Leading PV and battery investor Foresight Solar Fund reaped its rewards today from international expansion and the UK solar boom, posting 2021 EBITDA earnings 22% ahead of managers’ expectations.
Last year pushed net asset values across the Jersey-registered fund’s 50 UK sites, plus others in Spain and Australia, to £660 million, a rise of 13.4%.
Britain, where the Foresight group generates three-quarters of its annual 903 GWh in solar electricity, benefitted from sunnier skies, tweaking output 1% higher. The fund bought into its first grid-scale battery, paying £12.7 million in May for a half share of a 50 MWh device, next to its Sandridge, Wiltshire farm.
“Revenues (in the UK in 2021) were above budget “, chairman Alex Ohlsson explained, “due to the ability to fix prices above existing power curves and elevated merchant power prices. Higher UK power price forecasts also increased forecast revenues, resulting in total power-related updates, contributing 5.9 pence per share of NAV uplift”.
Total dividends of 6.98 pence per share were declared for the year. Directors forecast 7.12 pence per share for next year, up 2%.
Foresight’s 50 UK solar farms all carry entitlements to legacy subsidies such as ROCs and the FiT. On average, the fund last year received 1.42 ROCs per MWh across its UK portfolio. Its average power price achieved, including fixed price arrangements, was £67.93 per MWh, up 83% on 2020’s figure.
At group level, subsidies contribute 48% of revenues, ahead of another 44% in power sales, both at merchant and fixed prices.
Expansion overseas saw Foresight buying out its partner in 24MW of two operational solar farms in Queensland, Australia.
Four Spanish farms operating and under construction are listed as making up 12% of the fund’s worldwide capacity of 1.043 GWp. A 10-year PPA was signed for the 98.5MW Lorca project in Granada.
In terms of PV module suppliers, the Fund lists Canadian Solar, JA, and Trina as its top trio, among around a dozen makers. For inverters, German firm SMA on 44% are out in front of Power Electronic on 14% and ABB on 13%.
Pictured above, Ohlsson hailed Foresight’s strong performance, built on geographic and revenue diversification. “A total NAV return …of 21.4% and earnings per share of 19.7% were significantly ahead of budget and represent an excellent financial performance”, the chairman writes.
“Strong cash generation meant that we have been able to comfortably pay our target dividend, as we have done every year as a listed company.
“I am pleased to announce an increased dividend target for 2022 of 7.12 pence per share that also benefits from improved dividend cover”, said Ohlsson.
Investors liked what they read. The fund’s share price rose 1.3% by early afternoon, valuing Foresight Solar Fund at £664 million.
That’s good news for BlackRock, 14.55% holders in Foresight Solar Fund. More details here.
Correction: The first version of this report erroneously stated that Foresight Solar Fund’s net asset value had risen by 21.4% in the past year. The correct figure for NAV growth is 13.4%, as corrected in the headline and in the second paragraph above.
