LONDON - SDCL Energy Efficiency Income Trust (SEIT) has announced its interim financial results for the period ending September 30, 2024, revealing a stable net asset value (NAV) and an increase in dividends compared to the same period last year. The NAV remained almost unchanged at 90.6p, a slight increase from 90.5p as of March 31, 2024. Dividends rose to 3.16p from 3.12p year-over-year, and SEIT reported a profit before tax of £35 million, a significant turnaround from the £89 million loss reported during the equivalent period in 2023.
SEIT's portfolio valuation stood at £1,103 million, down from £1,117 million as of March 31, 2023, with the decrease primarily attributed to the sale of UU Solar for £90 million in May 2024. The trust's gearing was reported at 35% loan-to-value (LTV), with 11% at the fund level through its revolving credit facility (RCF) and 24% at the project level. The average interest rate was noted at 5.6%, with an average remaining life of 4.1 years.
The trust is currently yielding approximately 11% at its current share price, with first-half dividends covered 1.1 times by cash. The board reaffirmed its dividend guidance for the fiscal year ending March 31, 2025, at 6.32p, up from 6.24p in 2024.
In addressing the discount to NAV, which stood at around 30% at the half-year end and is currently about 36%, SEIT's board and management outlined a strategy in their final results for the year ending March 31, 2024. The strategy focuses on disposals, NAV return, capital allocation, and reducing short-term borrowings.
In the broader context, the Morningstar Renewable Energy Infrastructure peer group, which includes SEIT, experienced significant discount widening due to investor concerns following the US election and the anticipated policy approach of the new administration towards renewable energy. However, SEIT's business model, which largely operates without reliance on subsidies and has a majority of its revenues contracted with limited exposure to power prices, differentiates it from its peers.
The information contained in this article is based on a press release statement from SDCL Energy Efficiency Income Trust.
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