Octopus Renewables continues buying spree amid market volatility
Octopus Renewables Infrastructure Trust (ORIT) has eased through market volatility and challenging headwinds to complete four acquisitions and grow its net assets during the first six months of the year.
Its net assets have risen 8.6 per cent, while it has also significantly cut losses for shareholders from 6.1 per cent this time last year to 0.2 per cent in June.
Since its initial public offering in December 2019, shareholders have enjoyed a return of 17.5 per cent and a net asset return of 24.8 per cent.
The renewables group has increased its target dividend to 5.24p for the full year, representing an increase of 4.8 per cent over 2021.
Reflecting economic conditions, ORIT forecasts that 51 per cent of forecast operational revenue over the next decade is explicitly inflation-linked.
Its operational portfolio generated 403GWh of electricity during the first six months of the tear, which led to revenue of £38.4m, compared to £10.6m just 12 months ago,
ORIT made four acquisitions over the first half of the year, including its first investments in offshore wind and battery storage.
These acquisitions included the 68MW ‘ready to build’ Breach solar farm in Cambridgeshire, UK and a 7.75 per cent stake in the Lincs Offshore Wind Farm – an operational windfarm located off the east coast of England with installed capacity of 270MW.
The company also agreed to acquire a 50 per cent stake in a 24MWh battery storage project in Bedfordshire, and set up a development platform with Nordic Generation Limited, a specialist developer focused on the Finnish market.
Its portfolio now consists of 347 assets across seven countries and four technologies, as well as three developer investments.
Total capacity, excluding conditional acquisitions, is 583 MW.
Octopus backs long-term plan for renewables
Once fully invested, the portfolio has the potential to power the equivalent of 521,000 homes with clean energy, with an estimated 481,000 tonnes of carbon emissions avoided.
Since the end of the half-year period, ORIT has acquired a further 7.75 per cent stake in the Lincs Offshore Wind Farm.
It has also agreed to acquire the Leeskow Wind Farm, a 34.6MW operational onshore wind farm in Brandenburg, Germany, alongside a 51 per cent interest in the Crossdykes wind farm, a 48MW operational project in Scotland.
On 28 July 2022, shareholders approved a change to the Company’s investment policy to include offshore wind in the Company’s core investment focus, so it now includes solar PV and onshore and offshore wind.
ORIT believes that while the energy crisis in Europe and rising inflation has created significant short-term uncertainty, accelerated investment in renewables will be essential to reducing energy bills and the country’s reliance overseas vendors.
It has sought to manage power price volatility by entering into new short-term fixes, where the pricing available has been favourable compared with forecasts, in order to provide protection against extreme near-term power price fluctuations.