June 2, 2022
Sygnus Credit Investments Limited
For the nine months ended March 31, 2022: –
In United States dollars (except where it is indicated otherwise):
Sygnus Credit Investments Limited for the nine months ended March 31, 2022, reported net interest income of US$5.30 million 27% increase on the US$4.17 million recorded in 2021. Interest income close the period under review at US$7.24 million (2021: US$5.62 million), while interest expenses closed at US$1.94 million (US$1.45 million). For the quarter interest income rose 26% to US$2.54 million (2021: US$2.02 million) and interest expense increased 93% to US$920,352 (2021: US$475,745), resulting in a net interest income of US$1.62 million (2021: US$1.55 million).
The Company also reported fair value gain of US$669,023 for the nine months ended March 31, 2022 relative to a fair value loss of US$44,229 for the comparable period in 2021. Management noted the performance of Fair Value Gains, “reflected the addition of new fair value instruments during period, largely during the first quarter 2022. Adverse movement in interest rates resulted in the Q3 2022 losses. Interest rate movements may cause material fluctuations in fair value gains or lossesfrom period to period. SCI had US$23.3 million in fair valued private credit investments vs US$10.5 million in the prior year.”
Other income closed at US$18,055 (2021: US$101,311). For the quarter, other income totaled US$5,000 versus US$40,278 recorded in the same quarter last year.
As such, Sygnus reported nine months total revenue of US$5.99 million compared to US$4.23 million last year. For the quarter, Sygnus booked total revenue of US$1.92 million versus US$1.71 million for the quarter ended March 31, 2021.
Total Expenses for the period amounted to US$3.13 million, a 62% increase relative to US$1.94 million recorded for the corresponding period in 2021. Total expenses for the quarter amounted to US$1.55 million relative to US$680,169 million for the same quarter of 2021. Of expenses for the nine months ended March 31, 2022:
- Management fees amounted to US$1.40 million (2021: US$1.05 million).
- Other expenses for the period amounted to US$460,750 (2021: US$389,769).
- Net foreign exchange loss closed at US$325,586 (2021: US$82,457).
- Impairment allowance on financial assets amounted to US$647,436 (2021: US$224,019).
- Corporate service fees totalled US$240,101 (2021: US$193,017).
Net profit and comprehensive income for the nine months ended March 31, 2022 amounted to US$2.86 million, relative to US$2.29 million in 2021, a 24% increase year over year. Notably, taxation for the period was US$32,122 (2021: nil). For the quarter, the Company booked a net profit and comprehensive income of US$370,666 compared to a net profit of US$1.03 million for the same quarter of 2021.
As a result, Earnings per share (EPS) for the period amounted to US0.485 cent (2021: US0.388 cent). Earnings per share for the quarter amounted to US0.063 cent relative to an EPS of US0.175 cents in 2021. The twelve months trailing EPS amounted to US0.94 cent. The number of shares used in our calculations amounted to 590,975,463 units. Notably, SCIUSD and SCIJMD closed the trading period on May 14, 2022 at a price of J$13.06 and J$14.67, respectively. Both SCIJA and SCIUSD closed the trading period on June 1, 2022 at US$0.13 and US$0.12, respectively. While SCIUSD and SCIJMD closed at J$13.06 and J$14.00, respectively.
Management noted, “Sygnus Credit Investments Limited completed the acquisition of a 93.7% stake in Acrecent Financial Corporation (“AFC”) through its subsidiary SCI Puerto Rico Inc (“SCI PR Inc.”) on February 28, 2022. This investment in Puerto Rico gives SCI access to a Spanish-speaking private credit market in a US$100.7 billion US territory within the Caribbean region, exposure to industries not accessible in the English-speaking Caribbean and exposure to a fundamentally stronger set of portfolio companies.”
Furthermore, “SCI has begun discussions with international financing partners to secure large credit lines that will enable the launch of new private credit solutions and the creation of new sources of revenue for the business. On February 22, 2022, SCI’s Board of Directors approved an interim dividend payment of US$1.55 million to shareholders on record as at March 23, 2022, which was subsequently paid on April 05, 2022,” as per SCI.
Balance Sheet Highlights
As at March 31, 2022, Sygnus’ total assets amounted to US$135.06 million, a 58% increase on 2021’s assets base of US$85.22 million. This was due to an increase in ‘Investments’ to US$122.90 million (2021: US$71.56 million), reflecting a 72% of US$51.34 million year over year increase. SCI management noted, “this was mainly comprised of US$124.71 million in total private credit investments including US$23.51 million investment in Puerto Rico Credit Fund or PRCF, US$3.64 million in dry powder and US$4.62 million in investment income receivable. The growth in SCI’s total assets was financed by capital raised through its multi-series debt instruments.”
Total Stockholders’ equity as at March 31, 2022, closed at US$66.47 million, relative to US$64 million for the corresponding period last year. This resulted in a book value per share of US$0.112 compared to the value of US$0.108 as March 31, 2021.
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