BlackRock Energy and Resources Income Trust NAV per share increased by 2.3% during the month of December

BlackRock

BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.

All information is at 31 December 2021 and unaudited.

For more information on BlackRock Energy and Resources Income Trust and how to access the opportunities presented by the energy and resources markets, please visit www.blackrock.com/uk/beri 

Performance at month end with net income reinvested

OneThreeSixOneThreeFive
MonthMonthsMonthsYearYearsYears
Net asset value2.3%7.6%5.9%28.1%68.2%58.9%
Share price5.3%10.9%12.1%34.2%68.0%50.8%

Sources: Datastream, BlackRock

At month end

Net asset value – capital only:104.10p
Net asset value cum income1:105.21p
Share price:100.70p
Discount to NAV (cum income):4.3%
Net yield:4.1%
Gearing – cum income:6.0%
Total assets:£122.3m
Ordinary shares in issue2:116,218,357
Gearing range (as a % of net assets):0-20%
Ongoing charges3:1.21%

1 Includes net revenue of 1.11p.
2 Excluding 2,747,643 ordinary shares held in treasury.
3 Calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation for the year ended 30 November 2021.

Sector Overview

Mining44.8%
Traditional Energy32.8%
Energy Transition                23.4%
Net Current Liabilities                  -1.0%
—–
100.0%
=====
Sector Analysis% Total Assets^Country Analysis% Total Assets^
Mining:
Diversified25.5Global53.6
Industrial Minerals4.7USA17.5
Copper4.4Canada11.7
Steel3.6Latin America7.9
Gold2.8Australia3.5
Diamonds1.2Germany2.0
Iron1.0Russia1.4
Nickel0.9France0.9
Platinum0.7India0.9
Subtotal Mining:44.8Ireland0.8
South Africa0.8
Other Net Liabilities-1.0
Traditional Energy:—–
E&P13.9100.00
Integrated13.6=====
Refining & Marketing3.0
Distribution2.3
Subtotal Traditional Energy:32.8
Energy Transition:
Energy Efficiency10.0
Electrification7.2
Renewables3.6
Transport2.6
Subtotal Energy Transition:23.4
Net Current Liabilities-1.0
—-
100.0
=====

^ Total Assets for the purposes of these calculations exclude bank overdrafts, and the net current liabilities figure shown in the tables above therefore exclude bank overdrafts equivalent to 4.9% of the Company’s net asset value.

Ten Largest Investments

CompanyRegion of Risk
% Total Assets
ValeLatin America
    Equity5.1
    Bond2.1
GlencoreGlobal6.4
BHPGlobal5.0
ChevronGlobal4.5
Anglo AmericanGlobal3.8
First Quantum MineralsGlobal
    Equity2.5
    Bond1.2
ConocoPhillipsGlobal2.7
ArcelorMittalGlobal2.6
TotalGlobal2.4
EnelGlobal2.2

Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:

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The Company’s Net Asset Value (NAV) per share increased by 2.3% during the month of December (in Sterling terms with dividends reinvested).

Global stock markets rose in December. Rapid spread of the more infectious Omicron Covid-19 variant raised concerns around economic growth and air travel demand; however early data suggested symptoms were less severe than earlier strains. Positive economic growth and inflation expectations led the US Federal Reserve to signal a hawkish pivot with potential to accelerate the taper timeline and rate hikes in 2022. The European Central Bank’s announcement of €90 billion quantitative easing expected for 2022 was also modestly hawkish, being less than consensus expectations for €150 billion.

Economic data from China improved modestly, with its manufacturing PMI rising to 50.9 from 49.9 in November (a reading over 50 indicates growth or expansion). Meanwhile, China’s steel production data indicated it was bottoming out following six months of government intervention to curtail production. Within the mined commodities, iron ore was the strongest performer with the 62% fe. price rising by 16.1% over the month. Elsewhere, base metal prices also performed well, with copper, aluminium and zinc prices up by 2.4%, 6.5% and 9.2% respectively.

Within the traditional energy space, China overtook Japan to become the world’s largest importer of liquified natural gas (LNG). OPEC continued with their previously announced plans to increase production by 400,000 barrels per day to meet expanding oil demand. Natural gas prices remained volatile and hit record high levels in the UK and Europe during the month despite ending the month lower. Natural gas prices in the US fell by 14% by month end, whilst UK gas prices fell somewhat further, they remain at significantly elevated levels. The Brent and WTI (West Texas Intermediate) rose by 9.0% and 13.6%, rebounding following November’s oil price falls, ending the month at $78/bbl and $76/bbl respectively.

Within the energy transition theme, the International Energy Agenda (IEA) expected 2021 to be a record year for renewable power installations with c.290GW of installations, following 2020’s record installations. The IEA forecast an acceleration in renewable capacity in the next five years given stronger policy support and recently announced climate targets at COP26. Current annual installations of renewable power are estimated to be around half of the level required to meet the 2050 net zero targets for carbon emissions. Elsewhere, Plug-in electric vehicle sales have accelerated in 2021, despite previously flagged supply chain shortages, with sales to end November of 5.8 million vehicles compared with 3.1 million vehicles sold for all of 2020.

For more information on BlackRock Energy and Resources Income Trust and how to access the opportunities presented by the energy and resources markets, please visit www.blackrock.com/uk/beri 

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