Bluefield Solar Income Share Discussion Threads

[18bt] 07/4/2020 14:22

Is it just cos the sun is shining?

[masurenguy] 07/4/2020 14:10

Now back to end February pre-COVID crash levels ! :o)

[healthtech] 27/3/2020 17:13

NAV per share is 120.75p as of 31 December 2019.

[panshanger1] 27/3/2020 15:59

Apologies my mistake It's been a long couple of weeks !!

[masurenguy] 27/3/2020 15:01

Have you got a recent NAV figure ? The last one I saw was 116.6p - 6 months ago on September 30.

[panshanger1] 27/3/2020 14:53

And still on a reasonable disc to NAV Very rare for this trust

[masurenguy] 27/3/2020 14:51

Good to see a further rise of 3% today - taking this weeks rise to 8% - especially when the FTSE is experiencing a 6% down day !

[masurenguy] 25/3/2020 07:58

RNS Number : 4677H
Bluefield Solar Income Fund Limited
25 March 2020

Bluefield Solar (LON: BSIF), a sterling income fund that invests in UK-based solar assets, reconfirms its guidance of a full year dividend of 7.90pps for the financial year ending June 2020. This will be fully covered by earnings and post debt amortisation. Based on yesterday's closing share price the dividend yield on the forecast full year dividend was 7.05%.

Over 60% of the Company's revenues are regulated and non-correlated to market based power prices, increasing in line with RPI and with an average duration remaining of 15 years. The balance of revenues is derived from the sale of electricity via power purchase agreements (PPAs). The Company has 94% of its revenues contracted until the end of the current financial year, 88% of its revenues contracted until the calendar year end and 77% until the end of the financial year 2021, providing excellent visibility of earnings over the current and next financial year. The PPAs providers are investment grade entities. The Company has no subsidy free assets and no assets are in construction.

The Company's current leverage level is 32% (a combination of long term debt and short term credit facility) to Gross Asset Value. All long term debt is fully amortising over an average tenor of 14 years and is without the requirement for refinancing. The debt service cover ratio is over 2.5 times covered. The Company has also drawn GBP44 million from its short-term credit facility and is in place until 30 September 2022 (if the facility's one year extension is exercised by the Company).

As indicated in previous announcements the Company's policy of increasing the dividend in line with RPI in future financial years remains under review, especially in light of the recent fall in power prices.

[zero the hero] 23/3/2020 19:21

strutt12 as far as my understanding goes:

Total earning 18/19 = £40.7m x 19.12% to shareholders = £7.8m

Revenue through FITs = £4.3m

so Dividends the company are already paying out are far more than fit earns.

The company comment this regards depreciation:

The portfolio NAV will depreciate towards the end of the Company's life.

The Investment Adviser has been requested to model how the portfolio NAV will move with time, producing long term scenario planning for the Boards' review. The Board has authorised the Investment Adviser to negotiate lease extensions on all active plants, as each successful extension increases the life of the Fund and reduces the depreciation of the NAV.

Lastly the prices paid for Solar panels is reducing massively with the latest farms being self reliant on generation prices alone.

Happy to be corrected / educated

[strutt12] 23/3/2020 14:28

Masurenguy,

Thankyou I have already read this. The fact the panels may last longer, as I'm sure they will, it's the fit payments that will stop after 20yrs we then rely on the wholesale price of electricity which is way below current income.

The building of solar farms requires capital and so either debt will increase or funding will be required, this will then become just another solar farm producer and not an income stock.

[masurenguy] 23/3/2020 14:22

strutt12 - checkout the following.

"the company was taking a proactive approach, and returning to investing in the construction of solar farms. Wood said Bluefield was one of the first investors to fund assets through construction while listed peers would only buy solar farms that were built and operational. Although the landscape of subsidies was different then, he was confident non-subsidised solar farms were cheap enough to build so that the returns would ‘earnings efficient’." Citywire, 4/10/19

Furthermore, the productive life of solar panels is probably closer to 35/40 years than the 25 originally envisaged. See post #225

[strutt12] 23/3/2020 11:22

I'm very close to buying in here but have a question regards returns. As I see it you currently get paid a dividend for 20 years due to government subsidy on solar generation. the return is attractive but what happens after the fit payments stop? The assets will be 25yr old panels with little income so your capital will be lost? I'd appreciate your thoughts.

[spittingbarrel] 20/3/2020 12:02

I've bought back in, I think a vaguely index linked share is worth having in a world of helicopters.

[masurenguy] 13/3/2020 17:38

The FTSE closed 5366 today, which is 29% below its closing position at the end of last year on 31 December. BSIF closed at 130.0 today compared to 139.5 on 31 December, a decline of just 7% over that same period. It is currently my third largest holding, at 7.3% of my overall portfolio, so I'm a very happy holder and may well increase my stake if the price slips a bit further over the next few weeks.

[williamcooper104] 03/3/2020 09:21

It is v sensitive to discount rate - but in current low to no to negative yield environment moving the discount rate in is not unreasonable The question is what's the right discount rate for long term electisity price forecasts (IMO much wider than 6.50 percent) v the right discount for RPId ROCs (much much tighter than 6.50) Would be interesting to value the ROCs at say 3 percent to see what rate that would leave for power price forecasts

[a0002577] 25/2/2020 12:58

Well said, Pinsim, and well spotted.

[pimsim] 25/2/2020 09:35

That's a big drop in the discount rate, down from 7.18% to 6.5%. And note the sensitivity analysis:

When discount rate falls by -0.5%, the impact on fair value of Director's valuation is + £16.1m, impact on NAV per share 4.35p.

In other words, if they had kept the discount rate unchanged at 7.18% then the NAV would have been 5.9p lower than the published 120.75p.

[18bt] 25/2/2020 07:43

As usual, good clarity from the Chairman on the business model, valuation and risks of power prices over a timescale

[masurenguy] 25/2/2020 07:24

Current shareprice premium to NAV (December figure) is circa 10%. Projected yield for 2020 on yesterdays closing price is circa 6%.

Interim Financial Statements to 31 December 2019

Six months ended 31 December 2019
25 February 2020

Total operating income: £28,350,661
Total comprehensive income before tax: £27,677,999
Total underlying earnings: £20,708,427
Earnings per share: 7.48p
Underlying EPS available for distribution: 3.42p
Underlying EPS brought forward: 0.60p
Total underlying EPS available for distribution: 4.02p
1(st) interim dividend for the year ending 30 June 2020: 1.95p
Dividend Target for 2020: 7.90p (LY 7.68p)
NAV per share: 120.75p (LY 117.9p)

Chairman John Rennocks said: "The performance of the Company over the first six months of this financial year has once again been highly pleasing. The valuation reflects the lower end of the market conditions that have been with us for some time, and the strong earnings for the period have put the Company in an excellent position to once again deliver a sector leading dividend. Looking ahead, the Board understands the desire many shareholders have to see the Company grow again and so we look forward to updating you in due course with plans to enable the Company to continue to play a material role in the evolution of the UK's energy market."

[williamcooper104] 31/1/2020 13:51

Short/medium term you are right Long term JPM are right Question is how short is short/medium and how long is long And to that I have no clue Wish they'd just securitise their ROCs (unbelievably valuable) to leave a share price that was literally just power price risk

[williamcooper104] 31/1/2020 13:49

Usually solar farms don't own the land their on So will have to negotiate with the land owner for new lease (most out outside of the act so don't have any protection/security of occupation)

[11_percent] 31/1/2020 13:38

Was reading some previous posts and saw the below.

=============

What will happen to my solar panels after 25 years?

"The truth is we don`t really know – there`s not really a lot of data to look at since photovoltaics is a relatively new technology (the vast majority of all solar panels are less than 10 years old). However, from what we are seeing so far, we have reason to be excited. Here are a couple of interesting reports:
A 33W solar panel (Arco Solar 16-2000) actually outperformed it’s original factory specifications 30 years after it was manufactured.
World`s first modern solar panel still works after 60 years.
Kyocera has reported several solar power installations that continue to operate reliably and generate electricity even though they are nearly 30 years old.

The technology has improved, the solar panels on today`s market are more robust and durable. This is where it gets really interesting. What does all of this actually mean? The lifespan of a modern solar panel is far longer than the 20 years that we use to calculate costs and earnings. This basically translates into more money in your pocket. I would bet that a solar panel installed today would be up and running (and still generating a good amount of electricity) 30 – 40 years down the line."


=========

I am going to stick my neck out here and say...….although individual solar panels have a life...…...solar farms do not.

All panels in a farm will not fail.....all together, at 25 years.

They will fail individually, and can be replaced individually. I am thinking 2 guys and a fork lift truck...….and a supply of panels. Replace as they fail.