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BlackRock Energy and Resources Income Trust Plc - Portfolio Update
BLACKROCK ENERGY AND RESOURCES INCOME TRUST plc (LEI:54930040ALEAVPMMDC31)
All information is at 30 September 2021 and unaudited.
Performance at month end with net income reinvested
One Three Six One Three Five
Month Months Months Year Years Years
Net asset value 0.7% -1.6% 7.6% 48.9% 34.3% 66.7%
Share price 4.7% 1.0% 3.0% 53.6% 35.9% 59.0%
Sources: Datastream, BlackRock
At month end
Net asset value – capital only: 97.15p
Net asset value cum income1: 98.80p
Share price: 91.80p
Discount to NAV (cum income): 7.1%
Net yield: 4.4%
Gearing - cum income: 6.2%
Total assets: £114.8m
Ordinary shares in issue2: 116,218,357
Gearing range (as a % of net assets): 0-20%
Ongoing charges3: 1.25%
1 Includes net revenue of 1.65p.
2 Excluding 2,747,643 ordinary shares held in treasury.
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 2020. The Manager has also undertaken to cap the Company’s ongoing charges by way of a management fee rebate to ensure that these do not exceed 1.25% of net asset value per annum.
Sector Overview
Mining 42.7%
Traditional Energy 33.3%
Energy Transition                 24.5%
Net Current Liabilities                   -0.5%
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100.0%
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Sector Analysis % Total Assets^ Country Analysis % Total Assets^
Mining:
Diversified 24.5 Global 55.4
Gold 4.2 USA 18.2
Industrial Minerals 4.1 Canada 11.7
Copper 3.5 Latin America 7.8
Steel 2.6 Australia 2.4
Diamonds 1.4 Germany 1.9
Iron 1.0 South Africa 1.4
Platinum 0.8 France 0.8
Nickel 0.6 Ireland 0.7
Subtotal Mining: 42.7 Africa 0.2
Net Current Liabilities -0.5
Traditional Energy:
E&P 15.3 -----
Integrated 12.3 100.00
Refining & Marketing 4.0 =====
Distribution 1.2
Oil Services 0.5
Subtotal Traditional Energy: 33.3
Energy Transition:
Energy Efficiency 9.3
Electrification 7.2
Renewables 5.2
Transport 2.8
Subtotal Energy Transition: 24.5
Net Current Liabilities -0.5
----
100.0
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^ 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 5.7% of the Company’s net asset value.
Ten Largest Investments
Company Region of Risk % Total Assets
Vale Latin America
    Equity 5.0
    Bond 2.8
Glencore Global 6.9
BHP Global 4.4
Chevron Global 3.1
ConocoPhillips Global 3.1
Total Global 2.9
Anglo American Global 2.8
Devon Energy United States 2.6
Equinor Global 2.3
EDP Renovaveis Global 2.3
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 +0.7% during the month of September (in Sterling terms with dividends reinvested).

Traditional energy equities moved higher in September, in contrast to broader global stock markets, which fell over the month. Heightened concerns around economic growth weighed on markets due to continued supply disruptions and rising inflation expectations, driven by higher energy prices. In China, power stations restricted electricity, with some impact on large energy demand areas, in steel production and manufacturing, whilst uncertainty about potential spill-over effects from the default of a large property company added to concerns. Traditional energy equities were supported by dramatic increases in European and Asian natural gas and LNG (liquified natural gas) prices.  Natural gas prices increased further and stand 130% higher than at the start of the year on lower than usual levels of gas inventories in Europe and Asia, ahead of the stronger demand period of the Northern Hemisphere winter. The scope for additional gas supply into these markets is limited following the sustained capital discipline and lack of investment in new supply within the energy sector in recent years. OPEC maintained its policy of steadily raising oil production by 400k bpd each month to meet the recovery in oil demand, which has recovered quickly as higher vaccination rates allow economies to reopen and return to growth. Against this backdrop, the Brent and WTI (West Texas Intermediate) rose by 5.9% and 9.6%, ending the month at $78/bbl and $75/bbl respectively, whilst natural gas prices increased by 3.2%.

September was a difficult month for the mining sector on the back of falling mined commodity prices. The Chinese government continued to curb steel production as part of its efforts to tackle carbon emissions. This weighed on the demand outlook for iron ore, the price of which (62% fe(iron)) fell by 25.2%, ending down by 46.9% from the 2021 peak in July. Meanwhile, a liquidity crisis at Chinese property giant, Evergrande, caused concern around China’s property market and wider economy. Elsewhere, platinum group metals (PGMs) prices were weak as a global semiconductor chip shortage constrained autos production (auto catalytic converters typically account for a significant proportion of PGM demand).

In the energy transition sector, China announced plans to accelerate investment in wind power and that it would not build new coal power stations abroad. The Spanish government announced a number of measures to reduce the impact of higher power prices on consumers, impacting domestically focused Spanish energy utility companies. In clean transportation, there were further announced joint ventures between auto manufacturers and battery suppliers to build battery manufacturing capacity.

20 October 2021
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.