NextEnergy Solar Fund H2 2025 Earnings Report
NextEnergy Solar Fund (LON:NESF) reported its H2 2025 earnings on June 16, 2025. Here are the key highlights from the report:
– The company has maintained a dividend target of 8.43p per share for the fiscal year ending March 31, 2026, which represents an attractive yield of approximately 12% that is fully covered by earnings.
– As of March 31, 2025, the net asset value (NAV) per share decreased to 95.1p, primarily due to lower power price forecasts and a 5.3% shortfall in generation driven by adverse weather and network outages.
– Under its capital recycling program, NESF sold 145 MW of assets, raising £72.5 million and achieving a NAV uplift of 2.76p. The company also repurchased £11.2 million worth of shares and reduced debt by £59.5 million.
– NESF’s ordinary shares traded at an average discount of 27% to NAV throughout the year, reflecting broader sector trends influenced by rising interest rates and diminished institutional demand.
– The portfolio now consists of 101 operating solar and battery storage assets, along with a $50 million private fund investment, generating sufficient clean energy to power approximately 254,000 homes annually, enhancing diversification.
During the earnings call, Interim Chairman Paul LePage expressed confidence in the company’s direction and highlighted the board’s commitment to exploring all strategic options to enhance shareholder value. He acknowledged the challenges posed by the persistent share price discount to NAV, which is not exclusive to NESF but indicative of broader market dynamics.
Financial Highlights
– NESF’s gross asset value remains above £1 billion.
– The NAV stood at £547.4 million, translating to 95.1p per ordinary share.
– Despite the reduction in NAV, the portfolio generated £73.2 million in cash income, demonstrating resilient asset-level cash flows and a cash coverage ratio of 1.1 times supporting the dividend.
– The board reaffirmed the dividend target of 8.43p per share for FY 2025-2026, aligning with prior year performance.
In terms of capital structure, the company’s financial debt gearing, excluding preference shares, was 29.7%, while total gearing, including preference shares, was 48.4%. Approximately 70% of the company’s debt is fixed-rate, providing long-term interest rate stability.
Operational Performance and Future Outlook
The portfolio generated 830 GWh of energy during the financial year, slightly below the previous year’s output of 852 GWh. The generation figure was affected by adverse weather conditions and unplanned network outages. The company actively pursued performance optimization initiatives, including technical upgrades across its assets.
Looking ahead, NESF remains optimistic about the growth potential of the UK solar and energy storage markets, with the government aiming to triple solar capacity and significantly increase battery storage by 2030. The company’s investment strategy is well-aligned with these ambitious targets, positioning it for long-term success.
In summary, despite external challenges and a reduction in NAV, NESF continues to deliver stable income and maintain a disciplined capital structure, with a focus on enhancing shareholder value through strategic initiatives and robust operational management.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/nextenergy-solar-fund-reports-h2-2025-earnings-dividend-target-maintained-amid-nav-decline/
