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Dec 31, 2022
OFS Capital Q4 2022 Earnings Report
OFS Capital reported solid results with an increase in net investment income and a dividend increase for Q1 2023.
Key Takeaways
OFS Capital Corporation announced its financial results for the fourth quarter and full year ended December 31, 2022. The company's net investment income per common share increased to $0.35, and the board declared a dividend of $0.33 per common share for the first quarter of 2023, a 10% increase.
Net investment income per common share increased to $0.35.
Net loss on investments per common share was $0.17.
NAV per common share decreased to $13.47.
The investment portfolio’s weighted-average performing income yield increased to 12.7%.
OFS Capital
OFS Capital
Forward Guidance
OFS Capital anticipates continued growth in net investment income due to rising interest rates and a well-positioned balance sheet.
Positive Outlook
- The company announced a dividend increase for the first quarter of 2023.
- Fourth quarter NII was $0.35 per share.
- The portfolio continues to benefit from the current rising rate environment.
- Balance sheet is well positioned with 94% of loans floating rate.
- 69% of debt is fixed rate as of December 31, 2022.
Challenges Ahead
- There is no assurance that the current portfolio composition will ensure success.
- Net loss on investments of $2.3 million was primarily due to unrealized depreciation.
- Unrealized depreciation on a few issuer specific portfolio companies.
- Broader market related declines in CLO equity securities and liquid debt securities.
- These declines were partially offset by unrealized appreciation on a few specific portfolio company investments.