Octopus Renewables Infrastructure Trust (ORIT) reported a small decline in net asset value for the first half of 2025, as weaker power price forecasts and higher discount rates weighed on valuations, offsetting gains from macroeconomic adjustments and portfolio revaluations.

The trust delivered a total return on NAV of –0.2 per cent, compared with a 2 per cent gain in the first half of 2024. NAV stood at £540mn at 30 June, down from £570mn at the year-end. A dividend of 3.08p per ordinary share was declared for the period, in line with the full-year target of 6.17p.

Revenue remained stable, with 85 per cent fixed over the next two years and 47 per cent inflation-linked for the coming decade. The operational portfolio generated revenues of £68.7mn, unchanged year on year, and EBITDA of £44.3mn, broadly flat on the prior period.

The company continued its programme of share buybacks, repurchasing 12.3mn shares in the first half for £8.5mn at an average price of 66.9p. Since the period end, a further £6.2mn has been deployed, taking total repurchases since inception of the scheme to £21.6mn as at mid-September.

Asset sales remain on track to raise £80mn by year-end, while selective investments included follow-on commitments to Nordic Generation and BLC Energy and the conditional acquisition of Irishtown. A new five-year term loan facility was signed, allowing repayment of £98.5mn under the revolving credit facility, which was extended to 2028 and reduced in size from £270.8mn to £150mn. The average cost of debt across the portfolio fell to 3.5 per cent from 4.0 per cent, projected to save around £850,000 annually. Management reiterated its expectation of reducing gearing below 40 per cent of GAV by year-end.

The portfolio generated 654 GWh of clean electricity in the first half, little changed from a year earlier, with a strong solar contribution offsetting lower wind output. The company estimated it avoided 165,000 tonnes of CO₂ emissions, equivalent to powering 158,000 homes.

In August, the company announced a reduction in management fees effective from November, expected to save £0.7mn annually. The new structure will be based on an equal weighting of NAV and average market capitalisation.

Alongside results, ORIT launched ORIT 2030, a five-year strategy aimed at scaling the business to £1bn of NAV by the end of the decade. Priorities include disciplined investment in higher-return opportunities, expansion through both organic and inorganic growth, and delivering medium-to-long-term total returns of 9–11 per cent. The trust also intends to move to a three-yearly continuation vote cycle.

Phil Austin, Chairman of ORIT, said:

“During the first half we have delivered resilient operational performance, solid dividend cover, and taken clear action to enhance shareholder value through buybacks, a lower cost of debt, and the introduction of a reduced management fee.

“The investment case for renewables remains compelling and we are optimistic about improving sector sentiment. With 85 per cent of near-term revenues fixed or contracted and a growing share inflation-linked, ORIT is well positioned to deliver resilient income and long-term capital appreciation. Our new ORIT 2030 strategy provides a clear framework to build scale and sustainable shareholder returns.”

Below is an interview with ORIT fund managers David Bird and Chris Gaydon, filmed at the recent year end results