4 November 2024

LEI: 213800B81BFJKWM2JV13

Octopus Renewables Infrastructure Trust plc

("ORIT" or the "Company")

Q3 2024 Factsheet and Net Asset Value

The Board of Octopus Renewables Infrastructure Trust plc announces that the unaudited Net Asset Value ("NAV") of the Company as at 30 September 2024 on a cum-income basis was £582.7 million or 103.77 pence per Ordinary Share (30 June 2024: £592.8 million or 105.15 pence per Ordinary Share).

*Totals may not sum exactly due to rounding

Gain on Sale of Ljungbyholm

In August 2024, ORIT completed the sale of the Ljungbyholm onshore wind farm in Sweden to DWS Infrastruktur Europa, a DWS core infrastructure fund, for a total consideration of approximately €74 million (the "Transaction"). The Transaction achieved an IRR of approximately 11% over the lifetime of ORIT's investment and proceeds from the sale were used to partially repay the short-term debt facility by £64 million. As the end of the period, ORIT had total gearing (total debt drawn as a % of Gross Asset Value ("GAV"³)) of 43.2% (30 June 2024: 46.0%).

The sale represented a premium of £1.4 million to the prevailing valuation of Ljungbyholm (as at 30 June 2024), of which £0.8 million was incorporated into the Net Asset Value as at 30 June 2024, with the additional c.£0.6 million (representing locked-box interest received between 30 June 2024 and completion) reflected in the Net Asset Value as at 30 September 2024.

ORIT acquired the 48 MW wind farm at pre-construction stage in March 2020, investing c.€68 million in the project. The Investment Manager, Octopus Energy Generation, managed the construction phase, successfully bringing the wind farm into operation in June 2021.

The Transaction formed part of the Company's capital recycling programme and followed the sale of two Polish onshore wind assets in December 2023 and the divestment of an option over a Spanish solar PV project in January 2024. The capital recycling programme has now generated approximately £161 million.  Other capital recycling projects are in progress and the Company will provide further updates when appropriate.

Power Prices and Green Certificates

ORIT's portfolio is well-shielded from short-term fluctuations in power prices due to its significant proportion of fixed or contracted revenue. As of 30 September 2024, 85% of ORIT's revenue over the next 24 months was fixed or contracted through to 30 September 2026 (compared with 84% over the 24-month period to 30 June 2026).

Where prices are not fixed under power price agreements or otherwise hedged, the power prices used in the valuations are based on market forward prices in the near term, followed by an equal blend of two independent and widely used market consultants' technology-specific capture price forecasts for each asset. For wind assets, where site-level technological and geographical characteristics can contribute greatly to variability between sites, a site-specific capture price forecast is used in order to more accurately forecast expected cash generation per project.

In Q3 2024, short-term forward power prices generally declined across the markets where ORIT's assets are located, with the exception of Finland, where prices saw a slight increase. Medium to long-term market forecasts remained generally stable or saw marginal increases across most markets. These changes resulted in a total net valuation decrease of £0.4 million.

Adjustments to short-term forward prices for Green Certificates caused a slight valuation decrease of £0.1 million, while medium to long-term Green Certificate prices remained steady. Similar to its power price contracts, ORIT benefits from a high proportion of fixed Green Certificate revenue in the near term, reducing the impact of short-term price fluctuations.

In total, the updates to Power Price and Green Certificate forecasts led to a valuation decrease of £0.5 million, equivalent to -0.09 pence per Ordinary Share.

Inflation¹ and FX

The valuation as at 30 September 2024 includes (i) recent consensus UK inflation forecasts published by His Majesty's Treasury; and (ii) inflation forecasts for European countries published by the European Commission.

During the quarter, inflation forecasts decreased on average across markets in which ORIT's assets are located. This update led to a net valuation decrease of £0.8 million or 0.14 pence per Ordinary Share. The decline was largely driven by reductions in medium-term forecasts across most markets, partially offset by an increase to expected outturn inflation for 2024 and 2025 in the UK. ORIT continues to maintain a high proportion of inflation-linked cash flows with 50% of revenues over a 10-year period to 30 September 2034 explicitly linked to inflation.

In Q3, Sterling appreciated by 1.9% against the Euro, resulting in a gross valuation decrease of £6.3 million (before currency hedges). However, the Investment Manager closely monitors currency exposure and uses hedges to mitigate short-term cash flow volatility. After accounting for currency hedges at the Company level, the net foreign exchange impact was reduced to -£1.5 million.

The combined impact of inflation and foreign exchange movements was a valuation decrease of £2.3 million or 0.41 pence per Ordinary Share.

Dividend²

The interim dividend (1.51 pence per Ordinary Share or £8.5 million) in respect of Q2 2024 was paid during the quarter, in line with the Company's stated dividend target for the financial year from 1 January 2024 to 31 December 2024 of 6.02 pence per Ordinary Share.

Share Buybacks

In Q2 2024, the Company announced that it had initiated a share buyback programme, with an initial tranche of up to £10 million. During Q3 2024, 2,211,540 shares were repurchased by the Company for c.£1.7 million at an average price of 75.78 pence per Ordinary Share. Following these transactions, the total number of voting rights in the Company stood at 561,515,034. This figure has been used as the denominator in the final NAV per Ordinary Share figure as at 30 September, resulting in a NAV per share uplift. The acquisition of shares at a discount to NAV has contributed to a net increase in NAV per Ordinary Share of 0.11 pence during Q3, with a total increase of 0.18 pence since the start of the programme.

Other movements

An increase of £2.3 million or 0.41 pence per Ordinary Share was recorded from other valuation movements. Of this movement, the majority reflects an uplift of £12.5 million related to the expected return on the assets, being the net present value of future cashflows being brought forward from 30 June 2024 to 30 September 2024. This was partially offset by performance of the portfolio during Q3 2024 being below budget, a refresh of future Capex and Opex assumptions for some sites, and fund level costs, which mostly reflects the Company's operating and transaction costs including RCF interest.

Gearing

As at 30 September 2024, ORIT had total gearing (total debt drawn as a % of Gross Asset Value ("GAV"³)) of 43.2%. The significant reduction in gearing since 30 June 2024 (46.0%) is primarily due to the proceeds of the Ljungbyholm sale being directed to reducing the RCF level debt, partially offset by a small drawdown made in preparation for the completion of the fifth Irish solar site (which occurred post-period).

Notes

1              The unaudited 30 September 2024 valuation includes (i) recent consensus UK inflation forecasts published by HM Treasury in August 2024; and (ii) inflation forecasts for the relevant European countries published by the European Commission in August 2024.

2              The dividend target stated in this announcement is a target only and not a profit forecast. There can be no assurance that this target will be met, or that the Company will make any distributions at all and it should not be taken as an indication of the Company's expected future results. The Company's actual returns will depend upon a number of factors, including but not limited to the Company's net income and level of ongoing charges. Accordingly, potential investors should not place any reliance on this target and should decide for themselves whether or not the target dividend is reasonable or achievable. Investors should note that references in this announcement to "dividends" and "distributions" are intended to cover both dividend income and income which is designated as an interest distribution for UK tax purposes and therefore subject to the interest streaming regime applicable to investment trusts.

3              "Gross Asset Value" means the aggregate of (i) the fair value of the Company's underlying investments (whether or not subsidiaries), valued on an unlevered basis, (ii) the relevant assets and liabilities of the Company (including cash) valued at fair value (other than third party borrowings) to the extent not included in (i) or (ii) above.

Factsheet

The Company's Q3 2024 factsheet has been published today and is available to download at:

https://www.octopusrenewablesinfrastructure.com/all-reports-publications

For further information please contact:

Notes to editors

About Octopus Renewables Infrastructure Trust

Octopus Renewables Infrastructure Trust ("ORIT") is a London-listed, closed-ended investment company incorporated in England and Wales focused on providing investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of renewable energy assets in Europe and Australia. As an impact fund, ORIT is helping accelerate the transition to net zero by investing in green energy, whilst also contributing to a broader set of UN Sustainable Development Goals through its impact initiatives. ORIT's investment manager is Octopus Energy Generation.  

Further details can be found at www.octopusrenewablesinfrastructure.com 

About Octopus Energy Generation

Octopus Energy Generation is driving the renewable energy agenda by building green power for the future. Its specialist renewable energy fund management team invests in renewable energy assets and broader projects helping the energy transition, across operational, construction and development stages. The team was set up in 2010 based on the belief that investors can play a vital role in accelerating the shift to a future powered by renewable energy. It has a 13-year track record with approximately £6.7 billion of assets under management (AUM) (as of 30 June 2024) across 20 countries and total 4.2GW. These renewable projects generate enough green energy to power 2.6 million homes every year, the equivalent of taking over 1.4 million petrol cars off the road. Octopus Energy Generation is the trading name of Octopus Renewables Limited.

Further details can be found at www.octopusenergygeneration.com