August 23 (Renewables Now) - John Laing Group Plc (LON:JLG) has put on hold further solar and wind investments in Europe and Australia, saying its renewable energy assets in these markets performed unsatisfactory in the first six months of the year.
The UK-based infrastructure investor will also limit US renewable energy investments to “where capital is being recycled from renewable energy disposals.”
"Our operational performance in the first half was strong, however we have had a number of challenges with our renewable energy assets in Australia and Europe. We delivered value enhancements across the portfolio, but predominantly in renewable energy, which has helped to mitigate the impact of these challenges,” commented CEO Olivier Brousse.
In Australia, the company experienced transmission issues on three of its renewable energy plants in January-June 2019, which resulted in a GBP-66-million (USD 80.6m/EUR 72.8m) write-down. This was only partially offset by GBP 29 million of recognised value enhancements, predominantly on renewables.
In Europe, the company recorded write downs of GBP 55 million because of operational performance issues at its wind farms, mainly driven by low levels of wind. About GBP 16 million of value enhancements, including GBP 14 million from renewables, just partially offset this.
These factors led to lower-than-expected growth of just 3% in net asset value (NAV), which rose to GBP 1.599 billion at June 30, 2019, from GBP 1.586 billion at December 31, 2018.
“New renewable energy investments have been put on hold in Europe and Australia, and limited to recycling of capital in North America, as we re-assess our approach to risk and return in these markets,” Brousse added.
Due to the reduction in fair value movement in the portfolio, profit before tax for the six-month period dropped to GBP 35 million from GBP 175 million.
(GBP 1.0 = USD 1.220/EUR 1.103)