 2019

1.5075

7,839

 

3.0075

13,539

 

 

 

Interim dividends declared after 30 June 2019 and

Dividend per share

Total dividend

not accrued in the period

cent

€'000

With respect to the quarter ended 30 June 2019

1.5075

7,839

 

1.5075

7,839

 

As disclosed in note 18, on 25 July 2019, the Board approved a dividend of 1.5075 cent per share in relation to the quarter ended 30 June 2019, bringing total dividends declared with respect to the period to 3.015 cent per share. The record date for the dividend was 2 August 2019 and the payment date was 29 August 2019.

8.    Investments at fair value through profit or loss

 

For the period ended 30 June 2019

Loans

Equity

interest

Total

 

€'000

€'000

€'000

Opening balance

419,016

338,383

757,399

Additions

2,895

31,557

34,452

Repayment of shareholder loan investments (note 17)

(14,733)

-

(14,733)

Unrealised movement in fair value of investments

(note 3)

379

14,301

14,680

 

407,557

384,241

791,798

 

For the period ended 30 June 2018

Loans

Equity interest

Total

 

€'000

€'000

€'000

Opening balance

171,651

145,145

316,796

Additions

103,341

27,264

130,605

Repayment of shareholder loan investments

(4,120)

-

(4,120)

Unrealised movement in fair value of investments (note 3)

(241)

13,794

13,553

 

270,631

186,203

456,834

 

The unrealised movement in fair value of investments of the Group during the period was made up as follows:

 

For the six

months ended

 30 June 2019

€'000

For the six

months ended

30 June 2018

€'000

Decrease in DCF valuation of investments

  (7,364)

(3,296)

Repayment of shareholder loan investments (note 17)

14,733

4,120

Movement in cash balances of SPVs

7,077

11,176

Acquisition costs

234

1,553

 

14,680

13,553

 

Fair value measurements

As disclosed on pages 53 and 54 of the Company's Annual Report for the year ended 31 December 2018, IFRS 13 "Fair Value Measurement" requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities ranges from level 1 to level 3 and is determined on the basis of the lowest level input that is significant to the fair value measurement.

 

The fair value of the Group's investments is ultimately determined by the underlying fair values of the SPV investments. Due to their nature, they are always expected to be classified as level 3, as the investments are not traded and contain unobservable inputs. There have been no transfers between levels during the six months ended 30 June 2019. All other financial instruments are classified as level 2.

 

Sensitivity analysis

The fair value of the Group's investments at 30 June 2019 is €791,798,164 (31 December 2018: €757,398,839). The analysis below is provided in order to illustrate the sensitivity of the fair value of investments to changes in an individual input, while all other variables remain constant. The Board considers these changes in inputs to be within reasonable expected ranges. This is not intended to imply the likelihood of change or that possible changes in value would be restricted to this range.

 

Input

Base case

Change in input

Change in                     fair value of investments

€'000

Change in NAV per share

cent

Discount rate

6 - 7 per cent.

+ 0.25 per cent.

(18,566)

(3.6)

 

 

- 0.25 per cent.

19,214

3.7

 

 

 

 

 

Energy yield

P50

10 year P90

(52,240)

(10.0)

 

 

10 year P10

51,973

10.0

 

 

 

 

 

Power price

Forecast by leading consultant

- 10 per cent.

(35,920)

(6.9)

 

+ 10 per cent.

35,838

6.9

 

 

 

 

 

Inflation rate

2 per cent.

- 0.50 per cent.

(28,056)

(5.4)

 

 

+ 0.50 per cent.

29,947

5.8

 

The sensitivities above are assumed to be independent of each other. Combined sensitivities are not presented.

 

9.  Unconsolidated Subsidiaries

 

There have been no changes to the unconsolidated subsidiaries of the Group as disclosed on page 55 of the Company's Annual Report for the year ended 31 December 2018. As the Company is regarded as an investment entity under IFRS, its subsidiaries have not been consolidated in the preparation of the financial statements.

                                                                                                               

There have been no changes to security deposits or guarantees as disclosed on page 55 of the Company's Annual Report for the year ended 31 December 2018.

 

10.  Receivables

 

 

30 June 2019

31 December 2018

 

€'000

€'000

Deferred tax asset

1,237

1,237

Sundry receivables

465

47

Prepayments

64

32

Accrued income

38

1,980

VAT receivable

30

190

 

1,834

3,486

 

11.  Payables

 

30 June 2019

31 December 2018

 

€'000

€'000

Investment management fee payable

1,344

928

Acquisition costs payable

1,057

5,421

Other payables

1,043

849

Loan interest payable

816

536

Other finance costs payable

36

188

Share issue costs payable

-

14

 

4,296

7,936

 

12.  Loans and Borrowings

 

30 June 2019

31 December 2018

 

€'000

€'000

Opening balance

362,031

71,169

Revolving credit facility

 

 

    Drawdowns

-

400,292

    Repayments

(111,031)

(109,430)

Closing balance

251,000

362,031

 

 

For the six months ended 30 June 2019

For the six

months ended

 30 June 2018

 

€'000

€'000

Loan interest

2,749

1,130

Commitment fees

242

438

Other facility fees

44

544

Professional fees

17

-

Finance expense

3,052

2,112

 

The loan balance as at 30 June 2019 has not been adjusted to reflect amortised cost, as the amount is not materially different from the outstanding balances.

 

As at 30 June 2019, the balance of this facility was €251,000,000 (31 December 2018: €362,030,526), accrued interest was €815,750 (31 December 2018: €536,179) and the outstanding commitment fee was €36,120 (31 December 2018: €28,135).

 

13. Contingencies

 

At the time of acquisition, wind farms which had less than 12 months' operational data may have had a wind energy true-up applied, whereby the purchase price may have been adjusted (up or down) so that it is based on a 2 year operational record, once the operational data has become available.

 

The following three wind energy true-ups remain outstanding and the maximum adjustment under each are as follows: Glanaruddery €2,600,000; Lisdowney €1,583,000 and Knockalour €489,000.

 

14. Share capital - ordinary shares of €1

 

Date

Issued and fully paid

Number of shares issued

Share capital

Share premium

Total

 

 

 

€'000

€'000

€'000

1 January 2019

Opening balance

380,000,000

3,800

120,009

123,809

22 March 2019

Issued and paid

140,000,000

1,400

146,300

147,700

22 March 2019

Less share issue costs

-

-

(2,431)

(2,431)

 30 June 2019

 

520,000,000

5,200

263,878

269,078

 

Shareholders are entitled to all dividends paid by the Company and, on winding up, provided the Company has satisfied all of its liabilities, the shareholders are entitled to all of the residual assets of the Company.

 

15. Net assets per share

 

 

30 June 2019

31 December 2018

Net assets - €'000

539,394

393,954

Number of ordinary shares issued

520,000,000

380,000,000

Total net assets - cent

103.7

103.7

 

16. Reconciliation of operating profit for the period to net cash from operating activities

 


For the six months ended

30 June 2019


For the six months ended

30 June 2018

 

€'000

€'000

Operating profit for the period

16,762

13,810

Adjustments for:

 

Movement in fair value of investments (note 3)

(14,301)

(13,553)

Investment acquisition costs

234

1,553

Decrease in receivables

1,297

533

Increase in payables

  467

2,080

Net cash flows from operating activities

4,459

4,423

 

 

17. Related party transactions

 

On 25 March 2019, the Company increased its loan to Holdco by €145,397,635 (30 June 2018: €nil) and Holdco made repayments of €14,200,000 (30 June 2018: €nil).

 

Holdco has a Management and Operating Agreement with Knockacummer, Killhills and Ballybane in relation to the management, operation and maintenance of the SPV. Holdco receives a fee of €25,990 per annum from each SPV. Amounts due to Holdco in respect to these fees at 30 June 2019 is €38,277 (31 December 2018: €32,843).

 

The table below shows the Group's shareholder loans with the wind farm investments.

 

Entity

Loans at 1 January 2019

Loans advanced in the period

Loan repayments

Loans at 30 June 2019

Accrued interest at 30 June 2019

Total

 
 

 

€'000

€'000

€'000

€'000

€'000

€'000

 

Knockacummer

 127,170

-

(4,621)

122,549

843

123,392

 

Monaincha

 73,376

-

(2,472)

70,904

974

71,878

 

Glanaruddery

 52,129

-

(318)

51,811

532

52,343

 

Ballybane

 48,250

-

(3,732)

44,518

629

45,147

 

Killhills

 28,157

-

(1,434)

26,723

278

27,001

 

Tullynamoyle II

 16,964

-

(312)

16,652

208

16,860

 

Kostroma

 16,472

-

(500)

15,972

480

16,452

 

Garranereagh

 14,798

-

(444)

14,354

197

14,551

 

Lisdowney

 12,726

-

(618)

12,108

153

12,261

 

Sliabh Bawn

 9,824

-

-

9,824

-

9,824

 

Knocknalour

 7,348

-

(282)

7,066

77

7,143

 

Cloosh Valley

 5,791

2,895

-

8,686

-

8,686

 

Raheenleagh

 2,019

-

-

2,019

-

2,019

 

 

 415,024

2,895

(14,733)

403,186

4,371

407,557

 

 

During the period, there were no dividends receivable from the Group's investments.

 

18.  Subsequent events

 

On 25 July 2019, the Board approved a dividend of €7,839,000 equivalent to 1.5075 cent per share. The record date for the dividend was 2 August 2019 and the payment date was 29 August 2019.

On 10 September 2019, the Group entered into an agreement to acquire the 20MW Gortahile wind farm from Glennmont Partners.

 

19.  Board approval

 

The Group's Interim Report and Financial Statements were approved by the Board of Directors on 11 September 2019.

Company Information

 

Directors (all non executive)

Registered Company Number

Rónán Murphy

598470

Emer Gilvarry

 

Kevin McNamara

 

 

Registered Office

 

Riverside One

Investment Manager

Sir John Rogerson's Quay

Greencoat Capital LLP

Dublin 2

3rd Floor, Burdett House

 

15-16 Buckingham Street

 

London WC2N 6DU

Registered Auditor

 

BDO

 

Beaux Lane House

Company Secretary

Mercer Street Lower

Andrea Finegan

Dublin 2

3rd Floor, Burdett House

 

15-16 Buckingham Street

 

London WC2N 6DU

Legal Advisers

 

McCann Fitzgerald

 

Riverside One

Administrator

Sir John Rogerson's Quay

Northern Trust International Fund

Dublin 2

Administration Services (Ireland) Limited

 

Georges Court

 

56-62 Townsend Street

Euronext Growth Advisor, NOMAD and

Dublin 2

Broker

 

Davy Corporate Finance

 

Davy House

Depositary

49 Dawson Street

Northern Trust International Fiduciary 

Dublin 2

Services (Ireland) Limited

 

Georges Court

 

56-62 Townsend Street

Account Banks

Dublin 2

Allied Irish Banks, plc.

 

40/41 Westmoreland Street

 

Dublin 2

Registrar

 

Computershare Investor Services

Northern Trust International Fiduciary 

(Ireland) Limited         

Services (Ireland) Limited

Heron House, Corrig Road

Georges Court

Sandyford Industrial Estate                

56-62 Townsend Street

Dublin 18

Dublin 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defined Terms

Aggregate Group Debt means the Group's proportionate share of outstanding third party debt.

 

Ballybane means Ballybane Windfarms Limited

 

BDO means the Company's Auditor as at the reporting date

 

Board means the Directors of the Company

 

Brexit mean the withdrawal of the United Kingdom from the European Union

 

CFD means Contracts for Difference

 

Cloosh Valley means Cloosh Valley Wind Farm Holdings DAC and Cloosh Valley Wind Farm DAC

 

Company means Greencoat Renewables PLC

 

DCF means Discounted Cash Flow

 

EU means the European Union

 

GAV means Gross Asset Value as defined in the Admission Document

 

Garranereagh means Sigatoka Limited

 

Glanaruddery means Glanaruddery Windfarms Limited and Glanaruddery Energy Supply Limited

 

Group means Greencoat Renewables PLC, GR Wind Farms 1 Limited and GR Wind Farms 2 Limited

 

Holdco means GR Wind Farms 1 Limited

 

IAS means International Accounting Standards

 

IFRS means International Financial Reporting Standards

 

Investment Manager means Greencoat Capital LLP

 

IPO means Initial Public Offering

 

Killhills means Killhills Wind Farm Limited

 

Knockacummer means Knockacummer Wind Farm Limited

 

Knocknalour means Knocknalour Wind Farm Holdings Limited and Knocknalour Wind Farm Limited

 

Kostroma Holdings means Kostroma Holdings Limited

 

Lisdowney means Lisdowney Wind Farm Limited

 

Monaincha means Monaincha Wind Farm Limited

 

NAV means Net Asset Value as defined in the Admission Document

 

NAV per Share means the Net Asset Value per Ordinary Share

 

NOMAD means a company that has been approved as a nominated advisor for the Alternative Investment Market (AIM), by the Euronext Dublin and London Stock Exchange.

 

PPA means Power Purchase Agreement entered into by the Group's wind farms

 

PSO means Public Support Obligation

 

Raheenleagh means Raheenleagh Power DAC

 

REFIT means Renewable Energy Feed-In Tariff

 

RESS means Renewable Energy Support Scheme

 

Sliabh Bawn means Sliabh Bawn Holding DAC, Sliabh Bawn Supply DAC and Sliabh Bawn Power DAC.

 

SPVs means the Special Purpose Vehicles which hold the Group's investment portfolio of underlying operating wind farms

 

Tullynamoyle II means Tullynamoyle Wind Farm II Limited

 

UK means United Kingdom of Great Britain and Northern Ireland

 

Forward Looking Statements and other Important Information

The Review Section of this report has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any other purpose.

 

This document may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "plans", "projects", "will", "explore" or "should" or, in each case, their negative or other variations or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions.

 

These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include, but are not limited to, statements regarding the intentions, beliefs or current expectations of the Company, the Directors and/or the Investment Manager concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to future events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies may differ materially from the impression created by, or described in or suggested by, the forward-looking statements contained in this document.

 

In addition, even if actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies, are consistent with the forward looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods.  A number of factors could cause results and developments of the Company to differ materially from those expressed or implied by the forward looking statements including, without limitation, general economic and business conditions, global renewable energy market conditions, industry trends, competition, changes in law or regulation, changes in taxation regimes, the availability and cost of capital, currency fluctuations, changes in its business strategy, political and economic uncertainty. The forward-looking statements herein speak only at the date of this document.

 

As a result, you are cautioned not to place any reliance on such forward-looking statements and neither the Company nor any other person accepts responsibility for the accuracy of such statements. 

 

Subject to their legal and regulatory obligations, the Company, the Directors and the Investment Manager expressly disclaim any obligations to update or revise any forward- looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

 

In addition, this document may include target figures for future financial periods. Any such figures are targets only and are not forecasts. Nothing in this document should be construed as a profit forecast or a profit estimate.

 

This Half Year report has been prepared for the Company and its subsidiaries as a whole and therefore gives greater emphasis to those matters which are significant in respect of Greencoat Renewables PLC and its subsidiary undertakings when viewed as a whole.

 

The information in this document does not constitute an offer to sell or an invitation to buy shares in Greencoat Renewables PLC or an invitation or inducement to engage in any other investment activities.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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