Monthly reporting of REDSIDE funds for the period 11/2022
In November 2022, the appreciation of the NOVA Real Estate fund reached a value of 0.41% and thus the total appreciation since the beginning of the year is 6.61%.
During a regular visit to our industrial park in Trenčín, we ceremoniously opened a workout field, which is available not only to the employees of our tenants, but also to the general public. We are happy that with this project we are contributing to the improvement of the well-being of our partners and at the same time bringing something positive to the local community.
During the month of November, two smaller units in the Smíchov Gate building were leased or extended - this is a company operating in the electrical field, the extension concerns a long-term tenant and fitness operator Bodybody.
The real estate portfolio maintains an occupancy level of 98.5%. We assume that this indicator will only improve next year, as tenants whose contracts expire next year have already indicated an interest in negotiations regarding the extension of the lease relationship.
NOVA Green Energy Sub-Fund 1
The appreciation of Subfund 1 for the month of November 2022 was 0.46%, and for the year 2022 it was 4.90% YTD.
In the Krnča biomass heating plant, Subfund 1 is taking steps for the purpose of financial and operational optimization, the financial plan for next year is currently being compiled and evaluated in the light of changing basic variables such as the prices of wood chips, heat and electricity based on preliminary offers for 2023. In Slovakia it was , similarly to the Czech Republic, a package of measures in the form of a windfall tax was approved, which stipulates a mandatory tax deduction above the set price level of electricity, the issuance of an implementing decree that will define the individual limits is currently awaited. The replacement of the statutory bodies of the company owning the Krnča heating plant was successful.
The projects of two biomass heating plants, whose secured receivables are also assets of Subfund 1, are still facing rising prices of input raw materials (wood chips) and other operational problems (turbine repair) and are below the production and operating plan. Similar to the case of the Krnča heating plant, there is also uncertainty regarding the capping of sales prices, especially of electricity, and we have to wait for the regulating decree of the SR government. We solve the whole complex situation in the long term both with the management of the heating plants and with the financing bank.
With effect from 1 August 2022, Sub-fund 1 does not formally plan, with regard to the gradual termination of activity, further investments in new resources. On the other hand, it focuses on the management and optimization of assets falling into the "Side Pocket", with the aim of eliminating all risks and transferring these assets to Subfund 2 as soon as possible. We have published detailed information in the form of questions and answers regarding the fund distribution project on the website Subfund 1 in the "FAQ - "Side Pocket" section. The extraordinary financial statement as of 7/31/2022 related to the initiation of the formal liquidation of Subfund 1 was drawn up on 11/30/2022.
NOVA Green Energy Sub-Fund 2
The appreciation of Subfund 2 for the month of November 2022 was 0.46%, and for the year 2022 it was 3.04% YTD.
In November, work continued on the development of several PV plants, mainly in the Czech and Slovak Republics. We received studies for 12 roof installations on the roofs of buildings owned by sister fund NOVA Real Estate. These studies show that these 12 roofs could be equipped with photovoltaic power plants with an output of up to 3 MWp. For investment in these PV plants, we are considering investment subsidy support from a subsidy program of the MFŽP or MPO. Work is currently underway on the project documentation for these works. For the pilot rooftop PV project Orlice with an installed capacity of 0.5MWp, we received a building permit and at the same time issued a call for tenders for the contractor of this project.
We are currently also focusing on the situation of existing Czech PV plants owned by Subfund 2. In our two Czech PV plants, we switched to a purchase scheme for the so-called green bonus, where we contracted the sale of electricity in EUR. We decided to purchase in euros due to the planned drawdown of new loans in this currency, which will significantly reduce the exchange rate risk of loan repayment vs. revenues. Negotiations are currently underway with financing banks regarding the latest conditions. In Slovakia, similarly to the Czech Republic, a package of measures in the form of a windfall tax was approved, which provides for a mandatory tax deduction above the set price level of electricity, and an implementing decree that will define the individual limits is currently awaited.
