Blackrock Engy Regulatory News (BERI)

BLACKROCK ENERGY AND RESOURCES INCOME TRUST plc (LEI:54930040ALEAVPMMDC31)

All information is at 29 February 2024 and unaudited.

Performance at month end with net income reinvested

One

Three

Six

One

Three

Five

Month

Months

Months

Year

Years

Years

Net asset value

-0.4%

-1.7%

-4.8%

-9.6%

46.8%

91.7%

Share price

-3.8%

-3.9%

-7.2%

-19.2%

27.7%

77.2%

Sources: Datastream, BlackRock

At month end

Net asset value – capital only:

119.94p

Net asset value cum income1:

120.48p

Share price:

105.00p

Discount to NAV (cum income):

12.8%

Net yield:

4.2%

Gearing - cum income:

9.3%

Total assets:

£153.9m

Ordinary shares in issue2:

127,770,812

Gearing range (as a % of net assets):

0-20%

Ongoing charges3:

1.19%

1 Includes net revenue of 0.54p.

2 Excluding 7,815,382 ordinary shares held in treasury.

3 The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 30 November 2023. In addition, the Company’s Manager has also agreed to cap ongoing charges by rebating a portion of the management fee to the extent that the Company’s ongoing charges exceed 1.25% of average net assets.

Sector Overview

Mining

43.9%

Traditional Energy

29.8%

Energy Transition

26.8%

Net Current Liabilities  

-0.5%

-----

100.0%

=====

Sector Analysis

% Total Assets^

Country Analysis

% Total Assets^

Mining:

Diversified

23.5

Global

55.8

Copper

7.1

USA

16.9

Steel

2.9

Canada

9.5

Metals & Mining

2.6

Latin America

5.6

Gold

2.5

Germany

2.8

Industrial Minerals

2.2

Other Africa

2.6

Aluminium

1.9

France

2.4

Nickel

1.0

Australia

2.2

Platinum Group Metals

0.2

United Kingdom

2.1

Subtotal Mining:

43.9

Ireland

0.6

Net Current Liabilities

-0.5

-----

Traditional Energy:

100.0

E&P

13.6

Integrated

8.4

Oil Services

3.2

Distribution

1.6

Refining & Marketing

1.5

Oil, Gas & Consumable Fuels

1.5

Subtotal Traditional Energy:

29.8

Energy Transition:

Energy Efficiency

11.0

Electrification

7.2

Renewables

5.4

Transport

3.2

Subtotal Energy Transition:

26.8

Net Current Liabilities

-0.5

----

100.0

=====

^ Total Assets for the purposes of these calculations exclude bank overdrafts, and the net current liabilities figure shown in the tables above therefore exclude bank overdrafts equivalent to 8.8% of the Company’s net asset value.

Ten Largest Investments

Company

Region of Risk

% Total Assets

Rio Tinto

Global

4.9

BHP

Global

3.7

Teck Resources

Global

3.3

Shell

Global

3.2

Glencore

Global

3.0

Vale

Latin America

Equity

1.5

Bond

1.4

Canadian Natural Resources

Canada

2.7

Abaxx Technologies Inc

Global

2.7

NextEra Energy

United States

2.7

Filo Corp

Latin America

2.5

Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:

The Company’s Net Asset Value (NAV) fell by 0.4% during the month of February (in GBP terms).

February was a positive month for equity markets, with the MSCI All Country World Index rising by 4.2%. Resilient macro-economic data and strong earnings reports from top tech companies offset higher yields. Chinese equity markets had hit five-year lows coming into the month, however, activity data over the Lunar New Year holiday period strengthened, and the Chinese government announced a number of supportive interventions, which buoyed Chinese listed equities.

February was a challenging month for the mining sector, particularly relative to broader equity markets. Most mined commodities experienced price declines, appearing to reflect lower consumption levels in China as domestic activity slowed during the Chinese New Year holiday period. Ongoing property sector weakness in the country also contributed to the decline. China’s manufacturing PMI remained below 50 and fell marginally month-on-month from 49.2 to 49.1. For reference, prices for iron ore (62% fe) and zinc fell by 11.7% and 5.4% respectively, although nickel bucked the trend, rising by 10.3%. Meanwhile, the gold price remained stable but the other precious metals came under pressure, with silver and platinum prices falling by 2.1% and 4.0% respectively. The mining sector's reporting season demonstrated that companies are generally adhering to their capital allocation frameworks.  Operating cost inflation appears to have peaked; however, some capital costs remain persistently high. Lastly, delays to copper production growth were a notable theme which increased our conviction in supply-side tightness for the metal over the next few years.

Within the energy sector, oil prices were firmer on robust oil demand and positive refining margins. There was no reduction to apparent geopolitical risk with attacks on Red Sea shipping continuing. A warm winter in Europe has meant lower demand for imported liquified natural gas than might have been expected, whilst LNG exports from the US and Middle East have increased to replace lost Russian pipeline natural gas. Consequently, natural gas prices and European power prices fell during the month.  The US energy sector saw further consolidation with Diamondback’s merger with Endeavour Energy Resources and Chord’s acquisition of Enerplus. Against this backdrop, Brent and WTI oil prices rose by 1.9% and 3.9%, ending the month at $85/bbl and $79/bbl respectively. The US Henry Hub natural gas price fell by 13.1% during the month to end at $1.85/mmbtu.

Within the energy transition theme, the spotlight remained firmly on energy security. The IEA reported a further increase in energy related global carbon emissions despite the record level of renewable power installations in 2023, indicating the scale necessary to achieve the energy transition -For onshore wind power, COP28’s aim to treble renewable energy capacity by 2030 suggests a need to increase installed wind turbine capacity from ~1,000GW to over 3,000GW by 2030, a 20%+ per annum growth rate from the current ~90GW per annum rate for 2023. Within clean transportation, the Geneva motor show saw the launch of a number of mass market EVs with lower price points. For EVs to continue strong market share growth, increased choice of lower priced EV is an important step.

All data points in US dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.

26 March 2024

ENDS

Latest information is available by typing www.blackrock.com/uk/beri on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.