JLEN shares were up 0.6% to 120.3p in late morning trading on Tuesday following a quarterly NAV growth to £762.9 million, amounting to 115.3p per share and representing a 14.6p rise since 31 December 2021.
The company attributed its uplift to a selection of drivers, including power prices, which saw a dramatic rise over the past 12 months and brought summer 2022 prices to almost triple the rates from April 2021 to March 2022.
Gas prices reportedly increased more than 500% in the same period, before dropping down to 300% higher in April 2022.
JLEN added that its green energy assets such as solar and wind grew its NAV by 5p, alongside a further 8.4p uptick generated by changes in electricity price assumptions at two bio-energy projects, which were previously held at acquisition cost in its 31 December 2021 valuation.
The assets were reported as an ETA Energy-from-Waste resource in Italy, and Cramlington biomass in the UK, both of which were baseload generators with limited fixed price contracts at the time of acquisition, resulting in strong positioning to benefit from recent rises.
JLEN confirmed its MWh basis across electricity and gas generating assets was 76% fixed for summer this year, 64% fixed for winter and 47% fixed for summer 2023, representing a high level of firm confidence for revenues.
Inflation played a key role, with the combination of higher actual and near term inflation adding 2.6p to the group’s NAV.
Discount rates reportedly reduced for onshore wind projects, in line with observed market benchmarks, and the discount rate for the company’s investment in low-carbon refuelling infrastructure was also reduced on the satisfactory rollout of new sites.
The investment firm added that a risk premium had been added to the discount rate for its Cramlington asset, due to its sensitivity to near term electricity prices, however the group expected the premium to be removed progressively as uncertainty around actual prices captures decreased.
Cramlington currently has 50% of merchant revenues fixed for summer in 2022.
JLEN commented that the net effect of changes to discount rates was to grow the NAV by 1p.
The investment firm announced a quarterly dividend of 1.7p per share, which amounted to a total dividend of 6.8p per share combined with the 5.1p dividends paid out in the current financial year, in line with the company’s target dividend listed in its 2021 annual report.
JLEN also announced a rise to the target dividend for the next financial year of 5% to 7.14p per share for its 2023 financial year.
