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 -0.4% -1.7% -4.8% -9.6% 46.8% 91.7%
value
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 1.5
Fuels
Subtotal Traditional 29.8
Energy:
Energy Transition:
Energy Efficiency 11.0
Electrification 7.2
Renewables 5.4
Transport 3.2
Subtotal Energy 26.8
Transition:
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 Canada 2.7
Resources
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.
