John Laing posts loss as COVID-19 fallout hits asset values

(Reuters) - Infrastructure investor John Laing JLG.L on Thursday reported a half-year loss of 95 million pounds and said it was unlikely to meet its 1 billion pound investment target by the end of 2021 due to coronavirus-related uncertainties.

The company, which has moved away from its origins in construction in favour of investing in and managing greenfield infrastructure projects worldwide, reported a 6% decline in total returns at the end of June.

The slide in asset values stemmed chiefly from falls in power price forecasts and the resulting impact on its renewable energy projects, which in turn were a reflection of the deterioration in the broader economic outlook.

It predicted modest growth in the second half of the year. Shares fell 5.7% in response to the results.

“New investments in the period were minimal, with COVID-19 delaying public procurement processes, as well as the decision taken earlier this year to cease new investment in wind and solar generation,” newly appointed Chief Executive Ben Loomes said.

The company said in March it would sell its existing portfolio of solar and wind assets after significant writedowns last year.

“I would expect that over the next one to three years, we will be largely selling most of the renewables,” Loomes told Reuters.

Analysts at RBC Capital Markets said renewable assets have been a “disproportionate drag on portfolio returns”, and that strong political support for infrastructure spending in John Laing’s key markets should translate into more lucrative investment opportunities.

The company expressed hope that government stimulus would help it going forward, saying prospects for infrastructure investments were “stronger than ever”, including in digital infrastructure.

John Laing’s pretax loss in the six months to June compares with a profit of 35 million pounds a year earlier.

The company said it would stop providing future investment and divestment targets and will instead give details of its most promising bidder positions.

Reporting by Yadarisa Shabong and Muvija M in Bengaluru; Editing by Subhranshu Sahu and Jan Harvey