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Mar 31
FS KKR Q1 2025 Earnings Report
FS KKR Capital Corp. reported a decrease in net investment income and total net realized and unrealized gain (loss) for Q1 2025 compared to Q1 2024.
Key Takeaways
FS KKR Capital Corp. experienced a decrease in net investment income and a significant decline in total net realized and unrealized gain (loss) in the first quarter of 2025 compared to the same period in 2024. The net increase in net assets resulting from operations also saw a notable reduction.
Net investment income decreased from $212 million in Q1 2024 to $187 million in Q1 2025.
Total net realized and unrealized gain (loss) shifted from a loss of $39 million in Q1 2024 to a loss of $67 million in Q1 2025.
Net increase in net assets resulting from operations declined from $173 million in Q1 2024 to $120 million in Q1 2025.
Total operating expenses decreased slightly from $222 million in Q1 2024 to $213 million in Q1 2025.
FS KKR
FS KKR
FS KKR Revenue by Segment
Revenue by Segment
Interest Income Revenue
CapyFin.comPaid-in-Kind Interest Income Revenue
CapyFin.comFee Income Revenue
CapyFin.comDividend Income Revenue
CapyFin.com Forward Guidance
The company anticipates that its long-term investments will be primarily financed with equity and debt. It may use interest rate risk management techniques to minimize exposure to interest rate fluctuations. The company intends to make sufficient distributions to its stockholders to qualify for and maintain its RIC tax status each tax year.
Positive Outlook
- The company maintains sufficient cash on hand and available borrowings to fund unfunded commitments.
- The company is in compliance with all covenants required by its financing arrangements.
- The company may use derivative instruments to manage foreign currency exchange rate fluctuations.
- The company intends to make sufficient distributions to stockholders to qualify for and maintain its RIC tax status.
- The company's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation.
Challenges Ahead
- Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on the business.
- A prolonged reduction in interest rates may reduce net investment income.
- Rising interest rates could increase interest expense, reducing net investment income.
- The company may not acquire any asset other than qualifying assets unless certain conditions are met.
- The company is subject to a 4% nondeductible federal excise tax on certain undistributed income.