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Jun 30, 2023
OFS Capital Q2 2023 Earnings Report
Announced financial results with net investment income increasing and a distribution increase for Q3 2023.
Key Takeaways
OFS Capital Corporation reported an increase in quarterly net investment income to $0.38 per common share for Q2 2023. The company's investment portfolio's weighted-average performing income yield increased to 13.8%. A distribution of $0.34 per common share for the third quarter of 2023 was declared, representing a 3.0% increase compared to the prior quarter distribution.
Net investment income of $0.38 per common share for the quarter ended June 30, 2023, increased from $0.37 per common share for the quarter ended March 31, 2023.
Net loss on investments of $0.53 per common share; no new non-accrual loans during the quarter.
Net asset value (NAV) per common share of $12.94, as of June 30, 2023.
Investment portfolio’s weighted-average performing income yield increased to 13.8%.
OFS Capital
OFS Capital
Forward Guidance
Management expressed confidence in the company's balance sheet positioning due to a high percentage of floating rate loans in the portfolio and a majority of liabilities that have a fixed rate of interest.
Positive Outlook
- Balance sheet is well positioned in the current interest rate environment.
- Vast majority of the loan portfolio being floating rate.
- Majority of debt being fixed-rate.
- Approximately 86% of outstanding debt matures in 2026 or later.
- More than half of outstanding debt is unsecured.
Challenges Ahead
- There can be no assurance that such a composition will lead to future success.
- Net loss on investments of $0.53 per common share
- Net asset value (“NAV”) per common share decreased from $13.42 to $12.94
- Net realized loss on investments of $0.78 per common share
- The Company recognized a net loss on investments of $7.1 million, primarily due to unrealized depreciation of $4.3 million and $2.7 million on structured finance securities and equity securities, respectively.