LON:ORIT Octopus Renewables Infrastructure Trust H2 2024 Earnings Report GBX 67.57 +0.57 (+0.85%) As of 04:56 AM Eastern Earnings History Octopus Renewables Infrastructure Trust EPS ResultsActual EPSGBX 6.55Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AOctopus Renewables Infrastructure Trust Revenue ResultsActual RevenueN/AExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AOctopus Renewables Infrastructure Trust Announcement DetailsQuarterH2 2024Date3/27/2025TimeBefore Market OpensConference Call DateThursday, March 27, 2025Conference Call Time9:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Octopus Renewables Infrastructure Trust H2 2024 Earnings Call TranscriptProvided by QuartrMarch 27, 2025 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Octopus Renewables Infrastructure Trust PLC investor presentation. Speaker 100:00:04Throughout the Operator00:00:04quarter presentation, investors will be in listen only mode. To do so. Before we begin, I'd like to submit the following poll. I'd now like to hand it over to Chris Gayden. Good afternoon Speaker 100:00:28to you, sir. Speaker 200:00:30Thank you and good afternoon to, and thank you for joining this presentation. My name is Chris Skadden and today I'm joined by my colleagues David Bird, Jen Leg, and we'll be presenting the annual results for the Optimist Renewables Infrastructure Trust for 2024. So we thought we'd start by reminding you of Orenk's key differentiators and in particular, the diversification that we've built into the portfolio. Orenk is the only genuinely diversified investment trust of meaningful scale in the renewables and energy transition space. And we think diversification is particularly important because it offers some protection against concentrations of risks to things like grids, weather patterns, and increasingly important is local regulatory regimes. Speaker 200:01:25But diversification isn't our only differentiator. We're also part of Octopus Energy Generation, which provides a or which is one of the largest renewable energy specialist investors. We have over 150 professionals in the team. Many of us are drawn from industry and have experience building wind and solar farms across the globe. Our mandate also has the opportunity to earn some additional upside through the construction and development allocation that we have. Speaker 200:02:00And in particular, that development allocation gives us optionality on the pipeline of projects that they are developing. We'll be able to invest into those once they become once they get to a ready to build stage. And then finally is impact. We consider that Octopus Renewables Infrastructure Trust is an impact fund. We do lots and lots of work with local communities, and that's on top of the clean energy that we produce and which goes to supporting the fight against climate change. Speaker 200:02:35Now this year, 2024 represents, Ourat's fifth year anniversary. And when it comes to our mandate, we've delivered exactly what we said we would do. We have been selling some assets, but during the five years of Octopus, sorry, of Orit's, existence, We've invested into 45 assets across eight different countries and five technologies. We have delivered total return of 31.9% and returned 128,200,000 to shareholders. We've also delivered impact. Speaker 200:03:13I mentioned, the clean electricity that we've produced, but we also do a lot with local communities. So things like just transition and retraining, mental health charities, planting forests into urban areas, and also rewilding and environmental initiatives. So some of the things that we're involved with. Now we, as a manager, fully appreciate that equity markets are incredibly difficult at this point in time and that it's not easy, for investors. But we do think that ORIT continues to have a highly relevant mandate and we think it's one that will be of increasing relevance in the months and years ahead. Speaker 200:03:59So I'll just touch on some of the key financial highlights from the year. So our generation has increased to twelve forty gigawatts as the remainder of the Ballamarkarney Solar Complex just North of Dublin and the Breach, solar farm were brought online. It's also 2024 is also the third year in a row that we've been able to increase the dividend in line with inflation. And we were able to deliver dividend cover of 1.24 times and that's calculated on operating cash flows after debt repayments. Now if we were to calculate that same number before debt repayments, the dividend cover would be 1.85. Speaker 200:04:46And then we've also delivered a positive NAV return of 2.5% during the period. Now 2024 has seen improvements and increases across a large number of our metrics. So with the addition of the Ballama Kearney solar project in Ireland and Breach Solar Farm, our number of assets, total megawatts in generation have all increased during the year. We've also been busy putting in place fixed price offtake arrangements and that has led to an increase in the percentage of fixed revenues over the next two years. And as a result of all this, we've seen increases in both revenue and EBITDA. Speaker 200:05:32I've already mentioned our dividend performance. Looking ahead for 2025, we have again sought to increase the dividend by CPI. And finally, on leverage, so our leverage number has increased from last year as a result of that acquisition of the Irish solar complex. However, as we've recently put out in a recent RNS, we are looking to bring that number down below 40% by the end of this year. Now with that, I'll hand over to David. Speaker 100:06:10Thanks, Chris, and good afternoon, everybody. I wanted to walk through a bit more detail around the approach that we've taken during the year to capital allocation and indeed our priorities as we move into 2025. And the real key thing here is the discipline that we have shown in that capital allocation. In particular, if you work through this slide starting at the top left, you can see the operational cash flows that have been generated by the portfolio of £62,300,000 And that was enough to cover the dividends 1.85 times before the deduction of scheduled principal repayments on the debt in the portfolio. We've also been able to successfully realize cash from the sale of assets, which I'll go into in a bit more detail later, and we've realized just over £60,000,000 there from selling our Swedish wind farm, Lunebyon. Speaker 100:07:13We did have existing commitments to meet during the year in relation to the Eris solar portfolio, and those were funded by a combination of some debt that we put in place with those assets, along with RCF drawdowns during the year of £87,000,000 Together with cash reserves within the broader group, those are the sources of capital that we've used during the year. And as you move across to the right, you can see that we have delivered through a combination of the fully covered on target dividend and the share buybacks that were initiated around the middle of the year, a total return to shareholders of over £40,000,000 As well as the scheduled principal repayments on the long term debt, the sale of the Swedish site allowed us to repay the majority of the RCF drawdowns that we'd made during the year. So total debt repayments of £86,000,000 And then you can see at the bottom in gray the new investment that we've made during the year, most of which related to that Irish solar portfolio, but we've also had some final construction payments on the brief solar farm, for example, and some payments into our existing portfolio of developers, as well as some new investments again, which I'll cover later. Speaker 100:08:35Looking ahead then into our priorities for 2025, we have committed to increase the level of cash returned to shareholders, partly through the increased dividend target of 6.17p per share, but also through an increase of £20,000,000 to the initial £10,000,000 buyback program, so a total buyback program now of £30,000,000 We will also continue to focus on reducing gearing in the company. So we've targeted, reducing gearing within the entire group to less than 40% of gross asset value within calendar year 2025. But as well as bringing the total headline number down, we've already been active on reducing the cost of the borrowing within ORIT. Since year end, we signed a hundred million pound 5 year term loan facility secured against the highly contracted assets that we have in The UK, which had no debt on them previously. And that's delivered a material saving on interest cost compared with the RCF that we've repaid using those proceeds. Speaker 100:09:47When we look at that resolve revolving credit facility, its maturity date had been February 2026. We have recently extended that until the middle of twenty twenty eight, as well as reducing the overall size of the facility to a hundred and £50,000,000 and that reduction in commitment fees should save our at around £850,000 per year. In terms of new investment, all else being equal, we would expect less in f y twenty twenty five, and we will be focusing on areas where we think the higher highest of returns should be available in order to compete with other capital allocation priorities, principally the buybacks and the reduction of gearing. And you can see examples of that already during the year where we have made follow on commitments to support some of our existing developer investments in particular, BLC and Nordic generation. So if I go into a bit more detail around the investments that we have made during 2024 and the first quarter of twenty twenty five. Speaker 100:10:55We've already touched on the Irish solar acquisition, which was by far the largest use of capital during 2024. We bought that site on a forward purchase arrangement, which means we were committed to make the acquisition once the sites were operational and those commitments were already made back in 2022 and 2023. So what we spent in 2024 was really following through on commitments we had made sometime before. And with that acquisition, we now have two forty one megawatts of operating solar capacity in Ireland across five sites, and they represent the largest operating solar complex in Ireland at the moment. The other investment that we made in 2024 was a follow on investment into Simply Blue Group, which is a developer of floating offshore wind and sustainable fuels headquartered in Ireland. Speaker 100:11:52And we provided a €7,000,000 investment in the most recent funding round in the summer of twenty twenty four to support that business as it continues to develop its projects and seek longer term significant strategic funding that will be needed to take these very large projects through the development cycle over the next few years. I've mentioned that since the end of the period, we've made two investments into developers. The first of these was into Nordic Generation, who are developing onshore wind and solar projects in Finland. We increased our commitment to that business, which has seen really strong progress on its pipeline to enable them to bring new projects into the pipeline and keep taking the existing projects through into the ready to build stage, some of which we would hope to come through over the next twelve to eighteen months. And finally, BLC, which is a developer of onshore, sorry, a developer of solar projects and batteries in The UK. Speaker 100:12:56Again, they have brought a pipeline of projects through to the stage where they have land rights and offers to connect to the grid and the additional £1,500,000 we've allocated to them will allow them to really accelerate the most far developed projects through and ensure that they can get through the planning process in order to get the most favorable grid connection dates. I want to spend a bit of time now going into a bit more detail about the large asset sale that we carried out during the year. This was the sale of the Lundbjorn wind farm in Sweden, which completed in the second half of the year, realizing proceeds of €74,000,000, which was a €1,700,000 uplift to the holding valuation at the time the sale was agreed. And this project really is a classic example of what we set out to do when Orit was launched just over five years ago. It was actually the first investment that we ever made back in March of twenty twenty. Speaker 100:14:03And at that time with the uncertainty of COVID looming, we were able to utilize our expertise and get really strong protections into the construction contracts around what might happen and how we'd be protected if there were delays because of COVID. As it happened, actually, we were able to deliver this project on time and on budget, not withstanding various issues with supply chain and with construction crews being stuck in quarantine. Again, utilizing that large team of industry specialists with strong connections throughout industry to unblock things when they arose. So with the project having been delivered on time and on budget in the middle of twenty twenty one, we continue to be very active through the operational stage, putting a ten year corporate PPA power purchase agreement in place on the project to provide a level of revenue certainty in a period of very volatile power prices. So as well as the strong operational performance of the site, that enabled us to deliver a successful exit in 2024. Speaker 100:15:10And over the four and a bit year hold period, we delivered a return of 11.3% to investors. And if you look at that together with some of the asset sales that we completed in 2023, we have now realized proceeds of a hundred and 61,000,000 from our capital recycling activities, all of which were delivered at an uplift to holding values, giving an aggregate NAV uplift of 3.2p per share. But we haven't stopped there. We have committed to continue to actively recycle capital within the portfolio and targeting at least £80,000,000 of sales proceeds during calendar year 2025 to support those priorities of returning cash to shareholders and bringing gearing down below 40%. As well as the new investments and the sale of assets, we've also been very active in managing the individual assets that are retained within the portfolio. Speaker 100:16:14And a highlight here has been on the revenue management side of things and the new contract that we put into place on the Cross Dykes Wind farm, which is a 46 megawatt wind farm in Scotland that Orret owns 51% of. This new contract, which is with Sky Media Group fixes the power prices for most of the generation from that project for ten years. And critically, it also retains the benefit of inflation linkage during that period. This is just one of a number of corporate sales agreements that we have entered into for Orit's portfolio. Another notable one of these is the contracts for all five of the Irish solar sites, which each have a fifteen year fixed price agreement with Microsoft. Speaker 100:17:04And those contracts together with some other hedging activity means that we have a very high degree of fixed revenues. 84% of the power sales are fixed price for the next two years. So I'm now going to hand back over to Chris to give some more detail on the portfolio. Speaker 200:17:24Great. Thank you, David. So here we have our portfolio map. And you can see that, although we have sold our Polish and Swedish wind farms, we still have a highly diversified portfolio. And we're confident that we'll be able to maintain that strong diversification as we continue to recycle assets. Speaker 200:17:49In our annual report this year for the first time, we've provided some quantitative analysis on the benefits of, of diversification. And we show that, having that diversification leads to a 40% improvement in downside uncertainty compared to as if or it was a single country, single technology fund. And now looking at that diversification in numbers. So, the portfolio is spread across five different countries. We continue to have an even balance between solar and on and offshore wind. Speaker 200:18:30And after all the construction activities that have taken place over the years, the portfolio is now almost entirely operational, really except for the developer allocation. And now looking at some operational highlights for the year. So once again, we've seen year on year growth in the portfolio, and in particular with the addition of the Ballina Kearney solar project in Ireland, and also the Breach solar farm in the in The UK, That has led to strong increases in solar capacity, and increases in revenue and EBITDA for the portfolio as a whole. The onshore wind, we've seen some reductions as a result of the sale of the Polish and Swedish assets. And you can also see that there's been a below budget performance, in general related to both lower than forecast wind and, Iranians and also some construction teething issues. Speaker 200:19:39So to dive into that budget performance a bit more here, you can see the impact of lower radiance and lower wind across those technologies. In terms of the site specific issues, most of these are now resolved. So for example, we've got very strong availability. Now that the come ahead wind farm is up and operating, we've been able to fully repanel and re energize the Sanon to Nindavar project in France. We've had some issues with some, main bearings on the wind turbines at our two Finnish wind farms. Speaker 200:20:22And the good news is, is that the first of those wind farms has had all the main bearings replaced and is fully operational. And the second one is, going through that replacement program now. The cost of that are budgeted and in any case, it's the turbine manufacturer who is taking the responsibility to do those repairs. And this chart really just shows the positive trajectory that we've seen in terms of our portfolio over the five years, of its existence and serves to show how far we've come during that period. And finally for me, just a few words to say on impact. Speaker 200:21:12We continue to consider that or it is an impact fund. We produce enough we produced enough power in 2024 to power the equipment of 284,000 homes or displace almost 300,000 tonnes of carbon during the period. We do lots and lots of community benefit and engagement activities, including planting urban forests and working with charities that help people retrain into the green economy and also mental health charities. Now with that, I'm going to hand over to Jen. Speaker 300:21:58Thanks, Chris, and good afternoon all. So I'll start by talking about the dividend performance. So in 2024, Auric delivered a fully covered dividend of 6.02p per share, which was in line with the target set out at the start of the year. This target represented a 4% uplift on prior year and said tracking against inflation for the third consecutive year. In terms of coverage, the dividend was comfortably covered by 1.24 times by operational cash flows. Speaker 300:22:31And if you exclude the principal debt repayment, coverage rose to 1.85 times. And as mentioned earlier, we've already announced a further increase for February in line with 2024 CPI, bringing the dividend to 6.17p per share. This next slide shows all its consistent track record of growing dividends. FY '25 will mark the fifth increase with the last four all in line with inflation. And once again, we expect the FY 2025 dividend to be fully covered by operational cash flows consistent with all previous years and that will offer an attractive yield of around 9.1% based on the December closing share price. Speaker 300:23:22Now moving away from dividends to the broader financials, at the year end, NAV stood at £570,000,000 or a hundred and 6 to a hundred and 2.6p per share. That's down slightly versus prior year, but the company still delivered a positive NAV return in the year of February. After including the debt at the SPV level and through the RCF, gross asset value sits at around £1,000,000,000 Now that brings Gav back to where we brought the year at the beginning of the 2024 reporting period following the sale of the Swedish wind asset and the acquisition of the Irish solar portfolio. Share price performance continues to be a challenge across the whole sector and all of its total shareholder return was minus 18.3% for the year. And whilst that discount analysis persists, the strong prices achieved through our capital recycling program highlight the robustness of the company's valuations, reinforcing that the share price doesn't reflect the fair value of the underlying assets. Speaker 300:24:34On debts, gearing increased from 39% to 45%. Again, that's mainly due to the acquisition of the Irish solar assets, our share buyback activity offset by the Swedish wind disposal. Our long term portfolio debt remains low cost and well protected as attached at around 90%. So this means that even with base rates at elevated levels, our average cost of debt was 2.74% when including the RCF borrowings. As already mentioned, post year end, GBP 100,000,000 of relatively expensive RCF borrowings have been refinanced into a fully hedged lower cost facility. Speaker 300:25:19And this brings the overall borrowing costs down to around 3.7%. It's also worth recalling that earlier in 2024, our gearing was expected to exceed 50% once commitments were fulfilled. However, now that we've met those significant commitments, gearing has been brought back down to 45%, which puts Ourott in a much stronger position going forward. Whilst we're confident the level of fixed revenue support leverage at these levels, we're committed to bringing debt down for around 40% of GAAP during 2025. And now looking at the valuation bridge in a little bit more detail, over the year, NAV Pasha fell by 3.4p from 106p to 102.6p. Speaker 300:26:13And aside from the expected deductions from dividends and costs at the fund level, which you can see on the right hand side of the bridge, the main valuation drivers were first, a small gain related to the sale of the Lund Beyond wind farm resulting in a NAV an uplift of £900,000 from unwinding the construction premium as the breached solar farm entered operations. Thirdly, a positive impact from the new PPA signed at the Cross Ice wind farm. And then beyond these, other movements which mostly sit in the balance of portfolio return column on this slide largely reflects the expected return on the portfolio over the period. A review of our development portfolio valuations, adjustments to short term cost assumptions and valuations and actual performance across the assets. So together, these factors, along with broader macroeconomic and price updates, which I'll cover over the next few slides, explain the overall movement in NAV in the year. Speaker 300:27:23Inflation assumptions remain relatively stable during the year, resulting in a net impact on valuations of £1,000,000 and our long term inflation assumptions remain at 2.25% for The UK and 2% for all other European markets. On FX, sterling strengthened against the euro in the period resulting in a gross £17.1 million pounds negative valuation impact. However, the company's FX strategy went effectively, delivering a £14,600,000 gain that effectively offset that FX impact. During the period, merchant power price forecast decreased slightly resulting in a small negative impact of around £1,000,000 That said, O'Rourke is well insulated from this due to its highly fixed revenue base with fixed revenues over a two year period increasing from 81% to 84%. The average price achieved across all revenue streams also improved with the shift being mainly driven by the sale of the wool niche and exposed Swedish asset and acquisition of the Irish, solar farms, which benefit from an attractively priced PPA. Speaker 300:28:44So despite a decline in mentioned prices or its overall generated generation weighted price actually increased. And then lastly, on green certificate pricing, which covers WIGOs in The UK and guarantees of origin in Europe, these remain broadly stable with a slight uptick and capacity market forecast declined slightly. Lastly, on discount rates, there were no changes to the core discount rates applied to the portfolio asset valuations during the year. However, the weighted average discount rate fell from 7.2% to 7%. That decrease reflects lower overall risk in portfolio primarily due to two factors. Speaker 300:29:27Firstly, the removal of construction risk premium from assets that were in construction are now operational. And secondly, the higher fixed revenues, which overall carry a lower risk and therefore attract a lower discount rate. It's worth noting that this average discount rate only applies to operational assets where a DCF is used as a valuation approach. It therefore excludes the return of benefit from FX hedging at the company level, the higher returns used from, the higher returns expected from developer investments and the return improvement, which should be expected from additional leverage at the RCF level. So taking those additional three things into account, the expected return across the portfolio before PLC costs is 8.1%. Speaker 300:30:19And with that, I'll hand back to David. Speaker 100:30:24Thank you, Jen. So now I wanted to switch focus to look ahead at what we can see coming up. Got a couple of slides here giving a bit more detail around the revenue landscape. We talked a couple of times throughout the presentation about the high level of fixed prices and contracting that we have over the next two years and how that's increased from 81% to 84% during calendar year 2024. But what you can see from this chart is that that highly contracted revenue stack really continues out for the foreseeable future. Speaker 100:30:58We have more than 70% of our revenues fixed price in nature, whether through government support schemes or fixed price power cells to corporates and utilities, right out until the early 2030s, we've got that over 70% level. And even going out into the early 2040s, we already have some revenues which are fixed price in nature because of the nature of our mandate and the fact that we have built new projects which benefit from new twenty year government support schemes in France and Germany, for example. We've also got a strong track record of adding new fixed revenues to our portfolio. So we're confident that we'll be able to keep increasing the level of fixed revenues that we have good visibility on out into later in the 2030s by putting new corporate PPAs on a on a rolling basis as we move forward. And as well as that high level of fixed revenues, we also have a high level of explicit contractual inflation linkage within our sales arrangements. Speaker 100:32:02So almost half of the revenues are inflation linked over the next ten years. And that's something that's been really powerful when we've come to set the dividend increase with the board each year and has allowed the board to increase dividends in line with inflation for four years in a row. Looking at the bigger picture now in the sector, looking at the listed renewable energy sector, it's clear that share prices are not where we would want them to be and that share price performance right across the industry has been disappointing. But that does not reflect the fundamentals of the renewable energy industry more broadly, where we continue to see a huge market opportunity and one where ORIT's mandate and our focus on delivering new projects and on, having a broad geographical mandate means that we can be nimble and find the most attractive markets, the most attractive opportunities to deliver benefits to investors from those massive tailwinds in the broader renewable industry. It remains the case that governments right across Europe are hugely supportive of the energy transition and recognize that building new wind and solar is a huge benefit, not just for decarbonization, but also for bringing consumer bills down and increasing energy security by reducing reliance on imported fossil fuels. Speaker 100:33:31We've also demonstrated now a track record of growing generation and with it portfolio revenue and EBITDA year on year. And we've been able to use that operational cash flow to deliver fully covered dividends year on year and keep growing those dividends. And with the shares trading where they are now and the new dividend target, the yield is in the high 9%, which we think represents really attractive level when you consider that inflation linkage that we have within the portfolio and that we're also able to deliver capital growth through that earlier stage investment, in particular, those developer investments, which have attractive pipelines ahead of them, which we can choose to build, if that makes sense from a capital allocation point of view, but equally can sell to realize cash and consider reinvestment into more development or other activities. Overall, therefore, whilst we recognize the deep discount that the shares have been trading at, we are confident that that does not represent the fundamental underlying value of the assets. We have delivered a number of asset sales at an average 12% above net asset value. Speaker 100:34:42All of those asset sales above our holding value. And it's not just us. If you look across the industry, a number of trusts have been selling assets and the overwhelming majority of those asset sales have been above net asset value. So we think that there continues to be value within our portfolio and that where the share price is now, the investors should not see that as a sign that the portfolio is misvalued, rather that the shares are mispricing the value of the portfolio. Operator00:35:28That's great. Thank you very much for the presentation. Ladies and gentlemen, please do continue to submit your questions, and you can do so just by using the Q and A tab that is situated on the top right hand corner of your screen. But just while the company take a few moments to see the questions that have been submitted today, I'd like to remind you that a recording of this presentation, along along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Operator00:35:54Momentarily, I'll just hand over to Charlotte to share the Q and A, and then I'll pick up from the team at the end. Speaker 200:36:20Can I just check everyone can hear me now? Operator00:36:22Yes, we can hear you clearly, Chris. Over to you. Speaker 200:36:24I think that's better. Okay. So I'll start again. So, Robert, thanks. Thanks for your questions. Speaker 200:36:34Now, Spain, like many markets around Europe, has a grid network that was originally built for large centralized generation and struggling to keep up with the proliferation of decentralized renewable generation. Now, that as a result has caused many, many delays for new projects to connect to the grid. In Spain, in particular, the market there, the developer community, it's almost stalled at the moment, waiting for the Spanish government to announce the timing of the next grid option. The UK, on the other hand, we have in recent years received very long dated grid connection dates. However, The UK is making good steps towards rationalizing that grid queue and trying to prioritize high quality projects that are advanced and are in locations where energy is needed. Speaker 200:37:41So we're seeing some good positive developments there. And then there's other markets. Finland is one where we have some development exposure. And there, the Finnish grid operator is very quick in connecting projects. So I think the response is, you know, it's a bit of a mixed bag. Speaker 200:38:00Each market is moving at a different pace. And to your question around has it stymied the lack of sorry, the build, operate and sell business model, for us, we continue to see lots and lots of projects that are ready to build with a reasonable grid connection date. And, so to that in that sense, it hasn't really slowed us down. So, so yeah. So, and then to the second question here. Speaker 200:38:33So how much of our capital has been allocated in research and development enterprises that do not return earnings to our company? So we don't invest into R and D companies in a sort of technological sense. We do have an allocation towards development, that's 5% of gross asset value. We've invested into five different platforms that are bringing on the next generation of wind and solar projects, hydrogen, across our markets. And those projects those development investments typically don't yield much during our ownership. Speaker 200:39:15But when we have successful projects, we're able to sell those and then crystallize a development gain as a result. And that gets reflected in the NAV. For the next couple of questions, I might hand over to David to answer those. Speaker 400:39:32So the next question, David, is, for several quarters, wind generation and irradiation have been overestimated. Is there a case of a step increase in the discount rate to reflect this reality? Operator00:39:44Yeah. Thanks for that question. I Speaker 100:39:46think, actually, 2024 has been relatively unusual in having both wind speeds and solar irradiation below long term expectations. We've seen quite a pattern, not just in the in the sort of previous four years for its existence, but for for years before and where, more often than not, when the wind speeds are below long term averages, actually, it's a sunnier than average year and vice versa so 2024 has been quite unusual year in that regard we have seen some others in the sector updating wind forecasts recently perhaps some with some more mature portfolios including assets that might have been built ten or more years ago and there clearly has been many years of new weather data since then. There have been questions in the sector as to whether climate change is leading to differences in wind speeds, not universally down but just different areas having some lower, some higher. So I think it's valid to be asking about the long term wind generation forecast, that is something that we routinely reassess but usually it only makes sense to do that when you have a project with several years of operational data to carry out that assessment on so rather than thinking about this in terms of discount rate I think we've got a table in the annual report which which shows in a bit more detail how old each of our assets are and when they might make sense to to do a review of the long term generation estimates which could go up as well as down and and certainly as I say we haven't seen any sort of consistency of pattern on on solar being repeatedly below budget but I think it is fair to say that the last three years have been in sort of onshore in The UK in particular, below long term averages which raises a valid question around whether that's a longer term pattern. Speaker 100:41:46We don't see this as being material for ORIT in the round and one important reason is it was actually fleshed out again in the annual report there's a bit of a case study on the benefits of diversification. So we unlike some other vehicles who might be focused on a single technology in a single country, if the weather pattern starts to shift in that country, we're not fully exposed to that and that data analysis that we've summarised in the annual report suggests that in a downside sensitivity, having our broad geographical mandate and having the balance between wind and solar actually reduces that downside scenario by around 40%, so a 40% better outcome in a downside scenario through having our diversification compared with single technology, single country. Speaker 400:42:38Right. Thanks, David. Staying with you on this next question. What percentage of solar and wind electricity production is not subject to PPAs and sold on the spot market? I read that, battery energy storage revenues have surged in December and January helped by low wind generation and cold weather leading to higher UK demand. Speaker 400:42:59Conditions which created multiple instances of price spikes leading to lucrative trading opportunities for stored assets. There are also record levels of dispatch in the balancing mechanism. Is there a case is there a case for a build out of more co located beds to optimize pricing? Speaker 100:43:16So hopefully, some of the slides we have towards the end of the presentation help give a bit of color on the balance between where electricity production is sold on the spot market and and where it's fixed. So over the next couple of years, only 16% of our revenues are exposed to power prices. And even over the next, eight years or so, it's it's really no more than 2530% of revenues over that entire period which are not fixed price in nature when it comes to this idea of co locating batteries that's something that you sometimes they refer to as hybridization, so taking a solar project or a wind project to being one that's a hybrid project, potentially including some battery storage. We already have one site in the portfolio, the Breach Solar Farm, where we have the rights, we have the planning permission, we have the grid connection to be able to add a battery storage asset if we want to. That grid connection becomes fully live in 2029 so we don't need to make that decision right now. Speaker 100:44:21But it is the kind of thing that we are absolutely looking at across our portfolio where could there be opportunities to add value through putting a battery alongside an existing solar or wind farm. There's all sorts of technical complexities with that but it is something that we continue to review across the portfolio in the broader context of the capital allocation considerations that we have to look at in in the share price environment we're in. Speaker 400:44:51Great. Thanks, David. Got a few questions here along the same theme. And this is along the theme of merger or acquisition. Would Auryk consider consolidating with another renewable infrastructure trust to achieve greater scale and reap the associated benefits of scale and costs and diversification? Speaker 400:45:10There's a few other suggestions here. Would you consider being consolidator? Ticker Grid would be a good acquisition given your low exposure to battery, and would you consider another merger with another higher, another player to narrow the discount? Speaker 200:45:26So I think I mean, we we are acutely aware, of of where our share price is trading versus NAV. And there are a lot of, things that we are doing to try and close that gap, whether it be our share buyback program. We're looking at reducing our debt. We're also spending a huge amount of time and increasing the size of our team who are focused on the asset performance. And the other one, which comes up quite often, is this idea of merging with another investment trust. Speaker 200:45:58Now, as some of you may be aware, we have previously made an approach to another trust, which which ended up not proceeding. But it is something that we would consider doing. I think we have a differentiated and unique mandate within the sector, and I think that places us extremely well to potentially be the consolidator in the space. Now, when we look at potential targets, we need to consider all sorts of things. First of all, whether the assets represent good value, whether they contribute to our diversification, ambitions, and generally whether the whether the portfolio would would sort of improve, the portfolio that we already have. Speaker 200:46:57So lots and lots of considerations, and it's something that we continue to talk to our advisers about. Speaker 400:47:05Great. Thanks, Chris. Got a question on discount rates. Your UK discount rate is lower than your pure play solar peers and much lower than your pure play wind peer. How do you justify it? Operator00:47:19Yeah. I might pick that one up. So there's a few things Speaker 100:47:22to note there, and actually, Jen covered a couple of them already. When it comes to making sure that you're comparing like with like on published discount rates, so at the end of twenty twenty four, most of our UK assets had no death on them at all and so when you're comparing with say a pure play solar fund that might quote a rate of around 8% we're not showing the increase in return that comes with that leverage but with the refinancing that we've recently done I think going forward you'll see a bit more of that and you should see that the rates are actually much more comparable than they may first appear. Second thing to note is the discount rate is just one of many assumptions that goes into our valuations and you could get to the same valuation clearly with a higher or lower discount rate if you have lower or higher cash flow assumptions, particularly power price assumptions being a very critical one there and we as manager at Optus Energy Generation manage much more money than just ORIT and a lot of those other products that our colleagues are managing have been actively raising and spending money over the last two years and so we have very good intelligence as to the price at which assets are actually trading on the market and we are therefore very confident that our valuations are not above where the market is trading. Speaker 100:48:51Indeed, even if we just take a more simple benchmark of our valuations on a pounds per megawatt basis compared to a pure play pair, we generally see that for example our solar valuations on a pound per megawatt basis come out lower than the most obvious bid, so I think there's more than just looking at headline discount rates and we then also have those factors that Jen covered for example around our FX hedging and our developer investments that mean really the sort of headline rate that people should be focusing on is more than 8.1% number rather than the seven percent which is not taking into account those real factors that impact on returns. Speaker 400:49:34Great. Next question. Your peers have moved to set their fees as a proportion of market cap or blended market cap in that. Would you consider doing the same? Speaker 200:49:45Okay. I can take this one. So, we've recently, in one of our recent announcements, we've stated that we are in discussions with our board around the fee structure. And I've noted many of our peers having already implemented changes. We will be conducting some shareholder engagement in the very near future on this topic. Speaker 200:50:13And there's little more I can say beyond that at this point. But what I would say is that from the start, Orad has what we've like to call a clean fee structure, which means our headline fee is is the entirety of the fee. We don't have any commercial arrangements with any of the assets within the portfolio. That headline fee pays for all of our fund and asset management services that we provide to the vehicle. So it's, it is it is quite a complex topic actually, when you dig into it, and one that's, as I say, we're continuing to discuss with our board and shortly our shareholders. Speaker 400:50:52Great. Thanks, Chris. Comment here. Thanks for the presentation and performance you have delivered. A couple of questions from this one investor. Speaker 400:51:02Given the share prices are mispriced rather than the assets, why bother with share buybacks? Is it not best to keep the cash flow investment if returns on the assets are promising? Speaker 100:51:12Yes. So this really gets to the heart of why, why you might do a buyback actually and and it's a topic that there's there's lots of different views on on the merits of buybacks. But fundamentally given that we are confident in the valuation of our assets with the share price where it is today we can effectively reinvest in our existing portfolio at 35% cheaper than we could go and buy a similar asset on the market so that's that's why a buyback can make sense and why it delivers NAV per share accretion for the remaining investors Where it could make sense to use that cash for new investments is if those investments are higher returning than our existing average portfolio so that's exactly what we've done with the investments we have made recently particularly the investments into BLC and into Nordic generation and those are development stage investments which we would expect to return significantly higher than the 8% average of the portfolio currently. We really think those do still make sense even with the shares at a different level but that discount and the sort of the mispricing actually is is why Jeff buybacks are an opportunity rather than a reason not to do them. Speaker 400:52:37Great. Follow-up question, not not related though. There's a figure of 24,000,000 for corporate costs mentioned. Can you give us a flavor of what that is? Speaker 100:52:46Yeah. Do you want to pick that up, Dan? Speaker 300:52:47Yeah. And so the bulk of that is RCF costs. So that's all that's there is for RCF, including interest and other fees. It also includes running costs of the fund such as management fees. It also covers kind of general running costs at the corporate companies and the assets that include things like accounting fees, wallet fees, etcetera. Speaker 400:53:14Great. Thanks, Jen. How are you managing issues around the wind blowing excessively and producing surplus power similarly with solar if the sun doesn't shine as expected? Does the battery and other storage feature or does all power get sold to the off takers even if surface delivery their requirements? Speaker 100:53:32So I can put this Operator00:53:32one up. There's something we Speaker 100:53:34had a bit of a feature on this actually in the interim report, which which can give a bit more color. But what what would typically happen in the market if there is more wind than the grid can use is either power prices can become negative or generators can be forced to switch off so the power price going negative is effectively where the power gets sold even if it's surplus to the requirements. Now what we set out in the interim report of six months or so ago is that actually our active approach to contracting and the benefit we have within with a specialist team of market professionals means that we've been much less exposed to that than a generator that didn't have those active arrangements so an example of that is in Finland in 2024 we saw quite a few periods where exactly that happened and the power price went negative but we had entered into a contract where in those periods we would effectively turn the wind farm off but still get paid the fixed price as if we had been generating. Similarly, in some of our Scottish wind farms, when the grid cannot take that electricity but we have a fixed price agreement with the corporate to sell them that electricity, the grid operator will effectively make us whole for having to be turned off because the wires haven't got the capacity to take that path. Speaker 100:55:00So there's a number of different mechanisms for what happens in that situation. What's really important is having the expertise to make sure that the investment is protected and you're not just having to keep turning your wind farm off and receive nothing. Speaker 400:55:15Great. Questions at the time, we've got a couple more questions. I think another group covered, through the other questions. A a quick one on hydrogen. You used this word in terms of development efforts, which worries me. Speaker 400:55:29I've seen many projects projects rightly getting canceled because it's too expensive slash risky. Any comment on this? Speaker 200:55:37Yep. I can take that one. So thanks for the question, James. And maybe just to just to provide a small bit of context. So first of all, our allocation towards developers is only 5% of gross asset value. Speaker 200:55:54And our allocation to our Hadrian platform is a small subset of that. So you're quite right in saying it is expensive and risky, but we only have limited exposure to it. The other thing that we have done to manage that risk is just focus on UK projects which benefit from the UK government subsidy regime, and ones where there is a clear use case. I think many of the projects that you see cancelled tend to be very large projects, which are sort of designed perhaps without knowing exactly where the customer is or how you're going to get the hydrogen there, whereas the projects we're building can be piped straight into their final use case. So we've targeted what we think are the less risky ones. Speaker 200:56:48We've already got our first planning consent. We're currently running a sales process for that project. And we are sort of having a good old think about what we're going to do next on hydrogen. It is a nascent sector, and one which I'm sure will go through many iterations before it becomes mature. Speaker 400:57:10Great. Thanks, Chris. Time for something. Two more questions. The NAV seems to be static or slowly declining, and the discount or share price to NAV has been growing in recent years. Speaker 400:57:20Do you have any comments on that? And is anything being done to address these issues? Speaker 100:57:26Yes. I think if you if I start with the NAV, it's true that the NAVs declined, in the year and and the same is true in the prior year. We still delivered a positive NAV total return, but a significant component of that total return has been in the form of dividends paid out of the company. And if you look at the valuation bridge that Jen talked to earlier, I think what effectively you're seeing there is that the return on the portfolio of assets just haven't quite kept up with the total of the dividends we've paid out and the running costs of the company and within that £24,000,000 figure that we had a question on earlier as Jen said, a majority of that around, 13 or 14,000,000 of that number was the RCF costs that were paid during 2024, which is why we're so pleased to have entered into that new hundred million pound loan, which significantly reduces the interest costs. It's around a 1.3% day one interest cost reduction on that facility. Speaker 100:58:28So, we've also, you know, committed to bring down the the level of borrowing that we have. So we're taking action to trim back those running costs that have been slightly dragging on the lab over the last year or two. And we still have assets within the portfolio, particularly some of those growth assets that we see can continue to support NAV growth even as we continue to pay dividends out of the company. Then on the share price side of things, I think we've touched on this a bit both in the presentation and in the questions. We don't think the share price reflects the value of the assets at all, but it's clearly not something that we can or have been ignoring. Speaker 100:59:14So that discount was certainly behind the launch of the share buyback program and the subsequent increase earlier this year but but clearly something needs to change in the sector. There's effectively more sellers than buyers, a bit of a supply demand mismatch in the sector and again perhaps that goes to some of the the questions we had previously around consolidations so we're we're being very active with talking to our investors as much as possible we're always happy to hear views and and and answer questions on this we're we're certainly not sort of sat here thinking there's nothing we can do about the share price particularly we're we're not in control of it So we'll continue to be very disciplined in our capital allocation prioritizing the buybacks and the debt reduction and just keep talking to investors to understand their views and how we can help close that gap effectively between the NAV and the share price. Speaker 401:00:09Thanks, David. Questions we're at time. We might have time to squeeze in. It's very last question. I think we touched on it, but if it's any other views, do you have a view on whether it is incrementally more profitable to invest in an additional megawatt of wind capacity versus solar capacity? Speaker 401:00:24Appreciate it might change by geography and other factors, but I'm wondering why you're proportionately higher on solar and less on wind. Speaker 201:00:30Yeah. Thanks for the question. So, yeah, just to the from a strategic level, we are aiming to maintain a fairly even split between wind, whether it's on or offshore, and solar. The reason why we're slightly higher on solar at the moment is because of the recent sales of the wind farms that we've made. And in terms of whether that sort of additional megawatt is more profitable if it's wind or solar, it really sort of depends on your appetite for risk. Speaker 201:01:04Wind farms tend to attract higher discount rates because their generation profile is more volatile and because they are mechanical devices that can break down now and then. Whereas, solar solar projects are more reliable, but they all produce power at the same time, and that brings with it other risks. We look at each project on its own merits, the market it's in, the stage of development, and make our decisions on that. So thanks for the question. Speaker 401:01:36Great. That closes out the questions. So Alessandro, over to you. Operator01:01:39Okay. Thanks for all the questions from investors. The company can review the questions submitted today and we will publish those responses out on the Investor Meet company platform. Just before redirecting investors, try to get their feedback, to you. David, could I just ask you for a few closing comments? Speaker 101:01:56Yes. So we'd just like to thank everyone for their time and for the excellent questions we've had. I hope it's been a helpful presentation. We remain very positive about the sector and for the potential that this company has, but clearly the share price environment is not great and so any feedback is always very welcome. We, I think, have on the presentation our email address if you need to get in touch. Speaker 101:02:22But, yeah, just want to say thanks again to everyone for joining and have a good rest of the day. Thank you very much. Operator01:02:29Perfect. Thank you once again for updating today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of Octopus Renewables Infrastructure Trust PLC, We'd like to thank you for attending today's presentation and good afternoon.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallOctopus Renewables Infrastructure Trust H2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckReport Octopus Renewables Infrastructure Trust Earnings HeadlinesOctopus Renewables Infrastructure Trust (LON:ORIT) Has Announced That It Will Be Increasing Its Dividend To £0.0151February 4, 2025 | finance.yahoo.comOctopus Renewables announces dividend increase for FY 2025January 31, 2025 | msn.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. April 25, 2025 | Golden Portfolio (Ad)Octopus Renewables Expands Share Buyback ProgramJanuary 24, 2025 | tipranks.comKepler Trust Intelligence highlights ORIT's valueJanuary 17, 2025 | msn.comFancy a 13.9% dividend yield? Consider these dirt-cheap investment trusts!December 23, 2024 | msn.comSee More Octopus Renewables Infrastructure Trust Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Octopus Renewables Infrastructure Trust? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Octopus Renewables Infrastructure Trust and other key companies, straight to your email. Email Address About Octopus Renewables Infrastructure TrustOctopus Renewables Infrastructure Trust (LON:ORIT) (“ORIT”) is an Impact Fund helping accelerate the transition to net zero. 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There are 5 speakers on the call. Operator00:00:00Octopus Renewables Infrastructure Trust PLC investor presentation. Speaker 100:00:04Throughout the Operator00:00:04quarter presentation, investors will be in listen only mode. To do so. Before we begin, I'd like to submit the following poll. I'd now like to hand it over to Chris Gayden. Good afternoon Speaker 100:00:28to you, sir. Speaker 200:00:30Thank you and good afternoon to, and thank you for joining this presentation. My name is Chris Skadden and today I'm joined by my colleagues David Bird, Jen Leg, and we'll be presenting the annual results for the Optimist Renewables Infrastructure Trust for 2024. So we thought we'd start by reminding you of Orenk's key differentiators and in particular, the diversification that we've built into the portfolio. Orenk is the only genuinely diversified investment trust of meaningful scale in the renewables and energy transition space. And we think diversification is particularly important because it offers some protection against concentrations of risks to things like grids, weather patterns, and increasingly important is local regulatory regimes. Speaker 200:01:25But diversification isn't our only differentiator. We're also part of Octopus Energy Generation, which provides a or which is one of the largest renewable energy specialist investors. We have over 150 professionals in the team. Many of us are drawn from industry and have experience building wind and solar farms across the globe. Our mandate also has the opportunity to earn some additional upside through the construction and development allocation that we have. Speaker 200:02:00And in particular, that development allocation gives us optionality on the pipeline of projects that they are developing. We'll be able to invest into those once they become once they get to a ready to build stage. And then finally is impact. We consider that Octopus Renewables Infrastructure Trust is an impact fund. We do lots and lots of work with local communities, and that's on top of the clean energy that we produce and which goes to supporting the fight against climate change. Speaker 200:02:35Now this year, 2024 represents, Ourat's fifth year anniversary. And when it comes to our mandate, we've delivered exactly what we said we would do. We have been selling some assets, but during the five years of Octopus, sorry, of Orit's, existence, We've invested into 45 assets across eight different countries and five technologies. We have delivered total return of 31.9% and returned 128,200,000 to shareholders. We've also delivered impact. Speaker 200:03:13I mentioned, the clean electricity that we've produced, but we also do a lot with local communities. So things like just transition and retraining, mental health charities, planting forests into urban areas, and also rewilding and environmental initiatives. So some of the things that we're involved with. Now we, as a manager, fully appreciate that equity markets are incredibly difficult at this point in time and that it's not easy, for investors. But we do think that ORIT continues to have a highly relevant mandate and we think it's one that will be of increasing relevance in the months and years ahead. Speaker 200:03:59So I'll just touch on some of the key financial highlights from the year. So our generation has increased to twelve forty gigawatts as the remainder of the Ballamarkarney Solar Complex just North of Dublin and the Breach, solar farm were brought online. It's also 2024 is also the third year in a row that we've been able to increase the dividend in line with inflation. And we were able to deliver dividend cover of 1.24 times and that's calculated on operating cash flows after debt repayments. Now if we were to calculate that same number before debt repayments, the dividend cover would be 1.85. Speaker 200:04:46And then we've also delivered a positive NAV return of 2.5% during the period. Now 2024 has seen improvements and increases across a large number of our metrics. So with the addition of the Ballama Kearney solar project in Ireland and Breach Solar Farm, our number of assets, total megawatts in generation have all increased during the year. We've also been busy putting in place fixed price offtake arrangements and that has led to an increase in the percentage of fixed revenues over the next two years. And as a result of all this, we've seen increases in both revenue and EBITDA. Speaker 200:05:32I've already mentioned our dividend performance. Looking ahead for 2025, we have again sought to increase the dividend by CPI. And finally, on leverage, so our leverage number has increased from last year as a result of that acquisition of the Irish solar complex. However, as we've recently put out in a recent RNS, we are looking to bring that number down below 40% by the end of this year. Now with that, I'll hand over to David. Speaker 100:06:10Thanks, Chris, and good afternoon, everybody. I wanted to walk through a bit more detail around the approach that we've taken during the year to capital allocation and indeed our priorities as we move into 2025. And the real key thing here is the discipline that we have shown in that capital allocation. In particular, if you work through this slide starting at the top left, you can see the operational cash flows that have been generated by the portfolio of £62,300,000 And that was enough to cover the dividends 1.85 times before the deduction of scheduled principal repayments on the debt in the portfolio. We've also been able to successfully realize cash from the sale of assets, which I'll go into in a bit more detail later, and we've realized just over £60,000,000 there from selling our Swedish wind farm, Lunebyon. Speaker 100:07:13We did have existing commitments to meet during the year in relation to the Eris solar portfolio, and those were funded by a combination of some debt that we put in place with those assets, along with RCF drawdowns during the year of £87,000,000 Together with cash reserves within the broader group, those are the sources of capital that we've used during the year. And as you move across to the right, you can see that we have delivered through a combination of the fully covered on target dividend and the share buybacks that were initiated around the middle of the year, a total return to shareholders of over £40,000,000 As well as the scheduled principal repayments on the long term debt, the sale of the Swedish site allowed us to repay the majority of the RCF drawdowns that we'd made during the year. So total debt repayments of £86,000,000 And then you can see at the bottom in gray the new investment that we've made during the year, most of which related to that Irish solar portfolio, but we've also had some final construction payments on the brief solar farm, for example, and some payments into our existing portfolio of developers, as well as some new investments again, which I'll cover later. Speaker 100:08:35Looking ahead then into our priorities for 2025, we have committed to increase the level of cash returned to shareholders, partly through the increased dividend target of 6.17p per share, but also through an increase of £20,000,000 to the initial £10,000,000 buyback program, so a total buyback program now of £30,000,000 We will also continue to focus on reducing gearing in the company. So we've targeted, reducing gearing within the entire group to less than 40% of gross asset value within calendar year 2025. But as well as bringing the total headline number down, we've already been active on reducing the cost of the borrowing within ORIT. Since year end, we signed a hundred million pound 5 year term loan facility secured against the highly contracted assets that we have in The UK, which had no debt on them previously. And that's delivered a material saving on interest cost compared with the RCF that we've repaid using those proceeds. Speaker 100:09:47When we look at that resolve revolving credit facility, its maturity date had been February 2026. We have recently extended that until the middle of twenty twenty eight, as well as reducing the overall size of the facility to a hundred and £50,000,000 and that reduction in commitment fees should save our at around £850,000 per year. In terms of new investment, all else being equal, we would expect less in f y twenty twenty five, and we will be focusing on areas where we think the higher highest of returns should be available in order to compete with other capital allocation priorities, principally the buybacks and the reduction of gearing. And you can see examples of that already during the year where we have made follow on commitments to support some of our existing developer investments in particular, BLC and Nordic generation. So if I go into a bit more detail around the investments that we have made during 2024 and the first quarter of twenty twenty five. Speaker 100:10:55We've already touched on the Irish solar acquisition, which was by far the largest use of capital during 2024. We bought that site on a forward purchase arrangement, which means we were committed to make the acquisition once the sites were operational and those commitments were already made back in 2022 and 2023. So what we spent in 2024 was really following through on commitments we had made sometime before. And with that acquisition, we now have two forty one megawatts of operating solar capacity in Ireland across five sites, and they represent the largest operating solar complex in Ireland at the moment. The other investment that we made in 2024 was a follow on investment into Simply Blue Group, which is a developer of floating offshore wind and sustainable fuels headquartered in Ireland. Speaker 100:11:52And we provided a €7,000,000 investment in the most recent funding round in the summer of twenty twenty four to support that business as it continues to develop its projects and seek longer term significant strategic funding that will be needed to take these very large projects through the development cycle over the next few years. I've mentioned that since the end of the period, we've made two investments into developers. The first of these was into Nordic Generation, who are developing onshore wind and solar projects in Finland. We increased our commitment to that business, which has seen really strong progress on its pipeline to enable them to bring new projects into the pipeline and keep taking the existing projects through into the ready to build stage, some of which we would hope to come through over the next twelve to eighteen months. And finally, BLC, which is a developer of onshore, sorry, a developer of solar projects and batteries in The UK. Speaker 100:12:56Again, they have brought a pipeline of projects through to the stage where they have land rights and offers to connect to the grid and the additional £1,500,000 we've allocated to them will allow them to really accelerate the most far developed projects through and ensure that they can get through the planning process in order to get the most favorable grid connection dates. I want to spend a bit of time now going into a bit more detail about the large asset sale that we carried out during the year. This was the sale of the Lundbjorn wind farm in Sweden, which completed in the second half of the year, realizing proceeds of €74,000,000, which was a €1,700,000 uplift to the holding valuation at the time the sale was agreed. And this project really is a classic example of what we set out to do when Orit was launched just over five years ago. It was actually the first investment that we ever made back in March of twenty twenty. Speaker 100:14:03And at that time with the uncertainty of COVID looming, we were able to utilize our expertise and get really strong protections into the construction contracts around what might happen and how we'd be protected if there were delays because of COVID. As it happened, actually, we were able to deliver this project on time and on budget, not withstanding various issues with supply chain and with construction crews being stuck in quarantine. Again, utilizing that large team of industry specialists with strong connections throughout industry to unblock things when they arose. So with the project having been delivered on time and on budget in the middle of twenty twenty one, we continue to be very active through the operational stage, putting a ten year corporate PPA power purchase agreement in place on the project to provide a level of revenue certainty in a period of very volatile power prices. So as well as the strong operational performance of the site, that enabled us to deliver a successful exit in 2024. Speaker 100:15:10And over the four and a bit year hold period, we delivered a return of 11.3% to investors. And if you look at that together with some of the asset sales that we completed in 2023, we have now realized proceeds of a hundred and 61,000,000 from our capital recycling activities, all of which were delivered at an uplift to holding values, giving an aggregate NAV uplift of 3.2p per share. But we haven't stopped there. We have committed to continue to actively recycle capital within the portfolio and targeting at least £80,000,000 of sales proceeds during calendar year 2025 to support those priorities of returning cash to shareholders and bringing gearing down below 40%. As well as the new investments and the sale of assets, we've also been very active in managing the individual assets that are retained within the portfolio. Speaker 100:16:14And a highlight here has been on the revenue management side of things and the new contract that we put into place on the Cross Dykes Wind farm, which is a 46 megawatt wind farm in Scotland that Orret owns 51% of. This new contract, which is with Sky Media Group fixes the power prices for most of the generation from that project for ten years. And critically, it also retains the benefit of inflation linkage during that period. This is just one of a number of corporate sales agreements that we have entered into for Orit's portfolio. Another notable one of these is the contracts for all five of the Irish solar sites, which each have a fifteen year fixed price agreement with Microsoft. Speaker 100:17:04And those contracts together with some other hedging activity means that we have a very high degree of fixed revenues. 84% of the power sales are fixed price for the next two years. So I'm now going to hand back over to Chris to give some more detail on the portfolio. Speaker 200:17:24Great. Thank you, David. So here we have our portfolio map. And you can see that, although we have sold our Polish and Swedish wind farms, we still have a highly diversified portfolio. And we're confident that we'll be able to maintain that strong diversification as we continue to recycle assets. Speaker 200:17:49In our annual report this year for the first time, we've provided some quantitative analysis on the benefits of, of diversification. And we show that, having that diversification leads to a 40% improvement in downside uncertainty compared to as if or it was a single country, single technology fund. And now looking at that diversification in numbers. So, the portfolio is spread across five different countries. We continue to have an even balance between solar and on and offshore wind. Speaker 200:18:30And after all the construction activities that have taken place over the years, the portfolio is now almost entirely operational, really except for the developer allocation. And now looking at some operational highlights for the year. So once again, we've seen year on year growth in the portfolio, and in particular with the addition of the Ballina Kearney solar project in Ireland, and also the Breach solar farm in the in The UK, That has led to strong increases in solar capacity, and increases in revenue and EBITDA for the portfolio as a whole. The onshore wind, we've seen some reductions as a result of the sale of the Polish and Swedish assets. And you can also see that there's been a below budget performance, in general related to both lower than forecast wind and, Iranians and also some construction teething issues. Speaker 200:19:39So to dive into that budget performance a bit more here, you can see the impact of lower radiance and lower wind across those technologies. In terms of the site specific issues, most of these are now resolved. So for example, we've got very strong availability. Now that the come ahead wind farm is up and operating, we've been able to fully repanel and re energize the Sanon to Nindavar project in France. We've had some issues with some, main bearings on the wind turbines at our two Finnish wind farms. Speaker 200:20:22And the good news is, is that the first of those wind farms has had all the main bearings replaced and is fully operational. And the second one is, going through that replacement program now. The cost of that are budgeted and in any case, it's the turbine manufacturer who is taking the responsibility to do those repairs. And this chart really just shows the positive trajectory that we've seen in terms of our portfolio over the five years, of its existence and serves to show how far we've come during that period. And finally for me, just a few words to say on impact. Speaker 200:21:12We continue to consider that or it is an impact fund. We produce enough we produced enough power in 2024 to power the equipment of 284,000 homes or displace almost 300,000 tonnes of carbon during the period. We do lots and lots of community benefit and engagement activities, including planting urban forests and working with charities that help people retrain into the green economy and also mental health charities. Now with that, I'm going to hand over to Jen. Speaker 300:21:58Thanks, Chris, and good afternoon all. So I'll start by talking about the dividend performance. So in 2024, Auric delivered a fully covered dividend of 6.02p per share, which was in line with the target set out at the start of the year. This target represented a 4% uplift on prior year and said tracking against inflation for the third consecutive year. In terms of coverage, the dividend was comfortably covered by 1.24 times by operational cash flows. Speaker 300:22:31And if you exclude the principal debt repayment, coverage rose to 1.85 times. And as mentioned earlier, we've already announced a further increase for February in line with 2024 CPI, bringing the dividend to 6.17p per share. This next slide shows all its consistent track record of growing dividends. FY '25 will mark the fifth increase with the last four all in line with inflation. And once again, we expect the FY 2025 dividend to be fully covered by operational cash flows consistent with all previous years and that will offer an attractive yield of around 9.1% based on the December closing share price. Speaker 300:23:22Now moving away from dividends to the broader financials, at the year end, NAV stood at £570,000,000 or a hundred and 6 to a hundred and 2.6p per share. That's down slightly versus prior year, but the company still delivered a positive NAV return in the year of February. After including the debt at the SPV level and through the RCF, gross asset value sits at around £1,000,000,000 Now that brings Gav back to where we brought the year at the beginning of the 2024 reporting period following the sale of the Swedish wind asset and the acquisition of the Irish solar portfolio. Share price performance continues to be a challenge across the whole sector and all of its total shareholder return was minus 18.3% for the year. And whilst that discount analysis persists, the strong prices achieved through our capital recycling program highlight the robustness of the company's valuations, reinforcing that the share price doesn't reflect the fair value of the underlying assets. Speaker 300:24:34On debts, gearing increased from 39% to 45%. Again, that's mainly due to the acquisition of the Irish solar assets, our share buyback activity offset by the Swedish wind disposal. Our long term portfolio debt remains low cost and well protected as attached at around 90%. So this means that even with base rates at elevated levels, our average cost of debt was 2.74% when including the RCF borrowings. As already mentioned, post year end, GBP 100,000,000 of relatively expensive RCF borrowings have been refinanced into a fully hedged lower cost facility. Speaker 300:25:19And this brings the overall borrowing costs down to around 3.7%. It's also worth recalling that earlier in 2024, our gearing was expected to exceed 50% once commitments were fulfilled. However, now that we've met those significant commitments, gearing has been brought back down to 45%, which puts Ourott in a much stronger position going forward. Whilst we're confident the level of fixed revenue support leverage at these levels, we're committed to bringing debt down for around 40% of GAAP during 2025. And now looking at the valuation bridge in a little bit more detail, over the year, NAV Pasha fell by 3.4p from 106p to 102.6p. Speaker 300:26:13And aside from the expected deductions from dividends and costs at the fund level, which you can see on the right hand side of the bridge, the main valuation drivers were first, a small gain related to the sale of the Lund Beyond wind farm resulting in a NAV an uplift of £900,000 from unwinding the construction premium as the breached solar farm entered operations. Thirdly, a positive impact from the new PPA signed at the Cross Ice wind farm. And then beyond these, other movements which mostly sit in the balance of portfolio return column on this slide largely reflects the expected return on the portfolio over the period. A review of our development portfolio valuations, adjustments to short term cost assumptions and valuations and actual performance across the assets. So together, these factors, along with broader macroeconomic and price updates, which I'll cover over the next few slides, explain the overall movement in NAV in the year. Speaker 300:27:23Inflation assumptions remain relatively stable during the year, resulting in a net impact on valuations of £1,000,000 and our long term inflation assumptions remain at 2.25% for The UK and 2% for all other European markets. On FX, sterling strengthened against the euro in the period resulting in a gross £17.1 million pounds negative valuation impact. However, the company's FX strategy went effectively, delivering a £14,600,000 gain that effectively offset that FX impact. During the period, merchant power price forecast decreased slightly resulting in a small negative impact of around £1,000,000 That said, O'Rourke is well insulated from this due to its highly fixed revenue base with fixed revenues over a two year period increasing from 81% to 84%. The average price achieved across all revenue streams also improved with the shift being mainly driven by the sale of the wool niche and exposed Swedish asset and acquisition of the Irish, solar farms, which benefit from an attractively priced PPA. Speaker 300:28:44So despite a decline in mentioned prices or its overall generated generation weighted price actually increased. And then lastly, on green certificate pricing, which covers WIGOs in The UK and guarantees of origin in Europe, these remain broadly stable with a slight uptick and capacity market forecast declined slightly. Lastly, on discount rates, there were no changes to the core discount rates applied to the portfolio asset valuations during the year. However, the weighted average discount rate fell from 7.2% to 7%. That decrease reflects lower overall risk in portfolio primarily due to two factors. Speaker 300:29:27Firstly, the removal of construction risk premium from assets that were in construction are now operational. And secondly, the higher fixed revenues, which overall carry a lower risk and therefore attract a lower discount rate. It's worth noting that this average discount rate only applies to operational assets where a DCF is used as a valuation approach. It therefore excludes the return of benefit from FX hedging at the company level, the higher returns used from, the higher returns expected from developer investments and the return improvement, which should be expected from additional leverage at the RCF level. So taking those additional three things into account, the expected return across the portfolio before PLC costs is 8.1%. Speaker 300:30:19And with that, I'll hand back to David. Speaker 100:30:24Thank you, Jen. So now I wanted to switch focus to look ahead at what we can see coming up. Got a couple of slides here giving a bit more detail around the revenue landscape. We talked a couple of times throughout the presentation about the high level of fixed prices and contracting that we have over the next two years and how that's increased from 81% to 84% during calendar year 2024. But what you can see from this chart is that that highly contracted revenue stack really continues out for the foreseeable future. Speaker 100:30:58We have more than 70% of our revenues fixed price in nature, whether through government support schemes or fixed price power cells to corporates and utilities, right out until the early 2030s, we've got that over 70% level. And even going out into the early 2040s, we already have some revenues which are fixed price in nature because of the nature of our mandate and the fact that we have built new projects which benefit from new twenty year government support schemes in France and Germany, for example. We've also got a strong track record of adding new fixed revenues to our portfolio. So we're confident that we'll be able to keep increasing the level of fixed revenues that we have good visibility on out into later in the 2030s by putting new corporate PPAs on a on a rolling basis as we move forward. And as well as that high level of fixed revenues, we also have a high level of explicit contractual inflation linkage within our sales arrangements. Speaker 100:32:02So almost half of the revenues are inflation linked over the next ten years. And that's something that's been really powerful when we've come to set the dividend increase with the board each year and has allowed the board to increase dividends in line with inflation for four years in a row. Looking at the bigger picture now in the sector, looking at the listed renewable energy sector, it's clear that share prices are not where we would want them to be and that share price performance right across the industry has been disappointing. But that does not reflect the fundamentals of the renewable energy industry more broadly, where we continue to see a huge market opportunity and one where ORIT's mandate and our focus on delivering new projects and on, having a broad geographical mandate means that we can be nimble and find the most attractive markets, the most attractive opportunities to deliver benefits to investors from those massive tailwinds in the broader renewable industry. It remains the case that governments right across Europe are hugely supportive of the energy transition and recognize that building new wind and solar is a huge benefit, not just for decarbonization, but also for bringing consumer bills down and increasing energy security by reducing reliance on imported fossil fuels. Speaker 100:33:31We've also demonstrated now a track record of growing generation and with it portfolio revenue and EBITDA year on year. And we've been able to use that operational cash flow to deliver fully covered dividends year on year and keep growing those dividends. And with the shares trading where they are now and the new dividend target, the yield is in the high 9%, which we think represents really attractive level when you consider that inflation linkage that we have within the portfolio and that we're also able to deliver capital growth through that earlier stage investment, in particular, those developer investments, which have attractive pipelines ahead of them, which we can choose to build, if that makes sense from a capital allocation point of view, but equally can sell to realize cash and consider reinvestment into more development or other activities. Overall, therefore, whilst we recognize the deep discount that the shares have been trading at, we are confident that that does not represent the fundamental underlying value of the assets. We have delivered a number of asset sales at an average 12% above net asset value. Speaker 100:34:42All of those asset sales above our holding value. And it's not just us. If you look across the industry, a number of trusts have been selling assets and the overwhelming majority of those asset sales have been above net asset value. So we think that there continues to be value within our portfolio and that where the share price is now, the investors should not see that as a sign that the portfolio is misvalued, rather that the shares are mispricing the value of the portfolio. Operator00:35:28That's great. Thank you very much for the presentation. Ladies and gentlemen, please do continue to submit your questions, and you can do so just by using the Q and A tab that is situated on the top right hand corner of your screen. But just while the company take a few moments to see the questions that have been submitted today, I'd like to remind you that a recording of this presentation, along along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Operator00:35:54Momentarily, I'll just hand over to Charlotte to share the Q and A, and then I'll pick up from the team at the end. Speaker 200:36:20Can I just check everyone can hear me now? Operator00:36:22Yes, we can hear you clearly, Chris. Over to you. Speaker 200:36:24I think that's better. Okay. So I'll start again. So, Robert, thanks. Thanks for your questions. Speaker 200:36:34Now, Spain, like many markets around Europe, has a grid network that was originally built for large centralized generation and struggling to keep up with the proliferation of decentralized renewable generation. Now, that as a result has caused many, many delays for new projects to connect to the grid. In Spain, in particular, the market there, the developer community, it's almost stalled at the moment, waiting for the Spanish government to announce the timing of the next grid option. The UK, on the other hand, we have in recent years received very long dated grid connection dates. However, The UK is making good steps towards rationalizing that grid queue and trying to prioritize high quality projects that are advanced and are in locations where energy is needed. Speaker 200:37:41So we're seeing some good positive developments there. And then there's other markets. Finland is one where we have some development exposure. And there, the Finnish grid operator is very quick in connecting projects. So I think the response is, you know, it's a bit of a mixed bag. Speaker 200:38:00Each market is moving at a different pace. And to your question around has it stymied the lack of sorry, the build, operate and sell business model, for us, we continue to see lots and lots of projects that are ready to build with a reasonable grid connection date. And, so to that in that sense, it hasn't really slowed us down. So, so yeah. So, and then to the second question here. Speaker 200:38:33So how much of our capital has been allocated in research and development enterprises that do not return earnings to our company? So we don't invest into R and D companies in a sort of technological sense. We do have an allocation towards development, that's 5% of gross asset value. We've invested into five different platforms that are bringing on the next generation of wind and solar projects, hydrogen, across our markets. And those projects those development investments typically don't yield much during our ownership. Speaker 200:39:15But when we have successful projects, we're able to sell those and then crystallize a development gain as a result. And that gets reflected in the NAV. For the next couple of questions, I might hand over to David to answer those. Speaker 400:39:32So the next question, David, is, for several quarters, wind generation and irradiation have been overestimated. Is there a case of a step increase in the discount rate to reflect this reality? Operator00:39:44Yeah. Thanks for that question. I Speaker 100:39:46think, actually, 2024 has been relatively unusual in having both wind speeds and solar irradiation below long term expectations. We've seen quite a pattern, not just in the in the sort of previous four years for its existence, but for for years before and where, more often than not, when the wind speeds are below long term averages, actually, it's a sunnier than average year and vice versa so 2024 has been quite unusual year in that regard we have seen some others in the sector updating wind forecasts recently perhaps some with some more mature portfolios including assets that might have been built ten or more years ago and there clearly has been many years of new weather data since then. There have been questions in the sector as to whether climate change is leading to differences in wind speeds, not universally down but just different areas having some lower, some higher. So I think it's valid to be asking about the long term wind generation forecast, that is something that we routinely reassess but usually it only makes sense to do that when you have a project with several years of operational data to carry out that assessment on so rather than thinking about this in terms of discount rate I think we've got a table in the annual report which which shows in a bit more detail how old each of our assets are and when they might make sense to to do a review of the long term generation estimates which could go up as well as down and and certainly as I say we haven't seen any sort of consistency of pattern on on solar being repeatedly below budget but I think it is fair to say that the last three years have been in sort of onshore in The UK in particular, below long term averages which raises a valid question around whether that's a longer term pattern. Speaker 100:41:46We don't see this as being material for ORIT in the round and one important reason is it was actually fleshed out again in the annual report there's a bit of a case study on the benefits of diversification. So we unlike some other vehicles who might be focused on a single technology in a single country, if the weather pattern starts to shift in that country, we're not fully exposed to that and that data analysis that we've summarised in the annual report suggests that in a downside sensitivity, having our broad geographical mandate and having the balance between wind and solar actually reduces that downside scenario by around 40%, so a 40% better outcome in a downside scenario through having our diversification compared with single technology, single country. Speaker 400:42:38Right. Thanks, David. Staying with you on this next question. What percentage of solar and wind electricity production is not subject to PPAs and sold on the spot market? I read that, battery energy storage revenues have surged in December and January helped by low wind generation and cold weather leading to higher UK demand. Speaker 400:42:59Conditions which created multiple instances of price spikes leading to lucrative trading opportunities for stored assets. There are also record levels of dispatch in the balancing mechanism. Is there a case is there a case for a build out of more co located beds to optimize pricing? Speaker 100:43:16So hopefully, some of the slides we have towards the end of the presentation help give a bit of color on the balance between where electricity production is sold on the spot market and and where it's fixed. So over the next couple of years, only 16% of our revenues are exposed to power prices. And even over the next, eight years or so, it's it's really no more than 2530% of revenues over that entire period which are not fixed price in nature when it comes to this idea of co locating batteries that's something that you sometimes they refer to as hybridization, so taking a solar project or a wind project to being one that's a hybrid project, potentially including some battery storage. We already have one site in the portfolio, the Breach Solar Farm, where we have the rights, we have the planning permission, we have the grid connection to be able to add a battery storage asset if we want to. That grid connection becomes fully live in 2029 so we don't need to make that decision right now. Speaker 100:44:21But it is the kind of thing that we are absolutely looking at across our portfolio where could there be opportunities to add value through putting a battery alongside an existing solar or wind farm. There's all sorts of technical complexities with that but it is something that we continue to review across the portfolio in the broader context of the capital allocation considerations that we have to look at in in the share price environment we're in. Speaker 400:44:51Great. Thanks, David. Got a few questions here along the same theme. And this is along the theme of merger or acquisition. Would Auryk consider consolidating with another renewable infrastructure trust to achieve greater scale and reap the associated benefits of scale and costs and diversification? Speaker 400:45:10There's a few other suggestions here. Would you consider being consolidator? Ticker Grid would be a good acquisition given your low exposure to battery, and would you consider another merger with another higher, another player to narrow the discount? Speaker 200:45:26So I think I mean, we we are acutely aware, of of where our share price is trading versus NAV. And there are a lot of, things that we are doing to try and close that gap, whether it be our share buyback program. We're looking at reducing our debt. We're also spending a huge amount of time and increasing the size of our team who are focused on the asset performance. And the other one, which comes up quite often, is this idea of merging with another investment trust. Speaker 200:45:58Now, as some of you may be aware, we have previously made an approach to another trust, which which ended up not proceeding. But it is something that we would consider doing. I think we have a differentiated and unique mandate within the sector, and I think that places us extremely well to potentially be the consolidator in the space. Now, when we look at potential targets, we need to consider all sorts of things. First of all, whether the assets represent good value, whether they contribute to our diversification, ambitions, and generally whether the whether the portfolio would would sort of improve, the portfolio that we already have. Speaker 200:46:57So lots and lots of considerations, and it's something that we continue to talk to our advisers about. Speaker 400:47:05Great. Thanks, Chris. Got a question on discount rates. Your UK discount rate is lower than your pure play solar peers and much lower than your pure play wind peer. How do you justify it? Operator00:47:19Yeah. I might pick that one up. So there's a few things Speaker 100:47:22to note there, and actually, Jen covered a couple of them already. When it comes to making sure that you're comparing like with like on published discount rates, so at the end of twenty twenty four, most of our UK assets had no death on them at all and so when you're comparing with say a pure play solar fund that might quote a rate of around 8% we're not showing the increase in return that comes with that leverage but with the refinancing that we've recently done I think going forward you'll see a bit more of that and you should see that the rates are actually much more comparable than they may first appear. Second thing to note is the discount rate is just one of many assumptions that goes into our valuations and you could get to the same valuation clearly with a higher or lower discount rate if you have lower or higher cash flow assumptions, particularly power price assumptions being a very critical one there and we as manager at Optus Energy Generation manage much more money than just ORIT and a lot of those other products that our colleagues are managing have been actively raising and spending money over the last two years and so we have very good intelligence as to the price at which assets are actually trading on the market and we are therefore very confident that our valuations are not above where the market is trading. Speaker 100:48:51Indeed, even if we just take a more simple benchmark of our valuations on a pounds per megawatt basis compared to a pure play pair, we generally see that for example our solar valuations on a pound per megawatt basis come out lower than the most obvious bid, so I think there's more than just looking at headline discount rates and we then also have those factors that Jen covered for example around our FX hedging and our developer investments that mean really the sort of headline rate that people should be focusing on is more than 8.1% number rather than the seven percent which is not taking into account those real factors that impact on returns. Speaker 400:49:34Great. Next question. Your peers have moved to set their fees as a proportion of market cap or blended market cap in that. Would you consider doing the same? Speaker 200:49:45Okay. I can take this one. So, we've recently, in one of our recent announcements, we've stated that we are in discussions with our board around the fee structure. And I've noted many of our peers having already implemented changes. We will be conducting some shareholder engagement in the very near future on this topic. Speaker 200:50:13And there's little more I can say beyond that at this point. But what I would say is that from the start, Orad has what we've like to call a clean fee structure, which means our headline fee is is the entirety of the fee. We don't have any commercial arrangements with any of the assets within the portfolio. That headline fee pays for all of our fund and asset management services that we provide to the vehicle. So it's, it is it is quite a complex topic actually, when you dig into it, and one that's, as I say, we're continuing to discuss with our board and shortly our shareholders. Speaker 400:50:52Great. Thanks, Chris. Comment here. Thanks for the presentation and performance you have delivered. A couple of questions from this one investor. Speaker 400:51:02Given the share prices are mispriced rather than the assets, why bother with share buybacks? Is it not best to keep the cash flow investment if returns on the assets are promising? Speaker 100:51:12Yes. So this really gets to the heart of why, why you might do a buyback actually and and it's a topic that there's there's lots of different views on on the merits of buybacks. But fundamentally given that we are confident in the valuation of our assets with the share price where it is today we can effectively reinvest in our existing portfolio at 35% cheaper than we could go and buy a similar asset on the market so that's that's why a buyback can make sense and why it delivers NAV per share accretion for the remaining investors Where it could make sense to use that cash for new investments is if those investments are higher returning than our existing average portfolio so that's exactly what we've done with the investments we have made recently particularly the investments into BLC and into Nordic generation and those are development stage investments which we would expect to return significantly higher than the 8% average of the portfolio currently. We really think those do still make sense even with the shares at a different level but that discount and the sort of the mispricing actually is is why Jeff buybacks are an opportunity rather than a reason not to do them. Speaker 400:52:37Great. Follow-up question, not not related though. There's a figure of 24,000,000 for corporate costs mentioned. Can you give us a flavor of what that is? Speaker 100:52:46Yeah. Do you want to pick that up, Dan? Speaker 300:52:47Yeah. And so the bulk of that is RCF costs. So that's all that's there is for RCF, including interest and other fees. It also includes running costs of the fund such as management fees. It also covers kind of general running costs at the corporate companies and the assets that include things like accounting fees, wallet fees, etcetera. Speaker 400:53:14Great. Thanks, Jen. How are you managing issues around the wind blowing excessively and producing surplus power similarly with solar if the sun doesn't shine as expected? Does the battery and other storage feature or does all power get sold to the off takers even if surface delivery their requirements? Speaker 100:53:32So I can put this Operator00:53:32one up. There's something we Speaker 100:53:34had a bit of a feature on this actually in the interim report, which which can give a bit more color. But what what would typically happen in the market if there is more wind than the grid can use is either power prices can become negative or generators can be forced to switch off so the power price going negative is effectively where the power gets sold even if it's surplus to the requirements. Now what we set out in the interim report of six months or so ago is that actually our active approach to contracting and the benefit we have within with a specialist team of market professionals means that we've been much less exposed to that than a generator that didn't have those active arrangements so an example of that is in Finland in 2024 we saw quite a few periods where exactly that happened and the power price went negative but we had entered into a contract where in those periods we would effectively turn the wind farm off but still get paid the fixed price as if we had been generating. Similarly, in some of our Scottish wind farms, when the grid cannot take that electricity but we have a fixed price agreement with the corporate to sell them that electricity, the grid operator will effectively make us whole for having to be turned off because the wires haven't got the capacity to take that path. Speaker 100:55:00So there's a number of different mechanisms for what happens in that situation. What's really important is having the expertise to make sure that the investment is protected and you're not just having to keep turning your wind farm off and receive nothing. Speaker 400:55:15Great. Questions at the time, we've got a couple more questions. I think another group covered, through the other questions. A a quick one on hydrogen. You used this word in terms of development efforts, which worries me. Speaker 400:55:29I've seen many projects projects rightly getting canceled because it's too expensive slash risky. Any comment on this? Speaker 200:55:37Yep. I can take that one. So thanks for the question, James. And maybe just to just to provide a small bit of context. So first of all, our allocation towards developers is only 5% of gross asset value. Speaker 200:55:54And our allocation to our Hadrian platform is a small subset of that. So you're quite right in saying it is expensive and risky, but we only have limited exposure to it. The other thing that we have done to manage that risk is just focus on UK projects which benefit from the UK government subsidy regime, and ones where there is a clear use case. I think many of the projects that you see cancelled tend to be very large projects, which are sort of designed perhaps without knowing exactly where the customer is or how you're going to get the hydrogen there, whereas the projects we're building can be piped straight into their final use case. So we've targeted what we think are the less risky ones. Speaker 200:56:48We've already got our first planning consent. We're currently running a sales process for that project. And we are sort of having a good old think about what we're going to do next on hydrogen. It is a nascent sector, and one which I'm sure will go through many iterations before it becomes mature. Speaker 400:57:10Great. Thanks, Chris. Time for something. Two more questions. The NAV seems to be static or slowly declining, and the discount or share price to NAV has been growing in recent years. Speaker 400:57:20Do you have any comments on that? And is anything being done to address these issues? Speaker 100:57:26Yes. I think if you if I start with the NAV, it's true that the NAVs declined, in the year and and the same is true in the prior year. We still delivered a positive NAV total return, but a significant component of that total return has been in the form of dividends paid out of the company. And if you look at the valuation bridge that Jen talked to earlier, I think what effectively you're seeing there is that the return on the portfolio of assets just haven't quite kept up with the total of the dividends we've paid out and the running costs of the company and within that £24,000,000 figure that we had a question on earlier as Jen said, a majority of that around, 13 or 14,000,000 of that number was the RCF costs that were paid during 2024, which is why we're so pleased to have entered into that new hundred million pound loan, which significantly reduces the interest costs. It's around a 1.3% day one interest cost reduction on that facility. Speaker 100:58:28So, we've also, you know, committed to bring down the the level of borrowing that we have. So we're taking action to trim back those running costs that have been slightly dragging on the lab over the last year or two. And we still have assets within the portfolio, particularly some of those growth assets that we see can continue to support NAV growth even as we continue to pay dividends out of the company. Then on the share price side of things, I think we've touched on this a bit both in the presentation and in the questions. We don't think the share price reflects the value of the assets at all, but it's clearly not something that we can or have been ignoring. Speaker 100:59:14So that discount was certainly behind the launch of the share buyback program and the subsequent increase earlier this year but but clearly something needs to change in the sector. There's effectively more sellers than buyers, a bit of a supply demand mismatch in the sector and again perhaps that goes to some of the the questions we had previously around consolidations so we're we're being very active with talking to our investors as much as possible we're always happy to hear views and and and answer questions on this we're we're certainly not sort of sat here thinking there's nothing we can do about the share price particularly we're we're not in control of it So we'll continue to be very disciplined in our capital allocation prioritizing the buybacks and the debt reduction and just keep talking to investors to understand their views and how we can help close that gap effectively between the NAV and the share price. Speaker 401:00:09Thanks, David. Questions we're at time. We might have time to squeeze in. It's very last question. I think we touched on it, but if it's any other views, do you have a view on whether it is incrementally more profitable to invest in an additional megawatt of wind capacity versus solar capacity? Speaker 401:00:24Appreciate it might change by geography and other factors, but I'm wondering why you're proportionately higher on solar and less on wind. Speaker 201:00:30Yeah. Thanks for the question. So, yeah, just to the from a strategic level, we are aiming to maintain a fairly even split between wind, whether it's on or offshore, and solar. The reason why we're slightly higher on solar at the moment is because of the recent sales of the wind farms that we've made. And in terms of whether that sort of additional megawatt is more profitable if it's wind or solar, it really sort of depends on your appetite for risk. Speaker 201:01:04Wind farms tend to attract higher discount rates because their generation profile is more volatile and because they are mechanical devices that can break down now and then. Whereas, solar solar projects are more reliable, but they all produce power at the same time, and that brings with it other risks. We look at each project on its own merits, the market it's in, the stage of development, and make our decisions on that. So thanks for the question. Speaker 401:01:36Great. That closes out the questions. So Alessandro, over to you. Operator01:01:39Okay. Thanks for all the questions from investors. The company can review the questions submitted today and we will publish those responses out on the Investor Meet company platform. Just before redirecting investors, try to get their feedback, to you. David, could I just ask you for a few closing comments? Speaker 101:01:56Yes. So we'd just like to thank everyone for their time and for the excellent questions we've had. I hope it's been a helpful presentation. We remain very positive about the sector and for the potential that this company has, but clearly the share price environment is not great and so any feedback is always very welcome. We, I think, have on the presentation our email address if you need to get in touch. Speaker 101:02:22But, yeah, just want to say thanks again to everyone for joining and have a good rest of the day. Thank you very much. Operator01:02:29Perfect. Thank you once again for updating today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of Octopus Renewables Infrastructure Trust PLC, We'd like to thank you for attending today's presentation and good afternoon.Read morePowered by