Aquila European Renewables (AERI) H1 2024 earnings summary

Executive summary

• Net asset value (NAV) declined to EUR 335.5 million (88.7c/share) as of 30 June 2024, down from EUR 372.5 million at end-2023, reflecting a 7.1% negative total NAV return per share including dividends.

• Dividend per share increased 5% to 2.9 cents for 1H24, with a 2024 target of 5.79 cents per share and an 8.9% yield.

• Portfolio remains diversified across wind, solar PV, and hydro in six European countries, with 464 MW operating capacity.

• Sale of Tesla wind farm stake agreed at a 10.8% premium to NAV, with completion expected by October 2024 and proceeds to reduce leverage.

• Shareholder continuation or wind-down vote scheduled for 30 September 2024, with ongoing strategic review.

Financial highlights

• NAV per share fell to 88.7c (31 Dec 2023: 98.5c); net assets decreased 9.9% to EUR 335.5 million.

• Total underlying earnings were EUR 9.7 million, down from EUR 12.8 million in 1H23.

• Dividend cover after debt amortisation was 0.9x (1.2x in 1H23); before debt amortisation, 1.4x.

• Gearing increased to 36.3% of gross asset value (GAV); EUR 5.3 million of debt repaid in 1H24.

• Loss for the period was EUR 25.7 million, driven by EUR 31.8 million unrealised losses on investments.

Outlook and guidance

• 2024 dividend target of 5.79 cents per share, representing 5% growth over 2023, reaffirmed.

• Further deleveraging expected after Tesla sale, with pro forma gearing projected to fall to 31.7%.

• Board expects approval of a managed wind-down at the 30 September 2024 GM, with orderly asset realisation to follow.

• Macro environment may improve in 2H24, but risks from geopolitical tensions and commodity price volatility remain.