NextEnergy Solar Fund net asset value falls amid reduced demand

(Alliance News) - NextEnergy Solar Fund Ltd on Thursday said its net asset value declined in the first half of its current financial year due to a reduction in price forecasts, and announced its completion of the third phase of its capital recycling programme.

The Guernsey-based specialist investor in solar energy and energy storage said its net asset value on September 30 was 97.8 pence per share, down 6.6% from 104.7p per share on March 31.

NAV reduced 7.5% to GBP572.2 million on September 30 from GBP618.6 million on March 31.

NextEnergy said the reduction in NAV was driven partly by a fall in short-term UK power price forecasts, as a result of declining gas prices and reduced expectations for short-term power demand.

The company said it remained "on track" to deliver its target dividend of 8.43 pence per share for the year due to end March 31, 2025. This would be 1.0% higher than 8.35p last year.

During the six-month period, NextEnergy completed the second phase of its capital recycling programme through its sale of Whitecross, a 35 megawatt solar project, for GBP27 million. This represented a 14% premium to its holding value at March 31.

NextEnergy announced on Thursday that it has now completed the third phase of the capital recycling programme, through its sale of Staughton, a 50 megawatt operating solar asset, for GBP30.3 million. This represented a nearly 22% premium to its holding value at September 30.

The company expects this third phase completion to generate a 0.92 pence per share uplift to its net asset value by December 31. It has raised total capital of GBP72.5 million over the course of the programme so far, and intends to use the proceeds to reduce its short-term debt.

NextEnergy will release updates on the fourth phase of the programme in due course.

NextEnergy Capital Ltd Chief Operating Officer & Head of UK Investments Ross Grier said: "Despite recent macroeconomic pressures and capital outflows from UK equity markets, NextEnergy Solar Fund remains well-placed to capitalise on the renewed momentum towards a low-carbon energy system which has been steadily accelerating since the general election in the UK in July this year. NESF's carefully curated portfolio of 102 operational solar and energy storage assets provides a strong foundation for growth, both from within the existing portfolio and from new opportunities.

"The company continues to deliver reliable returns to shareholders through well-covered quarterly dividends derived from strong cash flows. There is a lot to be positive about looking forward, with multiple political and macroeconomic tailwinds that we expect to benefit NESF, its shareholders, and the renewable energy sector as a whole."

Shares in NextEnergy Solar Fund were up 1.5% at 72.99 pence each in London on Thursday afternoon.

By Emily Parsons, Alliance News reporter

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