Octopus Renewables Infrastructure Trust (ORIT) H2 2023 earnings summary

Executive summary

• FY 2023 NAV total return was +2.1%; NAV fell to £599m from £618m, mainly due to lower power price and inflation forecasts and higher discount rates.

• Four dividends totalling 5.79p per share met the FY 2023 target and were covered 1.18x by operating cashflows; the FY 2024 target rose 4.0% to 6.02p.

• Total shareholder return was -4.4% in FY 2023, while total return since the December 2019 IPO was +6.7%.

Financial highlights

• Profit and total comprehensive income was £12.7m vs £69.8m in FY 2022; basic and diluted EPS was 2.24p vs 12.36p.

• Operating income was £19.7m, including a £23.0m fair-value investment loss; investment income was £42.7m and operating expenses were £7.1m.

• NAV per share was 106.04p vs 109.44p; gross asset value was £980m vs £1,073m and total investment value was £1,127m vs £1,304m.

• FY 2023 declared dividend grew 10.5% YoY to 5.79p per share; dividend cover was 1.18x vs 1.77x.

Outlook and guidance

• FY 2024 dividend target is 6.02p per share, up 4.0% YoY in line with CPI; operating portfolio cashflows are expected to fully cover it.

• Dividend cover is expected to improve in 2024 as Cumberhead, Irish solar and Breach contribute; operating cashflows net of debt service are expected to cover dividends over the next five years.

• Breach solar is expected to connect and become operational in Q2 2024; Woburn Road battery storage is expected in Q1 2025, and Harlockstown solar in Q3 2024.

• Further capital recycling initiatives are expected to conclude during 2024; proceeds may support debt repayment or other capital allocation, including share buy-backs subject to market conditions.