Octopus Renewables Infrastructure Trust H1 2026 Earnings Report

Octopus Renewables Infrastructure Trust EPS Results

• Actual EPS: GBX 2.79
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Octopus Renewables Infrastructure Trust Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Octopus Renewables Infrastructure Trust Announcement Details

• Quarter: H1 2026
• Date: 9/22/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, September 22, 2026
• Conference Call Time: 8:00AM ET

Octopus Renewables Infrastructure Trust (LON:ORIT) (“ORIT”) is an Impact Fund helping accelerate the transition to net zero. It is an investment company focused on providing investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of Renewable Energy Assets across Europe, the UK and Australia.

Octopus Renewables Infrastructure Trust H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Operating performance exceeded expectations: H1 revenue was 3% above budget and EBITDA was 6% ahead, supported by strong solar and offshore wind output, controlled costs, and improved curtailment compensation.
• Positive Sentiment: ORIT remains on track to pay its 2026 target dividend of 6.23 pence per share, with dividend cover rising to 1.38 times after scheduled debt amortization and 86% of near-term forecast revenue fixed or contracted.
• Negative Sentiment: NAV fell 5% in H1 to 86.2 pence per share, primarily due to a 10.1% reduction in long-term onshore wind generation forecasts, lower power price assumptions, and higher discount rates.
• Negative Sentiment: Gearing increased to 46.6%, above the approximately 40% medium-term target, despite lower absolute debt; management plans asset sales and potential refinancing to reduce leverage.
• Neutral Sentiment: Management said progress on ORIT 2030 acquisitions and asset recycling has been slower than desired, although it remains focused on selective construction-stage investments, disposals, and reducing gearing while targeting 9%-11% long-term returns.

Presentation

[Operator]

Good afternoon, ladies and gentlemen, and welcome to the Octopus Renewables Infrastructure Trust PLC investor presentation. Questions are encouraged. They can be submitted at any time via the Q&A tab that is just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish our responses where it is appropriate to do so. Before we begin, we would just like to submit the following poll, and if you could give that your kind attention, I am sure the company would be most grateful. I would now like to hand you over to the team from ORIT. Chris, good afternoon, sir.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Good afternoon, and good afternoon to everyone who has joined us today for this presentation of the interim results for ORIT. My name is Chris Gaydon. I am Co-Fund Manager. I am joined by David Bird, the other Co-Fund Manager, and also Jen, our Senior Portfolio Manager, and Charlotte, who leads the investor relations. For those of you who are unfamiliar with our strategy, ORIT develops, buys, builds, and operates renewable energy infrastructure across wind, solar, and complementary technologies. Operating assets provide sustainable income while construction and developer exposures create opportunities for capital growth. Diversification, contracted revenue, active asset management, and capital recycling support long-term value creation. So the question of why ORIT now? Well, first of all, the long-term tailwinds of affordability, security of supply, and mitigating the impacts of climate change remain firmly in place.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Second, we are also seeing a tangible improvement in the underlying performance of our assets as our improvement projects are taking effect. Third, we think that ORIT, where it is priced today, is an attractive entry point given the opportunity ahead of it. But what is really motivating us is the improvement in some of the macros. So across several of our markets, including the U.K. and Finland, we are starting to see increasing electricity demand as data centers and batteries are being built and electrification takes root. As these trends become established, we are hopeful that will lead to improvements in long-term power prices and reductions in capture price discounts. These are the themes that ORIT 2030 plays precisely into. The story of the first half of this year is one of resilient cash performance.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Both revenue and EBITDA were ahead of budget, and that has led to increased dividend cover of 1.38x, which is net of scheduled debt amortization. The financial performance was driven by strong asset performance across both solar and offshore wind. While it was a poorer period for onshore wind, which fell short of its updated production forecast. NAV total return over the period was negative 5%, primarily driven by the reforecasting of those onshore wind production estimates, coupled with lower power price forecasts and higher discount rates. On to the financial highlights. NAV was GBP 455 million, or GBP 0.862 per share at 30 June. The share price total return was positive at 13.7%, and while the discount narrowed during the period, it remains a key focus for us. Since IPO, NAV total return is 21.7%. Gross asset value at the period end was GBP 852 million.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

These figures underline the distinction between resilient operating cash flows and the reduction in long-term valuation assumptions. ORIT has a consistent record of increasing its dividend. We remain on track to deliver the FY 2026 target of GBP 0.0623 per share, which itself was a 1% increase on 2025. H1 dividend cover has increased to 1.38x after scheduled debt amortization, and it would be 1.91x gross of that scheduled debt amortization. Keeping the dividend fully covered remains a clear priority because we know just how much this matters to shareholders. With that, I will hand over to David to cover the operational results.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Thank you, Chris, and good afternoon, everybody. I am going to cover the results for the company as a whole, looking at the entire portfolio, and then I will dive into a little bit more detail on a technology-by-technology basis. The figures you can see here are on an actuals versus actual basis for the first six months of the year. What that means is, although we sold the Crossdykes Wind Farm and a 49% stake in the Breach Solar Farm at the end of last year, we have not adjusted the historic comparatives for that. You can see that even with that reduction in capacity, that actually revenue and EBITDA in the first six months of the year was only very slightly below what we saw in the equivalent period last year.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Total output, including the impact of compensated generation, was 614 GWh, which was around 1% below budget. Within that, solar was 3% ahead of budget, offshore wind 5% ahead, whilst onshore wind was 6% below the updated budgets. When I refer to updated budgets, the figures we are presenting here are reported against budgets which have been updated to reflect the revised onshore wind generation forecast, which were incorporated into our valuations at the end of June. Notwithstanding, the output was very slightly below budget. The portfolio nevertheless delivered revenue that was 3% ahead of budget and EBITDA 6% ahead. That reflects the fact that parts of the portfolio were able to benefit from higher power prices and that costs were controlled well. Looking across the entire portfolio, what we can see year on year is a consistent improvement in the weather-adjusted compensated generation.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Where we are able to control the performance of the assets, we are seeing that trend improve year on year, and that continued into the first 6 months. Looking now specifically at solar, the portfolio generated 271 GWh, which was 3% ahead of budget in the first six months, and that delivered revenue of just over GBP 30 million, an EBITDA of GBP 22.3 million. The key driver of the above budget generation was strong solar irradiance across all of our markets where we have assets, that being Great Britain, Ireland, and France. We also benefited from a significantly lower amount of grid constraint in Ireland than we had previously forecast and certainly less than in the equivalent period last year.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

What is important to note about our Irish valuations and forecasts is that we are not assuming any benefit from an ongoing European court case, which could lead to a greater proportion of both historical and future reduction from grid curtailment being compensated in the future. Overall, the performance of the solar portfolio demonstrates once again the value of our technological diversification, providing robust output when wind conditions have been more variable. Moving on to the onshore wind portfolio. The assets generated 263 GWh, including the effect of compensation. Here, the weather patterns were more of a mixed bag. In Scotland, where our Cumberhead wind farm is located, the wind speeds were relatively strong. However, this was more than offset by lower than forecast wind speeds in France, Germany, and Finland. The main technical availability issues on the fleet arose in Finland at the Saunamaa and Suolakangas assets.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

However, those technical issues have now been resolved, and the majority of lost production will be eligible for recovery from warranties we benefit through the long-term operations agreement with the turbine supplier. The single largest source of lost production on the onshore wind portfolio was economic and grid curtailment. However, this was largely compensated. Compared with prior periods, we have seen significantly improved recoveries from this form of curtailment, particularly in Germany. On the offshore wind asset, which is the Lincs wind farm in the North Sea, we generated 80 GWh, which was 5% ahead of budget, mainly caused by particularly strong wind speeds in the North Sea in this six months. With that, I will hand over to Jen to talk through the valuations.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

Thanks, David. I will now talk to the portfolio valuation and step through the key movements, and I will be moving across left to right across the valuation bridge. The NAV at the 30th of June was GBP 454.7 million, or GBP 0.8618 a share, and that compared with GBP 494.99 and GBP 0.9379 at the start of the year.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

There were three principal value detractors during the period, and they were the energy yield review, which reduced NAV by GBP 0.058 per share, higher discount rates, which reduced NAV by GBP 0.02 per share, and updated energy market assumptions, including power prices, which reduced NAV by GBP 0.016. I will cover each of these three in turn on the next couple of slides. These were also partly offset by GBP 0.049 from the expected portfolio return and other asset-level movements, together with a GBP 0.011 uplift from revised end-of-life assumptions.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

Updates to macroeconomic assumptions also provided a further small uplift of GBP 1.5 million or GBP 0.003 per share, and this was slightly near return inflation assumptions and movements in the value of FX hedges being partly offset by adverse spot FX, higher interest rates, and revised French local tax assumptions. So before any PLC and Holdco movements, the NAV was GBP 0.907 per share, and then the dividend financing costs and running costs at the fund level then reduced this to GBP 0.862 per share. After taking account of dividends paid in the period, the H1 NAV total return was minus 5%. Going into the onshore wind energy yield review in a little bit more detail, this was the largest movement, and it did reflect a comprehensive review of long-term energy yield assumptions across the operational onshore wind portfolio.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

These assets now have significantly more operating history than when they were first acquired and brought through construction. We therefore reassess the long-term generation using actual performance data, updated technical analysis, long-term weather information, and engineering judgment from our internal asset management team. The reduced forecast long-term onshore wind generation reduced by 10.1%, and this is equivalent to 4.7% of forecast generation across the entire operating portfolio. The resulting NAV impact was a -GBP 30.4 million or GBP 0.058 per share. The update to the long-term yield, though it does reflect a structural long-term generation expectations rather than an adjustment for the weaker wind experienced during H1 2026. The largest reductions did relate to the Finnish and German wind portfolios. It is worth noting that now the entire onshore wind fleet is now valued using their actual operating history and the latest technical evidence.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

No equivalent update was made for our onshore wind asset, where mature operating assumptions were already used, and all for solar, where performance remains broadly in line with or slightly above the current yield forecasts. The reduction is disappointing, but this does give us a much more robust basis for valuing the portfolio going forward and much more reflective forecasts. A separate review of end-of-life assumptions and the valuations provided a partial offset elsewhere in the NAV bridge, and this increased value by GBP 5.7 million or GBP 0.011 per share. Of that GBP 5.7 million, GBP 3.3 million came from extending the assumed operating lives of some of the onshore wind assets. Where we have extended those lives, we have applied an additional 500 basis point discount rate premium to those cash flows. A further GBP 2.4 million came from updated decommissioning assumptions, again, for selected assets.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

Talking quickly to power prices and other energy market assumptions, changes to these reduced NAV by a net GBP 8.6 million or GBP 0.0164 per share. As shown on the slide, there was an GBP 11.2 million reduction from the combined effect of lower medium to long-term power price forecasts, and this was mostly in the U.K. and Ireland and other energy market assumptions such as updates to green certificates and capacity market forecasts. This was partially offset by a GBP 2.6 million uplift from higher short-term forward prices. On discount rates, these were updated following a review of the latest market and transactional evidence, transaction benchmarks, and the current financing conditions. Rates increased by 25 basis points across the Irish, French, and German assets and by 50 basis points for the Finnish wind portfolio. This reduced NAV by GBP 10.6 million or GBP 0.02 per share.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

The portfolio-weighted average discount rate used in the valuations increased from 7.8%-8.3%, and after allowing for the expected returns from development stage investments and the additional leverage from the RCF, the adjusted average discount rate increased from 8.2%-8.8%. With that increase, the immediate effect is a lower NAV, but the higher rates also indicate a higher expected return from the portfolio at the current valuation. Lastly, on debt and gearing. The valuation movements have had an effect on the gearing percentages shown on this slide. On a look-through basis, the total debt reduced by GBP 5.3 million during the period to GBP 396.8 million. Project-level term debt reduced by approximately GBP 20 million through scheduled amortization and prepayments, but this was more than offset by an increase in RCF drawings while the UK Holdco facility remained unchanged.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

However, despite the reduction in absolute debt, gearing has increased from 44.8%-46.6%. This was mainly because of the reduction in the portfolio’s gross asset value. The debt in place remains predominantly long-term project finance, so the average cost of debt is 3.5%. The remaining average term is 9.3 years, and approximately 72% of the total debt is hedged. It is worth noting that gearing is currently above our approximately 40% medium-term anchor.

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

Reducing the gearing level does remain a priority, and future asset sale proceeds will principally be applied towards debt repayment alongside the natural amortization on the project-level debt. We are also considering a wider refinancing of certain project-level term loans, and we will be looking to start this process moving for the remainder of 2026 into 2027. This should improve flexibility for the management team in delivering the ORIT 2030 strategy. With that, I will hand back to Chris.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Great. Thanks, Jen. Turning to the portfolio, I will cover its diversification, revenue protection, active management, and the role of our developer investments. At 30 June, ORIT owned 39 assets with 740 MW of capacity across five countries and five technologies. Diversification by geography, technology, and asset stage reduces reliance on any single market or renewable resource. These figures exclude the Irishtown project, which is the last part of our Ballymacarney solar complex in Ireland, which remained a conditional acquisition at the end of the period and will be added to the portfolio in the months ahead. The total value of investments was GBP 856 million at 30 June. The portfolio is diversified across the U.K. and continental Europe, with solar representing 50%, onshore wind 32%, and offshore wind 13%.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Operational assets account for 95% of the portfolio and developer investments at 5%, preserving a strong income base alongside the future growth opportunities that our developer investments bring. Some 86% of forecast revenue over the next two years is fixed or contracted. This provides strong near-term cash flow visibility and reduces exposure to short-term power price movements. The remaining variable exposure preserves some participation in future power price upside. Over the next 10 years, 42% of forecast revenue is inflation linked. This provides a degree of protection against rising costs and supports ORIT’s progressive dividend policy. Together with the high level of contracted revenue, it strengthens the resilience of our income profile. Active management continues to improve performance and reduce costs across the portfolio.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

At our Leeskow wind farm in Germany, proactive curtailment management secured compensation for an additional 1.2 GWh in the first half of this year, a 95% improvement on previous periods approach. At Breach, lower network tariffs are expected to reduce FY 2026 import electricity costs by around 16%. We are also assessing aerodynamic upgrades, power-up rates, reserve services, battery co-location, hybridization, and repowering across the portfolio. Our developer investments are capped at 5% of the portfolio and give ORIT earlier, often preferential access to future projects. ORIT currently has preferential rights over a pipeline of around 3 GW across several technologies and markets. Just as a reminder, we do not have the obligation to invest into those projects. Rather, the option should have worked for our capital allocation strategy.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

In terms of performance in the underlying platforms, our solar developer in the U.K., BLC, has achieved planning success on its first project with another four projects expected to receive their decisions shortly. We are currently working with the grid operator in order to secure an attractive grid connection date. These development platforms support access to construction-ready opportunities from 2027 while allowing capital to be deployed selectively and only when the expected return justifies that risk. Lastly from me is impact. ORIT is an Article 9 impact fund and positive environmental and social impact continues to be integral to the investment approach. During the period, the portfolio generated enough clean electricity to power an estimated 153,000 homes over a year and avoided around 154,000 tons of carbon emissions. But of all the impact work we do, it is the local community projects that we find the most motivational.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

During the period, we established Lab 45, an educational program designed to inspire kids to engage with the energy transition. We have worked with over 1,000 students at secondary schools near our wind farms, helping them develop and pitch their own sustainability-focused ideas. It has worked so well that all the participating schools have asked us to come back next year to repeat the program. With that, I am going to hand back to David to conclude.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Thanks, Chris. Before we wrap up, I just wanted to step back and reflect on how we see the renewables market more broadly. Clearly, in the listed sector, there is still an issue with steep discounts and while discounts have improved over the course of this year, they are still wide and something needs to change there. But if you look at the sector more broadly, the underlying case for renewable infrastructure remains very strong. Renewables, together with battery storage, remain the lowest cost source of new electricity across almost all markets. Energy security and electrification continue to mean that bringing that new supply of electricity is going to be essential. Electrification and also the increasing level of demand from data centers, particularly with the high consumption required for AI, mean that there is going to be a continued increase in demand.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

As Chris mentioned earlier, after a number of years where electricity demand has been fairly flat or declining with energy efficiency, we are now starting to see demand tick up as electrification of heat transport and that new demand from data centers starts to ramp up. To meet that new demand, we are going to need significant investment in this essential lowest cost infrastructure, which is renewable generation and storage. That aligns entirely with the strategy for ORIT 2030. Moving on to the ORIT 2030 strategy, the 9%-11% returns that form a core pillar of the strategy require us to deliver capital growth through making new investments, as well as managing gearing through very active approach to asset recycling.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

It is fair to say that in the first half of the year, progress on both of these fronts has taken a little longer than we would have liked, but we have been progressing a number of opportunities behind the scenes. We have had to be disciplined, and a couple of opportunities that we took a long way through diligence ended up raising findings that meant that the risk-adjusted returns were not where we needed them to be. We were not able to successfully renegotiate the deal to make the numbers work for ORIT investors. We showed that discipline. We walked away from some of those opportunities. We still do have a very active pipeline, and indeed, there are new acquisitions focused on that construction stage and the capital growth that can come with it that we hope to share news with the market on in the very near future.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Meanwhile, on the asset sale side of things, we have a number of processes underway, and those proceeds not only will allow us to invest in those new construction opportunities, but will also enable us to bring gearing down below that 40% anchor point. Moving on to dividends and the GBP 0.0623 per share target dividend for FY 2026 remains on track to be met and to be fully covered by the operational cash flows from the portfolio. Overall, the foundations that we are laying here in 2026, which is really a transitional year for the ORIT 2030 strategy, should put us in a good place to be able to support continued NAV growth as construction stage investments move into operation from 2027 onwards.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

In summary, looking at the period, the operating portfolio has shown resilient output with generation broadly on budget and revenue and EBITDA ahead of budgets, leading to the cash performance that covered the dividend 1.38x after all scheduled debt amortization. Meanwhile, on the valuation side of things, clearly the energy yields review has had a negative impact, but this does now mean that the valuations have a more robust basis, allowing us to deliver stable and growing NAV from here on in through our construction work. Conviction in ORIT 2030 has not changed.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

We still believe this is the right thing for investors over the medium to long term, and our immediate focus is now on delivery, on completing these growth investments, completing the asset sales, allowing us to reduce gearing towards that 40% anchor, and continue to grow and cover the dividend. With that, I think we are ready for questions.

[Operator]

Perfect. Guys, if I may just jump back in there. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that is situated on the right-hand corner of your screen. But just while the company take a few moments to review those questions that have been submitted already, I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboards. Guys, we have received a number of questions, so Charlotte, at this stage, if I may hand over to you to chair the Q&A with the team, and if I pick up from you at the end, that would be great. Thank you.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Thanks, Jake, and thanks, team. I am going to read out the questions one by one. The first one: The performance of ORIT has been disappointing versus our peers. At what point does the board and manager consider that combining with a larger operator will deliver more shareholder value?

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Shall I start on that one?

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Yeah.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

I think we recognize that the share price performance has been disappointing. I would not agree that the broader operational and financial performance has been an outlier in the peer group. I think it is fair that our share price discount is, it is not the widest, but it is towards the wider end of those vehicles that are in ongoing operations and not in wind down. Obviously, the board, we cannot speak for the board here, but I do know from not only the regular board meetings we have with them, but the very frequent conversations we have with the board on almost a weekly basis that the discipline at the board on thinking about what is the right thing for investors and what are all the options available to them has not wavered over the past couple of years.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

No, they are also very happy to hear feedback from investors as to what might be the right thing to do. From our point of view as a manager, when we launched the ORIT 2030 strategy 12 months ago, that was on the basis that we think it is what allows us to deliver the best medium to long-term outcomes for shareholders. We have always had a focus within ORIT and within ourselves, Octopus Energy Generation as manager, on having a portfolio that is diversified across a range of technologies and geographies, and on delivering investments, not just by acquiring them once they are operational, but by actually adding value through construction and through development. That is something that we have delivered historically. We have also delivered a very significant proportion of successful recycling out of the portfolio compared with the peer group.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

I do not feel that the ability of the manager is a constraint on shareholder outcomes. Ultimately, what happens in the long term will be something that the board will continue to consider. But I do not think it is fair to say that operational or financial performance has been behind the peer group.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

If I might just add, Octopus Energy Generation, we manage just shy of GBP 9 billion across the various renewable energy and energy transition-focused strategies that we have. We have a team of around 160 people, and ORIT benefits from this deep technical knowledge that we are able to have in that team because of the scale of our fund management business, and it also benefits from the buying power that that size portfolio provides.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Thank you. Moving to the NAV bridge chart, we have some feedback that is a little confusing. We will take that feedback away and look at the presentation of that. There is one question on the NAV bridge chart, which is, can you explain what balance of portfolio return means in that NAV bridge?

[Jen Legg, Senior Portfolio Manager at Octopus Renewables Infrastructure Trust]

Yeah, I can take that. The balance of portfolio return, that line chart on the bridge is a few things. The majority of that, GBP 0.036 out of that GBP 0.049, is what we call the expected return on the portfolio. Most of our operating assets are valued on a discounted cash flow, where we are discounting future cash flows. So that valuation movement primarily represents the time value of money as the assets moved six months closer to the receipt of those future cash flows. The remaining amount within that bucket is a number of much smaller minor asset level adjustments to OpEx and CapEx that are not material enough to bring out on their own.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Great. Thanks, Jen. Question on return thresholds. What return threshold does the final stage investment need to achieve to justify investing rather than reducing debt?

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

I will start on this one. We have been very clear with ORIT 2030 that we are looking to deliver a 9%-11% total return over the medium to long term. The majority of that return will be underpinned by dividends, but there will also be an element of capital growth that will be needed to deliver that. We obviously have the running costs of the vehicle that run at a little over 1%, so we need to be delivering 10%-12% from the portfolio in order to hit that. So when we are looking at new investments, that is the target that we have in mind. We also have to bear in mind, firstly, what is the return on the assets we already have, because ultimately, to fund those new investments without increasing gearing in the long term, we will need to recycle out of older investments.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

We have to be delivering a higher return than, on average, around 8.8% we are getting from the current portfolio. It has to be high enough that over a medium-term hold period, we can expect to deliver 10%-12%. It is important to note that here we are looking at medium to long-term returns, but we are not necessarily looking at an asset that has to deliver 10% or 12% over 40 years. We do expect to be active in how we are managing the portfolio. By focusing on those assets that their long-term hold-to-maturity returns might still be in the high single digits, but there is a lot of gains that we can crystallize in the first three, four, five years of investment through successfully delivering construction or perhaps by improving the revenue contracting of the asset.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Those are the ones that should be able to meet that hurdle and on a, say, a five-year time horizon, deliver that 10%-12% that is needed to hit the 9%-11% return target.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Thanks, David. Couple questions on discount. I will read each of them. I realize that the discount issue is an industry problem as much as it is yours. Is this a solvable problem? Realistically, what can be done both by you and by the industry, and perhaps regulators, to reduce the discounts? A separate question, but on the same topic. Is there a plan for reducing the large discount or share price net asset value per share? Share buybacks? Allowing shareholders to sell via quarterly tender offers at a price close to net asset value per share?

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Shall I start off again?

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Yeah.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Look, I think we have seen discounts improve a little bit over the past nine months or so. There is still clearly room for a lot of further improvement. One of the challenges there has been in the sector for some time now is a lot of investors who first came into the sector when fixed income really wasn't delivering much in the way of yield, and now there are other ways that you can get income beyond this sector. That has created a bit of a supply and demand mismatch where a lot of people who invested in the period of very low interest rates have now been looking to cycle out of the sector. There is probably more to be done still in closing that supply and demand gap.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

That likely means that there needs to be further reduction in the size of the sector in terms of how many vehicles there are out there. That is something we've started to see already. It's something that, again, we've been clear on with our ORIT 2030 strategy, that we see a role for ORIT as being one of the consolidators in combining with other vehicles to form a larger, more liquid vehicle, but also with some capital exiting the sector to close that supply and demand gap. There's no guarantee that that will happen. We think that we can, from the starting point we're at now, still deliver compelling returns to investors, even if those sort of bigger sectoral challenges don't resolve themselves.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

To do that, clearly, we need to keep paying an attractive dividend and grow NAV, and then even if the discount doesn't narrow in the way we hope it would, investors are still seeing attractive returns from where we are right now. In terms of regulators, there have definitely been challenges over the past few years, things around cost disclosure, which do seem to be improving now. There's also broader question marks around the U.K.-listed sector outside just investment trusts. Conversations around removing stamp duty that maybe would help attract more capital into the sector. We've seen a lot of work from government trying to encourage U.K. pension schemes to invest more in U.K. real assets and in U.K. stock markets. Vehicles like ORIT would be a way that they can achieve both of those things.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Even with our diversification, we have around 40% of the portfolio in the U.K., and we are a U.K.-listed entity. There are some things out there that could improve things for the sector. I think from our point of view, the focus is on delivering the best returns we can from the portfolio and from our active management of that portfolio, as much as sort of the externalities. When it comes to the sort of second question around buybacks and tender offers, clearly those forms of capital allocation are things that the board is constantly reviewing as to whether they are a better option compared with what we have set out as our ORIT 2030 strategy.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Where things stand with the discount level as it is, over a three, four, five-year period, we still see investing for sustainable capital growth as a better long-term outcome for shareholders than buybacks. Principally because the buybacks would still need to be funded either by increased gearing or asset sales, which eventually leads either to a shrinking of the vehicle or an increase in gearing, which challenges the ability to keep paying out well-covered dividends. If the discount was 40% or 50%, that dynamic could shift. But at where we are today, at sort of high 20s of discount, the strategy that we've set out with ORIT 2030, we still think offers better overall shareholder returns than the alternatives, such as buybacks.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Great. Thank you, David. Question on subsidy contracts. What is the maturity schedule of subsidy contracts, ones that may move to merchant pricing?

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Oops, sorry, slight technical issue there. Were you trying to jump in or was that just-

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

No.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Okay. Sorry. If you look at our subsidized assets, those are principally the U.K. ROC solar assets. We also have French feed-in tariff solar assets and wind farms in France and Germany that benefit from 20-year CFDs. You can see from the shape of the slide that I've put up, hopefully that people can see what the profile of those is. The first time that subsidies start to roll off is for our French portfolio, where the feed-in tariff comes to an end in around 2032 for most of those assets. Then for our U.K. ROC assets, the Lincs offshore wind farm is at a similar time, and then our solar comes in around 2033 to 2035. The revenue mix becomes significantly more merchant in the mid-2030s.

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

You can see we still have a decent base of fixed revenues there because we've got some of those 20-year CFDs. Also we have a track record of putting in long-term corporate PPAs. We've put in place 10 and 15-year PPAs on our portfolio, and that's something that we'd expect to keep under review and be able to keep extending out that base of fixed revenues into the future to give us confidence on dividend cover. We would expect to keep some level of merchant exposure because it does create, we think, quite a nice natural hedge with some of the drivers of other things such as inflation and discount rates. Excuse me.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Thanks. Question on asset recycling. You said that further asset recycling is a priority for the second half and that proceeds will principally be used to reduce gearing towards 40%. Can you give us some indication of the timing of the current sales processes and importantly, what level of pricing relative to the June NAV you would regard as acceptable given the NAV has just been rebased using higher discount rates and updated operating assumptions, should shareholders reasonably expect disposal to validate NAV at around book value?

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Okay. As part of our active management of the portfolio, we are running more than one sales process for some of the assets in our portfolio. In terms of the timing, I would expect to see fairly frequent asset sales over the months and years ahead. But for the initial ones, we are hoping that we will have the first one done well within the next six months. Let's just go through this question. In terms of the pricing of those asset sales, I think it's fair to assume that the June NAV is the benchmark price that we are targeting across all of those sales. We do, of course, seek to beat NAV, wherever possible. We've done that multiple times in the past. So I think that covers off that question there.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Yep. Thanks, Chris.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Yes.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Question, what is the rationale for considering floating wind and biofuels or e-fuels in Canada, which seem higher risk and where ORIT is not currently present?

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Yep, sure. We put in place a 5% allocation towards developers, and the two headline rationales for that were that we expect an attractive return, risk-adjusted return on that spend. We want to get access to the pipeline. The third reason why we invest in developers is because we can put a relatively small amount of capital at play in those technologies that we think will be particularly important in a decarbonized energy system of the future. We invested into Simply Blue Group back in 2021, and at that time, Nova Sustainable Fuels was actually part of that same business. The attractiveness of floating offshore wind, we still strongly believe in that thematic today. You can get bigger turbines, you can maintain them in a port, and you can put them further out at sea where they do not impact the landscape, and they can access higher wind speeds.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Development continues at pace. We have recently taken on investment from a big Japanese utility. The team have recently won a CFD in the recent AR7 allocation round for a project in the Celtic Sea. There is good progress. We have also looked to minimize or slow down our spend in that platform because we feel that the development timelines for floating offshore wind are probably longer than what we would like within the ORIT portfolio. Nova Sustainable Fuels is a project that spun out of Simply Blue Group, and we retain a residual stake in that. Progress on that project continues fairly quickly, actually.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Thanks, Chris. A final question that has come in, is the board or management team buying shares with the current discount to NAV? I do not think there have been any board director declarations. Do the team want to comment on this?

[David Bird, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Certainly I have bought shares within the last 12 months. I do not think we have disclosed any sort of specifics on team holdings, but certainly a material chunk of my investment portfolio outside my private domestic property is in ORIT shares. Certainly, I bought at discount levels lower than this back when discounts first appeared in 2022 and 2023 as well. From a personal point of view, I have seen value in the shares at these discount levels. We also actually have other products managed within Octopus Energy Generation that have also invested in ORIT shares as well. The short answer to the question is, yes, there has been buying at even narrower discount levels than this from the board and management team historically.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Yeah. And I would only add that those comments apply to me as well.

[Charlotte Edgar, Head of Investor Relations at Octopus Renewables Infrastructure Trust]

Great. Thank you. That does end the questions. So with that, I will just hand to Chris to wrap up.

[Chris Gaydon, Co-Fund Manager at Octopus Renewables Infrastructure Trust]

Okay. Thanks, Charlotte. So really just wanted to say thank you for taking the time to attend. We always appreciate hearing directly from our investors, so if you do have any questions, please email us at orit@octopusenergygeneration.com. All of our contact details are on our website. And with that, we hope you found this session useful, and I hope you enjoy the rest of your day. Thank you very much.

[Operator]

Perfect, guys. If I may just jump back in there, thank you very much indeed for addressing all of those questions that came in and for updating investors this afternoon. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback. On behalf of the team of ORIT, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you.

Participants

Executives

• Chris Gaydon, Co-Fund Manager
• David Bird, Co-Fund Manager
• Jen Legg, Senior Portfolio Manager
• Charlotte Edgar, Head of Investor Relations