BLACKROCK ENERGY AND RESOURCES INCOME TRUST plc
(LEI:54930040ALEAVPMMDC31)
All information is at 31 March 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 8.5% 1.5% 1.3% 0.6% 54.0% 99.1%
value
Share price 9.2% -0.2% -0.4% -9.2% 39.7% 88.3%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 129.38p
Net asset value cum income1: 129.54p
Share price: 113.50p
Discount to NAV (cum income): 12.4%
Net yield: 3.9%
Gearing - cum income: 12.3%
Total assets: £163.7m
Ordinary shares in issue2: 126,386,194
Gearing range (as a % of net assets): 0-20%
Ongoing charges3: 1.19%
1 Includes net revenue of 0.16p.
2 Excluding 9,200,000 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 44.8%
Traditional Energy 30.7%
Energy Transition 25.3%
Net Current Liabilities -0.8%
-----
100.0%
=====
Sector Analysis % Total Assets^ Country Analysis % Total
Assets^
Mining:
Diversified 21.8 Global 54.9
Copper 6.5 USA 19.8
Steel 4.3 Canada 10.0
Industrial Minerals 3.5 Latin America 4.3
Metals & Mining 2.7 Germany 2.5
Gold 2.5 Other Africa 2.5
Aluminium 2.0 Australia 2.2
Nickel 1.3 United Kingdom 2.0
Platinum Group Metals 0.2 France 2.0
Subtotal Mining: 44.8 Ireland 0.6
Net Current Liabilities -0.8
-----
Traditional Energy: 100.0
E&P 13.8 =====
Integrated 8.4
Distribution 3.4
Oil Services 2.7
Oil, Gas & Consumable 1.4
Fuels
Refining & Marketing 1.0
Subtotal Traditional 30.7
Energy:
Energy Transition:
Energy Efficiency 10.2
Electrification 7.0
Renewables 5.1
Transport 3.0
Subtotal Energy 25.3
Transition:
Net Current Liabilities -0.8
----
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 11.4% of the
Company’s net asset value.
Ten Largest Investments
Company Region of Risk % Total Assets
Rio Tinto Global 4.4
Teck Resources Global 3.9
Glencore Global 3.2
Shell Global 3.1
BHP Global 3.0
NextEra Energy United States 2.9
Anglo American Global 2.7
Canadian Natural Canada 2.6
Resources
Filo Corp Latin America 2.5
ConocoPhillips Global 2.4
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 8.5% during the
month of March (in GBP terms).
Global equity markets rose in March supported by central bank commentary.
The US Federal Reserve maintained guidance for three interest rate cuts in
2024, which was supportive for equity markets given US jobs data and CPI
indicated higher growth and stickier inflation than previously forecast.
Bond yields continued to react to these data, moving higher towards month
end. Economic survey data in Europe and China was consistent with economic
growth, further supporting equity market confidence. Geopolitical risk
remained elevated with continuing attacks on shipping in the Red Sea,
underlining the importance of energy security and resilient supply chains.
Against this backdrop, global equity markets, represented by the MSCI All
Country World Index, had increased by 3.1%.
March was a positive month for the mining sector, outperforming broader
equity markets. Improvements in economic data from the US and China helped
boost investor sentiment and demand for mining stocks during the period.
China’s manufacturing PMI rose above 50 for the first time since September
2023, increasing from 49.1 to 50.8. Copper stood out among industrial
metals, delivering strong performance driven by tight physical markets and
rising demand for its use in electricity grids. The severity of the
constraints on copper supply was highlighted by refining charges in China
falling close to zero, having been ~US$80 six months ago (lower refining
charges suggest refiners are struggling for materials and are cutting
charges to be more competitive as a result). On the other hand, ongoing
weakness in China’s property market started to translate into some
softness in steel demand and iron ore prices came under pressure. The
Chinese government announced plans to reinstate pollution control
measures, which is expected to result in production cuts for highly
polluting industries such as iron ore and cement. For reference, the
prices for iron ore (62% fe) and nickel fell by 13.2% and 6.2%
respectively, whereas zinc rose by 0.5%. Meanwhile, precious metals
performance was strong during the month due to concerns around inflation
and robust physical demand for gold. Gold, silver, platinum prices rose by
8.3%, 9.6% and 2.3% respectively.
Within the energy sector, sticky inflation and geopolitical risk was
supportive for commodities and commodity equities, where higher oil prices
are beginning to drive positive revisions to consensus energy earnings.
Refining margins remain above pre-covid levels suggesting demand strength
and tightness in supply, whilst Ukraine targeting Russian refineries was
also a contributing factor. M&A activity has remained a feature in the
energy sector in recent months and Exxon announced it was contesting
Chevron’s acquisition of Hess, which is going to arbitration, contributing
to share price volatility. Brent and WTI oil prices rose by 1.9% and 6.0%,
ending the month at $87/bbl and $84/bbl respectively. The US Henry Hub
natural gas price fell by 10.3% during the month to end at $1.76/mmbtu.
Within the energy transition theme, a number of large clean power utility
companies have held a capital markets days in recent months and during
March NextEra Energy announced increased investment in renewable power and
electricity grids. These capex commitments provide strong support to the
view that renewable energy installations may continue to see an
acceleration over the coming years.
All data points in US dollar terms unless otherwise specified. Commodity
price moves sourced from Thomson Reuters Datastream.
25 April 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.
