30
September 2024
US SOLAR FUND
PLC
('USF', the
'Company')
INTERIM RESULTS TO 30 JUNE
2024
US Solar Fund plc (LON: USF
(USD)/USFP (GBP)), the renewable energy fund investing in
utility-scale solar power plants across North America, is pleased
to announce its interim results for the six months ended 30 June
2024.
FINANCIAL HIGHLIGHTS
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Net Asset Value (NAV) of $230.4m per
share (31 December 2023: $258.2m). NAV movement (down 20%) largely
driven by the return of $18.6 million plus costs to shareholders
via a tender offer
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NAV per share of $0.75 (31 December
2023: $0.78 per share), down 4%, driven by:
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Risk free rate used in the discount
rate for portfolio valuations is the US has increased by 40bps
which was partially offset by a reduction in risk premia and the
combined impact is a reduction to the NAV of $8.6
million
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The weighted average discount rate
used is 9.2% (pre-tax)
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Dividend distributions of $6.8
million approved to be paid to shareholders during the
period
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Changes in operating assumptions
reflecting the valuation impact of revisions made to the revenue
and cash flow assumptions, including to REC contracts, as
separately announced
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Macroeconomic assumptions, including
changes to inflation and depositary rates contributed to an uplift
of $0.4 million to NAV
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Changes in the merchant curves
contributed an uplift of $11.6 million to NAV
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NAV return of $2.2 million reflects
valuation impacts of cash distributions from underlying assets, RCF
reduction, net working capital and other adjustments
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Dividend of $0.56 to be paid for Q2
20242024 to be paid by 29 October 2024, in line with the Company's
interim dividend target of $0.0225 per share
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Operational dividend cash
cover[1] of 0.62x (30 June 2023: 0.50x),
the 2024 dividend target is forecasted to be fully covered by cash
generated from operations
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Commenting on the interim results, Gill Nott, Chair of US
Solar Fund, said:
"Over the past six months, working
with the Company's new Investment Manager Amber Infrastructure
Investment Advisor, LLC (AIIA), USF has delivered on its commitment
to return capital, via a tender offer in June. The Company acquired
approximately 7% of the issued share capital at a significant
premium to the prevailing market price, returning $18.6 million to
shareholders earlier this year.
Our focus remains on taking steps to
ensure the Company's portfolio is robust, optimised and capable of
being presented to the market for a future liquidity event in order
to maximise shareholder value. The immediate plan, in addition to
the continuing focus on improving performance, is to progress the
proposed refinancing.
We have valued the constructive
discussions held with shareholders during the period and look
forward to continuing positive engagement. On behalf of my
colleagues on the Board, we thank you for your ongoing
support."
OPERATIONAL HIGHLIGHTS
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Total generation of 365GWh, 6.8%
below budget, of which:
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3.2% (31 Dec 2023: 2.0%)
attributable to below forecast solar irradiance from unfavourably
weather across most of the portfolio during Q1 2024, particularly
at USF's largest asset, the 128MW Milford site
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3.6% (31 Dec 2023: 5.2%) arose from
unscheduled outages including low impact outages of solar plant,
utility grid outages, and delays to repair and restoration
work
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Supported by the Board, the
Investment Manager continues to assess external contractors'
performance to ensure early detection and resolution of issues
impacting generation. An O&M subcontractor for two sites was
replaced during the period with consideration for additional sites
going forward
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Electricity generated by USF's
portfolio equates to 234,500 tCO2e emissions displaced
(30 June 2023: 220,200 tCO2e (current
portfolio))
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Portfolio weighted average power
purchase agreements (PPA) term of 11.4 years (31 Dec 2023: 11.9
years). All PPA counterparties are investment-grade (Average
offtaker credit rating of BBB+)
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Portfolio of 41 operating solar
assets with a total capacity of 443MWDC
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All portfolio assets have PPAs with
contracted prices for 100% of electricity generated
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In line with the Board's request,
AIIA, as the new Investment Manager, has concluded a full review of
portfolio and valuation assumptions. The Board is pleased with the
approach AIIA has taken towards proactive capital management and
enhanced reporting disclosures
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GOVERNANCE
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Appointment of Mark Lerdal as of 1
October 2024, an experienced energy and renewables US-based
executive, as an independent non-executive director, following the
retirement of Rachael Nutter from the Board
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Shareholders voted against
discontinuation at the 2024 Annual General Meeting, confirming
continuation of the Company
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CAPITAL MANAGEMENT AND OUTLOOK
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USF returned $18.6 million to
shareholders (around 7% of the Company's shares) at a significant
premium to the prevailing market price
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As previously announced, dividend
target reduced to $0.0225 cents per share, in order to improve
operational cash dividend coverage during the remainder of the
year
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Reduction of the Company's revolving
credit facility from $40 million to £20 million, which remains
undrawn
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Board remains focused on the
efficient and disciplined management of capital, with the
overriding objective of driving shareholder value
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In addition to the focus on
performance, the Board is progressing a proposed
refinancing
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The Board will continue to monitor
the market for similar assets as those held by the Company with a
view to the realisation of value from the Company's assets when the
time is right
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Interim report
In accordance with UK Listing Rule
6.4.1, copies of the Company's interim report have been submitted
to the UK Listing Authority and will shortly be available to view
on the Company's corporate website at http://www.ussolarfund.co.uk
and for inspection from the National Storage
Mechanism at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
For
further information, please contact:
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US
Solar Fund
Meredith Frost (Amber)
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+44 20 7939 0550
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Cavendish Securities Plc
Tunga Chigovanyika
James King
JTC
(UK) Limited
Ruth Wright
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+44 20 7397 8900
USSolarFund-CompanySecretary@jtcgroup.com
+44 207 409 0181
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KL
Communications
Charles Gorman
Charlotte Francis
Amy Levingston Smith
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+44 20 3882 6644
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About US Solar Fund plc
US Solar Fund plc, established in
2019, listed on the premium segment of the London Stock Exchange in
April 2019. The Company's investment objective is to provide
investors with attractive and sustainable dividends with an element
of capital growth by owning and operating solar power assets in
North America and other OECD countries in the Americas.
The solar power assets that the
Company acquires or constructs are expected to have an asset life
of at least 30 years and generate stable and uncorrelated cashflows
by selling electricity to creditworthy offtakers under long-term
power purchase agreements (or PPAs). The Company's portfolio
currently consists of 41 operational solar projects with a total
capacity of 443MWDC, all located in the United States.
Further information on the Company
can be found on its website at www.ussolarfund.co.uk.
About Amber Infrastructure Group
Amber Infrastructure Investment
Advisor LLC, a subsidiary of the Amber Infrastructure Group, was
appointed as the Company's Investment Manager on 1 December
2023.
Amber Infrastructure Group (Amber)
is an international infrastructure specialist, focused on
investment origination, development, asset management and in
Europe, fund management. Amber's core business focuses on
infrastructure assets across the public, transport, energy, digital
and demographic infrastructure sectors that support the lives of
people, homes and businesses internationally.
Among other funds, Amber advises
International Public Partnerships, a FTSE 250-listed Company with a
market cap of £2.4billion and 15-year track record of long-term
investment in infrastructure assets globally. Amber is
headquartered in London with offices in Europe, North America and
Australia and employs c.180 infrastructure professionals. Amber has
had a strategic partnership with Hunt Companies, Inc. in the US
since 2015 and completed their previously announced strategic
combination with Boyd Watterson in August 2024.
Learn more at www.amberinfrastructure.com.