Dear 12J Solar Investors,
We are pleased to inform you that we have declared a dividend of R10,777,657 to our investors for the period 1 July 2023 to 30 June 2024. The dividend represents a total yield generated on the portfolio of 9.5% for the year (combination of returns from cash invested and profits from solar projects), while the net after management fees and after corporate taxation distribution to investors will be 7.84%.
We have emailed your 2024 Dividend Packs, which includes a detailed analysis of the portfolio performance as well as a guide for disclosing the dividends in your tax returns. Please check your inbox to acknowledge receipt and also confirm banking details to enable us to make the dividend payments.
Dividend Returns
Despite a challenging year in the renewable energy sector, we are on track to meet your original 12J IRR targets. Based on current estimates (3 year actual results and 2 year forecast), the after-tax IRR (after Dividend Withholding Tax) at the end of 5 years is projected as follows:
(a) Cash investors: 15.07% per annum after all tax.
(b) Investments funded via the 5 year loans: 18.61% per annum after all tax.
(c) Investments funded via the original SmartLoans: 19.30%.
Details of the above projected IRR calculations are included in your Dividend Packs. Please note that company investment returns are slightly lower (27% tax rate vs. 45% tax rate) and that returns may vary per investor depending on your effective tax rate and cash flows. Also, the above is our best estimate and cannot be guaranteed. A key focus over the next two years will be to continue to find and invest in profitable renewable energy projects in a space that is becoming highly competitive with overall reducing margins. Also, creating liquidity in the exit year will be a key consideration to achieve our objectives to provide investors an option at the end of the 5 years to either exit or remain invested for a further period and at terms to be proposed closer to the expected exit date.
For now, we are on track, even with some bumps in the road.
As always, our cash is invested next to yours. Should you have any questions, please feel free to drop us an email at any time.
Kind regards
Jaco, Deon and the Futureneers Energy Team