AUS
NZ
UK
CA
USA
IND
The Renewables Infrastructure Group Limited (LSE:TRIG), a London-listed investment company, has released its interim results for the six months ended 30 June 2024, highlighting steady cash generation and a slight decline in valuation due to external factors. TRIG is advised by InfraRed Capital Partners as Investment Manager and Renewable Energy Systems (RES) as Operations Manager.
Dividend Stability and Cash Generation
TRIG maintained a strong dividend cover of 1.1x during the first half of 2024, compared to 1.7x in the same period in 2023. Notably, the cover would have been 2.2x if not for the repayment of £103 million in project-level debt. Despite a lower cover ratio, the Board reaffirmed its dividend guidance for FY 2024, with an anticipated payout of 7.47p per share, representing a 4% year-on-year growth.
Valuation Impact and Portfolio Performance
The Company experienced a modest decline in its Net Asset Value (NAV) per share, decreasing by 4.3p to 123.4p as of 30 June 2024, down from 127.7p at the end of December 2023. This decline was primarily driven by lower near-term power price forecasts, reduced inflation expectations, and generation falling below budget. The generation shortfall was notably impacted by cable outages at two UK offshore wind farms, one of which has already been repaired. Remedial works for the second site are planned, with commercial protections in place to mitigate further risks.
The valuation discount rates for the portfolio remained largely unchanged, with a slight increase in the weighted average discount rate to 8.3%, up from 8.1% at the end of 2023. This increase reflects changes in the portfolio composition, including the acquisition of Fig Power, a UK-based energy projects developer.
Portfolio Resilience and Growth Prospects
TRIG's diversified 2.7GW portfolio continues to demonstrate resilience, generating 2.9TWh of clean energy during the period, equivalent to powering 1.8 million homes and displacing 2.2 million tonnes of carbon emissions annually. The portfolio's stability is underpinned by:
- Fixed Revenue Streams: 67% of projected revenues over the next decade are set at a fixed price per MWh generated.
- Inflation-Linked Revenues: 57% of projected revenues over the next ten years are directly linked to inflation, offering protection against rising costs.
- Stable Debt Structure: The vast majority of TRIG's debt is fixed rate and amortising, providing long-term financial stability.
Strategic Developments and Future Outlook
The first half of 2024 saw significant strategic progress, with the commissioning of 121MW of new onshore wind capacity from the Ranasjö and Salsjö wind farms in Sweden. Additionally, TRIG commenced construction on the Ryton 78MW battery storage project in the UK, marking the first project from its 1GW development pipeline aimed for completion by 2030.
Operational and technical enhancements have been a key focus, with ongoing aerodynamic improvements across the portfolio designed to boost generation output. TRIG continues to benefit from the expertise of its management team, which leverages the investment acumen of InfraRed and the operational prowess of RES to drive capital growth and enhance the Company's overall performance.
