Greencoat UK Wind PLC (LON:UKW), Britain’s largest onshore wind farm investor, has said cashflows remained steady over the half-year to end June despite volatility in power prices caused by the coronavirus (COVID-19) pandemic.
Electricity generation for the period was 2% above budget at 1,494GWh though good wind conditions in the first quarter eased in the second three-month period.
Power prices were below budget, primarily reflecting low gas prices and low demand due to COVID-19, but dividend cover remained robust, said Greencoat UK.
Net cash generated by the group and wind farm SPVs (special purpose vehicles) was £71mln, covering dividends during the period by 1.3 times.
Fixed revenues represent 64% of projected 2020 revenue and 58% over the life of the portfolio. Net assets per share were the equivalent of 120.1p (2019: 121.4p) at the end of June, while the dividend of 3.55p is in line with the target of 7.1p for 2020.
In the half-year results statement, Shonaid Jemmett-Page, Greencoat UK chairman said: " I am pleased to report another good performance, which reflects the continued delivery of our simple, low risk and proven strategy. The cash-generative nature of our portfolio has enabled us once more to increase our dividend in line with RPI."
"During the period we invested £51 million into Slieve Divena II wind farm which increased our generating capacity to nearly 1GW. In addition, we announced a £320mln commitment to acquire South Kyle wind farm once it has been commissioned, expected to be in 2023.
"The pipeline of acquisitions remains healthy and with gearing at 26%of GAV, we are well placed to take advantage of the attractive growth opportunities available to us," he added.
Greencoat said it currently has a 4% share of UK wind farm capacity.
For the country to meet its net-zero emissions target by 2050, decarbonisation of the electricity sector, primarily through renewable generation, will be critical, it said.
“In general, the outlook for the group is very encouraging, with proven operational and financial performance from the existing portfolio, combined with a healthy pipeline of attractive further investment opportunities,” the group's chairman said.