The Renewables Infrastructure Group (LSE:TRIG) posted a larger-than-anticipated quarterly decline in net asset value, as softer power price assumptions and higher discount rates for UK offshore wind assets weighed on valuations, pushing the stock 2% lower on Monday.
The renewable energy investment trust reported that NAV decreased 5.2% to 104 pence per share in the fourth quarter, down 5.7 pence from 109.7 pence at the end of September. The move translated into a negative total NAV return of 3.7% for full-year 2025.
Management attributed the decline primarily to a 1.8 pence per share reduction linked to lower consultant power price forecast curves, alongside a 1.2 pence impact from a 50 basis point rise in discount rates applied to UK offshore wind projects. A further 1.8 pence per share drag stemmed from generation coming in below budget and operational challenges.
An additional 0.6 pence per share reduction reflected changes to indexation of UK Renewables Obligation Certificates (ROCs), which will now be tied to the Consumer Price Index rather than the previous benchmark.
Electricity generation was 5% below budget during the fourth quarter, largely due to economic and grid curtailment in Sweden. However, this marked an improvement compared with the first half of 2025, when output fell 10% short of plan. Sweden accounts for roughly 14% of TRIG’s portfolio by NAV and has persistently underperformed expectations, analysts said.
“While generation missed budget by 5% in Q4, this is an improvement versus the performance earlier in the year,” said Joseph Pepper, analyst at RBC Capital Markets, which maintains an “outperform” rating on the stock with a 90 pence price target.
“We think management’s target future cover of 1.1-1.2x looks credible given inflation-linked cash flows and an improving debt amortisation profile, although we note that Sweden remains a consistently underperforming geography in the portfolio.”
TRIG reiterated its dividend target for fiscal 2026 at 7.55 pence per share, unchanged year-on-year. Net dividend cover for fiscal 2025 was reported at 1.0 times. On a gross basis, excluding annual amortising debt repayments, dividend cover stood at 2.1 times. Management continues to guide toward net dividend cover of 1.1 to 1.2 times over the medium term.
The company had previously cautioned that dividend cover would be “tight” for fiscal 2025.
Shares closed Friday at 69.20 pence, implying a discount of about 34% to the newly reported NAV, broadly aligned with the peer group average discount of around 35%.
“Given the quantum of the quarterly movement this morning we would expect shares to trade lower today,” Pepper said.
TRIG’s portfolio includes approximately 90 renewable energy assets across six countries, with about half of its exposure in the UK, leaving it sensitive to domestic regulatory developments and wholesale power price trends. The trust primarily invests in operational wind and solar projects, with UK offshore wind forming a substantial component of its holdings.
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