Investing.com -- Greencoat UK Wind (LON:UKWG)on Friday reported a slight decline in its Q1 2025 NAV to 150p per share, reflecting a 0.8% drop from the previous quarter, while the stock continues to trade at a 25% discount to NAV, presenting an implied upside despite recent underperformance.
The company’s cash generation remained strong, totaling £118 million, which translated to an increase of 5.3p per share, even though wind generation was 18% below budget during the period.
The decrease in NAV was driven by lower power price forecasts, which reduced NAV by 2.4p per share, and mark-to-market movements on interest rate swaps, which shaved off 0.6p per share.
Dividend payouts and depreciation accounted for further declines of 2.5p and 1.5p per share, respectively.
On the positive side, the share buyback program contributed 0.2p per share, and a higher inflation assumption added 0.3p per share.
Gearing stood at 40.2% of Gross Asset Value, slightly above its 40% limit, though the company emphasized that this does not affect debt covenants, as Hornsea 1 debt is excluded.
UKW also conducted a continuation vote at its AGM, with 10.5% voting for discontinuation, a slight improvement from the prior year.
Despite the challenges, RBC Capital Markets has revised its price target for UKW to 160p per share, down from 165p, reflecting the lower NAV estimates.
The new target still represents a 5% premium to NAV and implies a potential upside of about 42% from the current share price.