NextEnergy Solar Fund Ltd · LSE:NESF
NextEnergy Solar Fund — H1 FY2020 Earnings Presentation
29 slides from NextEnergy Solar Fund's earnings presentation, Nov 14, 2019
Slide 1: NextEnergy Solar Fund Limited Analyst Presentation
NextEnergy Solar Fund Limited Results for the six months ended 30 September 2019 Analyst Presentation –14 November 2019
Slide 2: Agenda – Presented by NextEnergy Capital, Investment Adviser
Results for the six months ended 30 September 2019 Agenda – Presented by NextEnergy Capital, Investment Adviser • Investment Update – Michael Bonte-Friedheim MICHAEL BONTE-FRIEDHEIM NEC Founding Partner & CEO • Financial Results – Aldo Beolchini ALDO BEOLCHINI NEC Managing Partner & CIO • Q&A - Appe
Slide 3: Investment Update
Investment Update
Slide 4: Investment Highlights
Results for the six months ended 30 September 2019 Investment Highlights 30 September 2019 ◼ Investment portfolio of 89 solar PV assets amounting to an increase in 14MWp of capacity installed NAV – £649m NAV/share – 111.2p ◼ Construction of first subsidy-free asset completed: Hall Farm II of 5.4
Slide 5: Continuous Operating Outperformance
Results for the six months ended 30 September 2019 Continuous Operating Outperformance ◼ NESF’s portfolio consistently generates more Asset Assets Irradiation Generation electricity than its Period Management acquisition budget (+5.0% monitored (delta vs. budget) (delta vs. budget) Alpha(1) since IP
Slide 6: Portfolio Assets
Results for the six months ended 30 September 2019 Portfolio Assets 1 Higher Hatherleigh 36 Bowden 71 Balhearty ◼ NESF’s 89 PV assets 2 Shacks Barn 37 Stalbridge 72 Brafield represent 705MW of 38 Aller Court 3 Gover Farm 73 Huddlesford PL installed capacity and 4 Bilsham 39 Rampisham 74 Sywell £905m
Slide 7: Subsidy-free construction: Staughton Airfield
Results for the six months ended 30 September 2019 Subsidy-free construction: Staughton Airfield ◼ In August 2019, NESF energised its maiden subsidy-free asset in the UK, Hall Farm II ◼ Staughton is a subsidy-free 50MWp plant near the Bedfordshire/ Cambridgeshire border ◼ NESF expects Staughton to b
Slide 8: UK Energy Market Prices
Results for the six months ended 30 September 2019 UK Energy Market Prices ◼ Current UK long-term Forecast UK Power Price (Real 2019 - £/MWh) (1) power price forecast 75.0 implies an average growth rate of c.0.9% in real terms 70.0 between 2019 and 2039 65.0 ◼ As at September 2019, c.69% of NESF rev
Slide 9: Italy Energy Market Prices
Results for the six months ended 30 September 2019 Italy Energy Market Prices ◼ Current Italian long-term Forecast Italy Power Price (Real 2019 - €/MWh) (1) power price forecast 70.0 implies an average growth rate of c.-0.3% in real terms between 2019 and 2039 60.0 (€/MWh) 50.0 40.0 30.0 2019 2022 2
Slide 10: Portfolio’s Secured Power Prices
Results for the six months ended 30 September 2019 Portfolio’s Secured Power Prices Apollo - ROC Assets (226 MW) Radius and NIBC assets (112 MW) ◼ NEC continues to Output Locked Locked Price (£/MWh) Output Locked Locked Price (£/MWh) secure higher power Winter 2019 / 2020 70.0% 57.2 70.0% 57.2 price
Slide 11: Strategic Focus 2019/20
Results for the six months ended 30 September 2019 Strategic Focus 2019/20 ◼ Optimisation of revenues and reduction of operating expenses of current portfolio of assets ◼ Continued focus on developing our electricity sales strategy (e.g. corporate PPAs or direct-wire agreements) to maximise value fr
Slide 12: Financial Results
Financial Results
Slide 13: Financial Highlights
Results for the six months ended 30 September 2019 Financial Highlights ◼ Net Asset Value grew from £645m to £649m. NAV per share increased to 111.2p ◼ Second Issuance of Preference Shares for £100m on 12 August 2019 Proceeds applied to repayment of short-term debt facilities, with the balance use
Slide 14: Track Record since IPO
Results for the six months ended 30 September 2019 Track Record since IPO 14
Slide 15: Solis Portfolio
Results for the six months ended 30 September 2019 Solis Portfolio ◼ High risk-adjusted returns Business Case: Solis Acquisition and performance (9.4% at acquisition) ◼ Acquisition of eight solar plants in Italy in December 2017 for a total installed capacity of 34.5MWp and total value of €132m ◼ Po
Slide 16: Portfolio Valuation
Results for the six months ended 30 September 2019 Portfolio Valuation Discount rates ◼ 6.50% unlevered discount rate for UK operating solar assets (2018: 6.75%) ◼ Up to 1.0% risk premium for the levered assets/portfolios Resulting levered discount rates of up to 7.50% for levered assets ◼ Discoun
Slide 17: Optimised Capital Structure
Results for the six months ended 30 September 2019 Optimised Capital Structure Equity ◼ NESF has total financial ◼ 583.6m Ordinary Shares in issue, targeting a total dividend debt facilities outstanding Ordinary Shareholders of 6.87p per ordinary share for the financial year ending 31 of £211m which
Slide 18: NAV and Portfolio Valuation Bridges
Results for the six months ended 30 September 2019 NAV and Portfolio Valuation Bridges 18
Slide 19: Robust Dividend Cover
Results for the six months ended 30 September 2019 Robust Dividend Cover ◼ During the period the Company generated cash income of £32.9m, had net operating costs of £3.6m and paid a preference shares dividend of £3m ◼ Issuance of preference shares has improved cashflows by £2.3m during the period, w
Slide 20: Q&A – Appendix
Q&A – Appendix Leading Solar Asset Manager
Slide 21: NESF Overview
Results for the six months ended 30 September 2019 NESF Overview NextEnergy Solar Fund ❑ Attractive acquisition values sourced by NextEnergy Capital ❑ Operational outperformance supported by WiseEnergy ensuring optimal asset management ❑ Targeting a quarterly dividends linked to UK RPI (6.87p/share
Slide 22: ESG KPIs
Results for the six months ended 30 September 2019 ESG KPIs 30 September 2019 ◼ The mission of the NEC Group is to generate a more sustainable future by leading the transition to clean 134,000 UK homes energy powered for six months (equivalent to Bournemouth and ◼ Following an acquisition, WiseEne
Slide 23: Investment Portfolio Diversification
Results for the six months ended 30 September 2019 Investment Portfolio Diversification 23
Slide 24: UK Energy Market
Results for the six months ended 30 September 2019 UK Energy Market Power Prices ◼ Compared to the previous interim period end, the wholesale day ahead power market in the UK experienced a downward movement from £67/MWh in September 2018 to £36/MWh in September 2019 ◼ The Company’s flexible PPA fram
Slide 25: Italy Energy Market
Results for the six months ended 30 September 2019 Italy Energy Market Power Prices ◼ Compared to the previous interim period end, the wholesale day ahead power market in Italy experienced a downward movement from €76/MWh in September 2018 to €51/MWh in September 2019 Historical Italy Power Prices (
Slide 26: NAV Sensitivities
Results for the six months ended 30 September 2019 NAV Sensitivities ◼ The long-term sensitivity analysis highlights the % change in the investment portfolio value (£647m) as well as the subsequent impact on NAV per share ◼ As of 30 September 2019, the remaining weighted average lease life of the Co
Slide 27: Preference Shares
Results for the six months ended 30 September 2019 Preference Shares ◼ An issuance of £200m is ◼ On 8 November 2018, the Shareholders approved the issuance of £200m of Preference Shares. The expected to increase Company issued the first tranche of £100m in November 2018, and the second tranche of £1
Slide 28: Summary of the Financial Debt outstanding
Results for the six months ended 30 September 2019 Summary of the Financial Debt outstanding ◼ Total debt outstanding at period end was £211m which represents a gearing of 39% (including £200m preference shares) ◼ Average Cost of Debt is 3.5% ◼ NESH V entered into a 15 year FX hedging arrangement wi
Slide 29: Important Notice
Important Notice This document is issued by Next Energy Capital Limited (“NEC”), which is authorised and regulated by the UK Financial Conduct Authority (“FCA”) with registered number 471192. The contents of this document are strictly private and confidential and accordingly may not be published, re
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