Greencoat Renewables wooed SA investors with a maiden JSE dividend declaration on Monday after publishing weaker interim results.
The company declared an interim dividend of 3.41c per share, in line with its full-year target, as gross cash generation slumped to €68.7m — almost half of what it reported in the six months to end-June 2024.
The drop came as Greencoat lowered its wind resource budget earlier this year, in line with a 5% year on year slip in renewable electricity generation across its assets.
Additionally, the disposal of a portfolio of Irish assets and the Kokkoneva wind farm in Finland, sold in the previous period, resulted in a 9.4% slip in the group’s net asset value per share to 101c.
The company, which embarked on a secondary JSE listing in May, brought a unique investment proposition to local buyers, as the first JSE-listed company with an entirely offshore portfolio of European renewable energy assets.
While SA’s renewable energy landscape is shrouded in policy uncertainty, companies such as Greencoat offer the opportunity to invest in jurisdictions with government-backed tariffs or “particularly strong fundamentals that support merchant energy markets”.
Greencoat declared SA as a key market for the next phase of its growth when it embarked on a secondary listing. However, the company has had a tough time attracting investors in recent months, with shares falling nearly 15% since its JSE debut.
Greencoat chairperson Ronan Murphy said the group had remained busy and proactive in the first six months, with “clear strategic progress and good operational performance, notwithstanding ongoing challenges in the wider environment”.
“The rapid rise in data-centre demand driven by AI has continued to accelerate across Europe and we were pleased to sign our second power purchase agreement (PPA) with Keppel DC Reit [real estate investment trust] in the period,” he said.
The PPA in question is a 10-year deal that will provide about 20% of Singapore-based asset manager Keppel’s electricity needs.
The group also enjoyed €200m in total disposal proceeds from the sale of its Irish and Finnish assets.
Murphy reiterated the group’s rosy outlook for renewable energy investment as Europe intensifies its drive towards net zero, supported by policy shifts and emerging technology.
The company estimates that, under current climate policies, Europe’s wind, solar and battery capacity will need to increase by 350GW, requiring more than €300bn in investment by 2030.
Asset manager Schroders estimates that investment worth $28-trillion in renewable infrastructure is needed over the next three decades to meet demand globally, and more than double that is needed to reach net-zero emissions by 2050.
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