BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 31 March 2022 and unaudited.
For more information on BlackRock Energy and Resources Income Trust and how to access the opportunities presented by the energy and resources markets, please visit www.blackrock.com/uk/beri
Performance at month end with net income reinvested
| One Month | Three Months | Six Months | One Year | Three Years | Five Years | |
| Net asset value | 10.60% | 25.60% | 35.20% | 45.50% | 88.10% | 103.80% |
| Share price | 6.30% | 27.20% | 41.10% | 45.20% | 95.90% | 118.20% |
Sources: Datastream, BlackRock
| At month end | |
| Net asset value – capital only: | 130.49p |
| Net asset value cum income1: | 131.07p |
| Share price: | 127.00p |
| Discount to NAV (cum income): | 3.1% |
| Net yield: | 3.3% |
| Gearing – cum income: | 12.3% |
| Total assets: | £165.4m |
| Ordinary shares in issue2: | 126,165,391 |
| Gearing range (as a % of net assets): | 0-20% |
| Ongoing charges3: | 1.21% |
1 Includes net revenue of 0.58p.
2 The Company did not hold any shares in treasury as at 31 March 2022.
3 Calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation for the year ended 30 November 2021.
| Sector Overview | |
| Mining | 46.3% |
| Traditional Energy | 31.7% |
| Energy Transition | 24.6% |
| Net Current Liabilities | -2.6% |
| —– | |
| 100.0% | |
| ===== |
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | |
| Mining: | ||||
| Diversified | 24.9 | Global | 55.0 | |
| Industrial Minerals | 6.4 | USA | 18.9 | |
| Copper | 4.5 | Canada | 10.9 | |
| Steel | 2.9 | Latin America | 8.4 | |
| Gold | 2.3 | Australia | 4.4 | |
| Aluminium | 2.1 | Germany | 2.5 | |
| Nickel | 1.0 | Ireland | 0.8 | |
| Diamonds | 0.9 | France | 0.6 | |
| Iron | 0.8 | India | 0.6 | |
| Platinum | 0.5 | South Africa | 0.5 | |
| Subtotal Mining: | 46.3 | Other Net Liabilities | -2.6 | |
| —– | ||||
| Traditional Energy: | 100.00 | |||
| E&P | 15.6 | ===== | ||
| Integrated | 10.7 | |||
| Refining & Marketing | 2.3 | |||
| Distribution | 2.1 | |||
| Oil Services | 1.0 | |||
| Subtotal Traditional Energy: | 31.7 | |||
Energy Transition: | ||||
| Energy Efficiency | 8.9 | |||
| Electrification | 7.8 | |||
| Renewables | 4.6 | |||
| Transport | 3.3 | |||
| Subtotal Energy Transition: | 24.6 | |||
| Net Current Liabilities | -2.6 | |||
| —- | ||||
| 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 9.7% of the Company’s net asset value.
Ten Largest Investments
| Company | Region of Risk | % Total Assets |
| Vale | Latin America | |
| Equity | 5.6 | |
| Bond | 2.0 | |
| Glencore | Global | 6.9 |
| Shell | Global | 4.2 |
| BHP | Global | 3.7 |
| First Quantum Minerals | Global | |
| Equity | 2.6 | |
| Bond | 0.9 | |
| Anglo American | Global | 3.1 |
| Chevron | Global | 2.7 |
| Samsung | Global | 2.7 |
| RWE | Germany | 2.5 |
| EDP Renovaveis | Global | 2.5 |
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:
The Company’s Net Asset Value (NAV) per share increased by 10.6% during the month of March (in Sterling terms with dividends reinvested).
Russia’s invasion of Ukraine dominated headlines and impacted global stock markets, raising concerns around inflation and global economic growth. The implications from this war will be felt across many areas: food markets, commodity markets, disrupted supply chains, defence and energy policy. Ukraine and Russia are exporters of commodities ranging from wheat and cereal crops to iron, steel and food oils. Price inflation in the US and Europe has continued to accelerate, driven by the rising cost of goods and higher energy prices. In the US the Federal Reserve raised interest rates by 0.25% and indicated further rises to come.
Against this backdrop, mined commodity prices rose almost across the board on supply uncertainty. This was most apparent in the commodities for which Russia has historically been a significant exporter, such as nickel and palladium, with the nickel price for example rising by 30.1% during the month. Continued increases in global energy costs also put upward-pressure on some of the more energy-intensive mined commodities, such as steel, aluminium and zinc. Within the precious metals space, the gold price rose by 2.0% over the month as the metal saw ‘safe-haven’ demand, with notable investor inflows into physically backed gold ETFs.
The US release of 30million barrels of oil from the strategic petroleum reserve (SPR) at the beginning of the month was followed by the announcement later in the month of a much larger SPR release of 180m barrels, at a rate of 1m barrels per day, in an attempt to soften oil prices. OPEC maintained its policy of raising oil supply each month by 400k barrels per day (bpd). Germany entered into a long-term agreement with Qatar for liquified natural gas(LNG) in an attempt to reduce reliance on Russian gas imports. The International Energy Agency (IEA) have estimated that up to 3mbpd of Russian oil supply may be shut from April. Natural gas prices increased with US Henry Hub price up 28% at $5.64/mmbtu. In Europe natural gas prices remain above $30/mmbtu. The Brent and WTI (West Texas Intermediate) oil prices rose by 4.1% and 4.8%, ending the month at $107/bbl and $100/bbl respectively.
Within the energy transition theme, China announced eight major targets on energy, which include increasing power generation from renewables by 39% by 2025, primarily via wind and solar additions, whilst local lockdowns in China increased market concerns over potential supply chain issues. In Europe, where ~40% of energy is sourced from Russia, an increased focus on energy security caused investor interest in renewable energy companies. The REPowerEU proposal included key areas where the EU could act to accelerate renewables and reduce dependence on imported Russian energy.
For more information on BlackRock Energy and Resources Income Trust and how to access the opportunities presented by the energy and resources markets, please visit www.blackrock.com/uk/beri
