Octopus Renewables Infrastructure Trust (ORIT) H1 2024 earnings summary

Executive summary

• NAV total return for H1 2024 was +2.0%, but total shareholder return was -16.9% due to sector-wide discounts to NAV.

• Dividend target for FY 2024 increased by 4% to 6.02p per share, fully covered by operational cashflows.

• Portfolio expanded to 808MW capacity, including acquisition of Ireland's largest solar complex and completion of UK’s Breach solar farm.

• Share buyback programme launched, repurchasing 1.2 million shares by period end and 3 million post-period, accretive to NAV.

• Capital recycling programme generated £161m proceeds from three asset sales, reducing short-term debt and validating asset valuations.

Financial highlights

• NAV per share at 30 June 2024: 105.2p (down from 106.0p at 31 Dec 2023); NAV: £592.8m.

• Operating income: £14.6m (includes -£4.1m fair value movement); profit for the period: £11.3m.

• EBITDA from operational assets: £45.3m; gross revenue: £68.7m (up 11% year-over-year but 6% below budget).

• Dividend cover for H1 2024: 1.33x (vs 1.09x in H1 2023); dividend yield: 8.4%.

• Ongoing charges ratio annualised at 1.18%.

Outlook and guidance

• Easing macroeconomic headwinds expected as UK and EU interest rates begin to fall, supporting sector recovery.

• Portfolio remains well-diversified with 84% of revenues fixed for the next two years and 48% inflation-linked for the next decade.

• Further capital recycling and selective new investments planned, with focus on construction and developer assets.

• Dividend target for FY 2024 expected to be fully covered post-Ljungbyholm sale.