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Investing.com - Foresight Solar Fund Limited (LSE:FSFL) on Thursday reported a 5.9% decline in its unaudited net asset value (NAV) for the third quarter of 2025, driven by tax review adjustments and asset valuation write-downs. Shares in the renewable energy investment trust tumbled 6.6% following the announcement.
The company’s NAV fell to £564.5 million as of September 30, 2025, or 102.1 pence per share, down from £603.8 million (108.5 pence per share) at the end of June.
The most significant negative impact came from a tax review adjustment that reduced NAV by 3.6 pence per share, following engagement with HM Revenue & Customs regarding the group’s tax structure.
Additionally, Foresight Solar increased discount rates for its Australian assets by 165 basis points after pausing the divestment process when bids were deemed undeliverable. This contributed to a 1.4 pence per share reduction in NAV.
The company also faced operational challenges, with electricity production 6.3% below budget in Q3 despite irradiation being 3.6% above base case.
"The valuation reductions and the tax review are disappointing for us and shareholders," said Tony Roper, chair of Foresight Solar. "This quarter’s challenging news compounds a difficult year for the renewable energy investment trust sector, with a difficult macro environment, a volatile regulatory landscape and frustrating share price performance."
The company’s gearing increased to 41.7% of Gross Asset Value at the end of September, up from 40.0% in June, though still within its 50% limit. The revolving credit facility balance stood at £91.7 million, up from £75.9 million in the previous quarter.
Looking ahead, Foresight Solar faces potential additional challenges from UK government proposals to revise inflation indexation of Renewable Obligation and Feed-in Tariff schemes, which could impact future revenues.
The company estimates these changes could reduce NAV by 1.6% to 10.2%, depending on which option is implemented.
Despite these headwinds, management remains focused on addressing the share price discount to NAV through ongoing divestment processes, share buybacks, and debt reduction.
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