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Mar 31, 2020
Ares Capital Q1 2020 Earnings Report
Ares Capital reported a net loss and a decrease in net asset value per share due to the impact of the COVID-19 pandemic.
Key Takeaways
Ares Capital reported a GAAP net loss of $612 million, or $1.42 per share, and core EPS of $0.41 per share. The company's operating results were impacted by the COVID-19 pandemic, which caused severe disruptions in the global economy and negatively impacted the fair value and performance of Ares Capital's investment portfolio. As of March 31, 2020, total assets were $15.8 billion, stockholders’ equity was $6.6 billion, and net asset value per share was $15.58. The company declared a second quarter dividend of $0.40 per share.
Ares Capital reported a GAAP net loss of $612 million or $1.42 per share.
Core EPS was $0.41 per share.
Net investment income was $234 million or $0.54 per share.
The company declared a second quarter dividend of $0.40 per share.
Ares Capital
Ares Capital
Forward Guidance
Ares Capital expects to maintain a stable dividend for the foreseeable future.
Positive Outlook
- The company believes it is operating from a position of relative strength.
- The portfolio is defensively positioned and has held up relatively well.
- There is a modest level of non-accruing loans.
- The company has significant liquidity of more than $2.6 billion.
- The company has the ability to support existing borrowers and invest in increasingly attractive market conditions.
Challenges Ahead
- The company's future performance is subject to a number of risks and uncertainties, including the impact of COVID-19.
- Changes in base interest rates and significant market volatility may impact the business.
- The COVID-19 pandemic has caused severe disruptions in the global economy.
- COVID-19 pandemic has negatively impacted the fair value and performance of Ares Capital's investment portfolio.
- There is uncertainty about the duration of business shutdowns and near-term liquidity needs.