ENERGY STORAGE

Harmony Energy Income Trust cancels dividend and ponders sale of storage assets

June 3, 2024

Publicly listed energy storage developer Harmony Energy Income Trust (HEIT) has scrapped its quarterly dividend and said it is considering selling its portfolio after two of its key UK storage projects suffered delays to energisation due to “the balance-of-plant contractor running behind schedule.”

In a portfolio update, HEIT said it was cancelling the first FY2024 quarterly dividend and did not anticipate being in a position to declare a dividend for the remainder of the current financial year.

The company said its Wormald Green and Hawthorn Pit storage projects had suffered delays and that latest estimates “now assume these projects will commence commercial operations during Q3 2024”. It added that the company had begun to exercise its contractual rights to claim liquidated damages to compensate for the “lost revenue opportunity”.

In addition, with regard to its Rusholme project, HEIT said minor delays to the DNO’s [distribution network operator’s] connection programme had resulted in the proposed energisation date slipping into early Q3 2024. “The Company is working closely with Tesla to ensure that, post energisation, commissioning can be expedited so that the project is revenue generating as quickly as possible,” the statement said.

HEIT is also exploring the potential for “one or more asset sales”, the statement added. “ Having received informal expressions of interest from numerous third parties, the company has now engaged JLL with a mandate to seek offers for some or all of the company’s assets, in order to maximise value and demonstrate the continuing disconnect with the share price. Any decision to divest the entire portfolio would only be taken in the event of a deliverable and credible offer being received at pricing which the board considers attractive to shareholders, and any such sale would be conditional upon shareholder approval.”

Norman Crighton, chair of Harmony Energy Income Trust plc, said: “Revenue performance across the GB BESS sector has improved, with the company’s assets yet again showing strong performance relative to peers. However, the performance is not yet at a level where the board feel able to declare a dividend from operating free cash flow. The continued short-term uncertainty around the revenue environment over the second half of the financial year has prompted the board to adjust the company’s dividend policy while also engaging JLL in relation to potential asset sales.”

 

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