US SOLAR FUND PLC (Alliance News) - US Solar Fund PLC on Monday said that its underlying portfolio has continued to improve over 2022, albeit inflation playing a negative role when it normally has a positive impact on the company.
The London-based investment company focusing on owning and operating solar power assets in North America said its portfolio demonstrated the lower operational volatility of solar generation assets, but warned that weather conditions in the first half of 2023 have been poor.
US Solar Fund said it delivered average annual dividend growth of 1.5% in every consecutive year since the portfolio became fully operational. However, it cautioned that it will issue revised guidance around any lower dividend targets if necessary. It expects its 2023 dividend to be covered with net operating cashflows.
It added: "Inflation, which generally has a positive impact on the company's net asset value by increasing expectations for future energy prices, is expected to negatively impact the company's short to medium term portfolio cashflows. This is a result of forecast increases in insurance, wage and equipment costs which may materialise on expiry of those related contracts versus the more stable revenue from USF's long-term power purchase agreements. Sustained high inflation should be expected to increase NAV but reduce near term operational cashflows and result in in reduced levels of dividend coverage."
The company will release its half-year results to June 30 in September.
US Solar Fund shares fell 2.2% to USD0.61 each on Monday morning in London.
By Tom Budszus, Alliance News reporter
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