RE: Trump subsidies - Leo (Ai)4 Feb 2025 14:10
“ While it’s quite likely in our view that this is a sector-wide over-reaction, SEIT has some specific differences in its business model compared to the peer group. First, the vast majority of SEIT’s revenues do not rely on any form of subsidy or incentive, and its projects are primarily rooted in their commercial attractions. In essence, SEIT provides its corporate customers with ways to save money through a combination of more efficient use of energy and more efficiently delivered energy, for example eliminating transmission losses by locating power generation close to where it is consumed. Second, SEIT has very limited merchant exposure, with most of its long-term revenues contracted, and low direct exposure to power prices. SEIT is really an equity investor in platforms that provide corporate customers with efficiency solutions, so it participates not only in the contracted revenues that come from these solutions, but in the growth of the platforms themselves. Third, SEIT’s project-level debt is mostly amortising and so is repaid over a period of time. Many of SEIT’s assets and investments extend well beyond the life of the debt, giving the trust different options in the future to enhance earnings. The team also point out that one of the first moves the new US administration made was the formation of a new Department of Government Efficiency, so ‘efficiency’ appears to be a positive theme in the US, which SDCL counts as its single largest country exposure at 67%.”
https://www.trustintelligence.co.uk/investor/articles/news-investor-results-analysis-sdcl-energy-efficiency-income-retail-dec-2024?utm_source=RNS&utm_medium=news
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