Foresight Solar Fund Limited (LON:FSFL), a fund investing in a diversified portfolio of ground-based solar PV and battery storage assets in the UK and internationally, has announced its results for the year ended 31 December 2022.
|●||NAV increased to £771.5 million (31 December 2021: £660.0 million), driven by elevated power prices, above-budget inflation and the Spanish assets beginning operation; NAV per share rose 16.9% to 126.5 pence (31 December 2021: 108.2 pence)|
|●||Electricity generated by the global portfolio was 2.3% above base case, driven by strong operational performance and high irradiation in the UK. UK production was 8.6% ahead, whilst Australia was 12.5% below forecast|
|●||Consolidated revenues and EBITDA were 26% and 37% ahead of budget|
|●||The Company’s 125MW Spanish solar portfolio began operations and, at 11% of total capacity, is expected to make a significant contribution to revenues in 2023|
|●||The Company continued to deliver on its battery storage mandate with the acquisition of 50% equity holdings in the 50MW Clayfords and the 50MW Lunanhead projects|
|●||After the year end, Foresight Solar entered separate exclusive negotiations to acquire the full rights to a further 50MW BSS project, and to purchase a development-stage portfolio with total capacity of over 400MWp in Spain|
|●||Total dividend of 7.12 pence per share for 2022, in line with the Company’s target; dividend cover for 2022 was 1.74x, underwritten by attractive price hedges and higher merchant power prices|
|●||Target dividend of 7.55 pence per share for 2023, an increase of 6% year-on-year; the Company is confident of achieving dividend cover of 1.5x based on cash generated in the period alone, with a similar level of cover expected for 2024 and 2025, assuming current revenue forecasts|
|As at31 December 2022||As at31 December 2021|
|Net Asset Value (“NAV”)||£771.5m||£660.0m|
|NAV per Share||126.5p||108.2p|
|Gross Asset Value (“GAV”)||£1,296.3m||£1,172.0m|
|Total Dividend per Share for the period||7.12p||6.98p|
|Annualised Total Shareholder Return since IPO||7.8%||5.9%|
Commenting on the Company’s results, Alex Ohlsson, Chairman of Foresight Solar Fund Limited, said:
“Foresight Solar has enjoyed another strong year, benefiting not only from elevated power prices and higher than anticipated inflation, but also from its favourable power price hedges, good operational performance, and construction completion of the Spanish portfolio. This resulted in impressive total shareholder return of 24.8% for the calendar year and NAV total return for 2022 of 24%.
“Looking into 2023, the Company is pleased to declare a target dividend of 7.55 pence per share, a 6.0% increase year-on-year. Based on a strong contracted revenue position, and even after accounting for the effects of the EGL and the windfall tax in Spain, this year’s target dividend is expected to be at least 1.50x covered from cash generated in the period alone. A similar level of cover is expected for 2024 and 2025, assuming current revenue forecasts.
“Operationally, the portfolio continued to perform well, generating above budget electricity levels. The Company’s Spanish portfolio is now fully operational and, at 11% of total capacity, is expected to make a significant contribution to 2023 revenues. Foresight Solar has a strong focus on the Spanish market, and I am pleased to announce that the Company is in advanced negotiations to acquire the full project rights to a development-stage portfolio in the country with a potential capacity of more than 400MW. The transaction is well progressed and is expected to close in the first half of 2023.
“After the year end, Foresight Solar also entered exclusive negotiations for the rights to a further 50MW ready-to-build battery project. Discussions have progressed well and completion is expected in the second quarter of 2023. Given the positive market dynamics, the Investment Manager is actively considering building this asset as a longer duration project, as well assessing the potential for extending the duration of its other BSS sites.
“The Investment Manager believes there are several attractive opportunities in UK battery storage and in development-stage portfolios in the UK and Europe. As governments continue to support the transition to a net zero economy and prioritise domestic energy security, there is significant upside for the Company’s core solar and battery storage markets. These industry fundamentals, combined with Foresight Solar’s exciting pipeline of opportunities and attractive yield, position us strongly for 2023 and the following years.”