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(Sharecast News) - Investment firm the Renewables Infrastructure Group reaffirmed its FY dividend guidance on Friday as it navigated a challenging operating environment in H1, marked by weak wind resource across key European markets.
TRIG said power generation came in 10% below budget, driven by poor wind conditions in the UK, France, and Germany, and said this, alongside lower power price forecasts, contributed to a 7.7p decline in net asset value per share to 108.2p.
"Low generation as a result of particularly poor wind speeds in H1 can be expected to impact H2 cash flows meaning that covering the FY 2025 dividend may be tight," said TRIG. "The board reaffirms the dividend target for 2025 of 7.55p per share, and will aim to rebuild net dividend cover in 2026 back towards the steady-state, long-term average of 1.1x to 1.2x.
TRIG also stated that technical upgrades across its portfolio added 19m to asset value, partially offsetting external pressures, and said that its weighted average portfolio discount rate rose 0.2% to 8.8%, with mainland European assets seeing a 30bps increase.
The FTSE 250-listed firm added that it had repaid 105m in project-level debt during the period, with dividend cover at 2.2x before repayment and 1.0x after and also said its balance sheet remained robust, supported by 1.8bn in fixed-rate, amortising debt and a refinanced 300m revolving credit facility maturing in 2028.
Looking ahead, TRIG highlighted that insurance recoveries related to offshore cable faults were expected to support its H2 performance.
Chairman Richard Morse said: "Of fundamental importance for investment companies to succeed in this uncertain environment is a close attention to risk management, with diversification and scale being important components, and the execution of a growth strategy, to provide the risk and reward balance that shareholders seek.
"TRIG is already well placed and the board and managers are committed to furthering these fundamentals to provide resilient and attractive returns to our investors."
As of 0850 BST, TRIG shares were up 0.23% at 81.89p.
Reporting by Iain Gilbert at Sharecast.com