BLACKROCK ENERGY AND RESOURCES INCOME TRUST plc
(LEI:54930040ALEAVPMMDC31)
All information is at 31 August 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 -2.3% -5.5% 9.4% 4.1% 45.4% 102.4%
value
Share price -3.3% -3.6% 12.6% 4.5% 46.5% 113.3%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 128.72p
Net asset value cum income1: 129.55p
Share price: 116.00p
Discount to NAV (cum income): 10.5%
Net yield: 3.9%
Gearing - cum income: 5.7%
Total assets: £158.5m
Ordinary shares in issue2: 122,369,497
Gearing range (as a % of net assets): 0-20%
Ongoing charges3: 1.19%
1 Includes net revenue of 0.83p.
2 Excluding 13,216,697 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 40.4%
Traditional Energy 30.8%
Energy Transition 29.1%
Net Current Liabilities -0.3%
-----
100.0%
=====
Sector Analysis % Total Assets^ Country Analysis % Total
Assets^
Mining:
Diversified 20.0 Global 52.4
Copper 6.5 USA 22.5
Gold 3.9 Canada 8.5
Steel 3.4 United Kingdom 3.6
Industrial Minerals 2.2 Latin America 2.6
Aluminium 2.2 Italy 2.2
Nickel 1.2 Australia 2.1
Metals & Mining 1.0 Other Africa 2.0
Subtotal Mining: 40.4 Finland 1.6
France 1.5
Germany 0.7
Ireland 0.6
Traditional Energy: Net Current Liabilities -0.3
E&P 10.9 -----
Integrated 8.2 100.0
Distribution 4.1
Oil Services 3.9
Refining & Marketing 2.4
Oil, Gas & Consumable 1.3
Fuels
Subtotal Traditional 30.8
Energy:
Energy Transition:
Energy Efficiency 12.5
Electrification 6.5
Renewables 5.1
Transport 2.8
Storage 2.2
Subtotal Energy 29.1
Transition:
Net Current Liabilities -0.3
----
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 5.3% of the
Company’s net asset value.
Ten Largest Investments
Company Region of Risk % Total Assets
Rio Tinto Global 4.4
Anglo American Global 4.0
Teck Resources Global 3.6
Shell Global 3.5
Glencore Global 3.5
Targa Resources United States 2.8
NextEra Energy United States 2.7
National Grid United Kingdom 2.6
Schneider Electric Global 2.5
Exxon Mobil Global 2.3
Commenting on the markets, Tom Holl and Mark Hume, representing the
Investment Manager noted:
The Company’s Net Asset Value (NAV) declined by 2.3% in August (in GBP
terms).
Overall, August was marked by a combination of economic slowdown,
geopolitical tensions and shifts in market sentiment, leading to a
volatile period for global equity markets. Growth fears were triggered at
the beginning of the month, when the U.S. jobs report for July showed a
rise in the unemployment rate to 4.3% from 4.1% and weaker-than-expected
monthly job creation. Those fears exacerbated a global risk-asset selloff
that began in July, driven by concerns over tech valuations and heightened
geopolitical risks. Another exacerbating factor was the Bank of Japan's
decision to raise its policy rate by 25 basis points, leading to an abrupt
unwinding of carry trade positions, which had relied on low Japanese yen
borrowing costs to invest in higher-yielding assets. Amid this backdrop,
global equity markets experienced a sell-off, volatility spiked, and
global bonds rallied. However, by the end of the month markets had
recovered as investors began to anticipate policy easing by the Federal
Reserve.
Within the energy sector, the prospect of slower economic growth,
particularly from China, impacted expectations around near-term oil demand
growth. On the supply side, oil production from Libya fell after
production was halted at certain oil fields, whilst events in the Middle
East continued to increase market concerns for the region. Hurricane Beryl
impacted LNG operations on the US Gulf coast, however higher levels of
natural gas storage lessened the impact on energy markets. The Brent oil
price fell by
1.5%, whilst WTI fell by 6.1%, ending the month at $80/bbl and $75/bbl
respectively. Meanwhile, the US Henry Hub natural gas price rose by 4.4%
during the month to end at $2.13/mmbtu.
Within the mining sector, it was another relatively flat month as negative
sentiment around China continued to drag on the sector. Indicators for the
country’s property market, such as average house prices and floor space
started, showed significant year-on-year declines. Mined commodities
delivered mixed performance with the iron ore (62% fe) price flat but
copper and gold prices up by 3.1% and 4.8% respectively. US dollar
weakness provided a tailwind for commodities, especially gold. The miners
concluded their Q2 earnings reporting season during the month which was
somewhat disappointing overall. However, positive takeaways included a
greater focus on M&A, stabilising operating costs and capital allocation
frameworks continuing to prioritise returning capital to shareholders.
Within the energy transition theme, a report by McKinsey & Company found
that despite the record renewables installations of recent years “only
about 10 percent of the deployment of low-emissions technologies globally
by 2050 required for net zero has been achieved”, highlighting the large
growth opportunity in the theme. In clean transportation, the J.D. Power
EV Index, which tracks the path to parity of EVs with gas-powered
vehicles, reached a historic high score in July of 56 on a 100-point
scale. One factor – interest – reached a high for the year with 28% of
new-vehicle shoppers saying they are ‘very likely’ to consider a EVs for
their next purchase. This compares to J.D. Power’s revised US EV market
share forecast of 9% for 2024, suggesting significant consumer willingness
to switch to EVs.
All data points in US dollar terms unless otherwise specified. Commodity
price moves sourced from Thomson Reuters Datastream.
16 September 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.
