Despite challenges created by the COVID-19 pandemic, Foresight Solar Fund has seen its UK portfolio perform 15.9% above base case.
According to the company’s interim results, the six months ending 30 June was therefore its best performance since its IPO. During this period, Foresight’s portfolio generated a total of 502,579 MWh.
Its NAV decreased to £582.1 million, a drop of £45.9 million from its 31 December 2019 results. This is equivalent to 96p per share, falling from 103.8p per share six months ago, due to the reduction in power price forecasts.
This is based on forecasts obtained from independent third-party consultants, and led to discount rates for the UK assets being reduced by 0.25% to 6.75% to reflect the current market valuation of operational solar assets.
Foresight Solar Fund’s gross asset value fell from £1,071.5 million in December to £1,022.5 million in its interim results.
It has declared a dividend of 3.45p per share for the period, and confirmed that it is on track to deliver its 2020 target of 6.91p per share. Its annual shareholder return since its IPO – on 29 October 2013 – also fell, down to 6.79% from 9.43% in December.
Alex Ohlsson, chairman of Foresight Solar Fund Limited said that whilst COVID-19 had created “unprecedented challenges” he was pleased with the resilience of the company and how its team has adapted.
“The health and safety of all stakeholders and their staff has been our top priority throughout the period and, with safe working protocols in place, we have delivered a record operational outperformance across the UK portfolio for the period, at 15.9% above base case, and remain on track to deliver our target dividend for the year."
He continued to highlight that the fall in power prices, along with the wider global financial markets, will remain challenging for the remainder of the year. Wholesale power costs fell by £488 million, while non-commodity power revenues saw a loss of £649 million, according to energy trading company Hartree Solutions.
"We will continue to focus on delivering operational and financial stability, securing opportunities to enter fixed power price contracts to improve cash flow stability where possible, and will continue to explore opportunities to expand and diversify further our portfolio of assets whilst maintaining our strict criteria for risk-adjusted returns. We look forward to a further period of progress," continued Ohlsson.
Today’s (3 September) results follow similar trends to the company’s Q1 results, which saw generation from its UK portfolio perform 9% over budget in March due to high levels of irradiation. Similarly its full year results for 2019 performed 3.9% above budget, but in both sets its NAV faltered due to power price predications.