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LONDON - Octopus Renewables Infrastructure Trust (ORIT) has released its annual results for the year ending December 31, 2024, showcasing a net asset value (NAV) total return of 2.5%, a slight increase from the previous year’s 2.1%. The company’s operational performance saw a power generation increase of 7%, revenue growth of 12%, and a 16% rise in EBITDA.
The trust met its dividend target, distributing 6.02 pence per share, which was 1.24 times covered by the operating portfolio’s cash flows. This dividend represents a 4% increase over the previous year, marking the third consecutive year of dividend growth in line with the UK Consumer Price Index (CPI). Looking ahead, ORIT has set a dividend target for the year ending December 31, 2025, at 6.17 pence per share, an increase that also aligns with the UK CPI of 2.5% and is expected to be fully covered by earnings.
Despite broader market headwinds, including a reassessment of investment trust costs and volatility in the bond market, ORIT has made strides in reducing its debt size and cost, potentially paving the way for further dividend growth. The company operates in regions committed to renewable energy, differentiating its approach from the U.S. market’s stance on renewables.
The sale of ORIT’s Swedish wind asset, which yielded an internal rate of return (IRR) of over 11% from construction to sale, highlights the trust’s potential for equity upside beyond the steady income it provides. This transaction, along with several other disposals over the past 18 months, has reinforced the stability of ORIT’s NAV.
Given the trust’s positive operational progress, a progressive and covered dividend, and a balanced capital allocation policy, the current 36% discount on ORIT’s shares appears notably large. With a yield of approximately 9.4% at the current share price (as of March 31, 2025), ORIT remains an attractive option for investors seeking exposure to the renewable energy sector.
This summary is based on a press release statement and reflects the performance and outlook of Octopus Renewables Infrastructure Trust as reported by Kepler Trust Intelligence.
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