November 14, 2019
In United States dollars (except where it is indicated otherwise)
Sygnus Credit Investments Limited, for the three months ended September 30, 2019 reported Interest Income of US$1.13 million, an 86% increase on the US$605,729 recorded in 2018. Interest expense for the quarter amounted to US$40,937 (2018: nil), resulting in net interest income of US$1.09 million (2018: US$605,729).
The Company reported Fair Value Gains of US$198,006 (2018: US$14,870) and Participation fees of US$7,000 (2018: US$14,944). Management noted the performance of Fair Value Gains was, “driven by an increase in the number of Portfolio Companies with profit sharing upside, with one such Portfolio Company added during the quarter.” As such, Sygnus reported first quarter total revenue of US$1.29 million compared to US$635,543 in 2018.
Management highlighted, “Sygnus Credit Investments Limited reported quarterly records for core revenues and core earnings, for the three months ended September 30, 2019. The results were driven by a growing portfolio of private credit investments across the Caribbean region, focused on financing the growth of middle-market firms. SCI provides middle-market firms with access to a nontraditional financing channel. To finance SCI’s growing pipeline of opportunities, the Board authorized SCI to raise up to US$35 million equivalent in debt and equity capital, at a Board meeting held on November 12, 2019.”
Total Expenses for the three months amounted to US$762,808, a 23% decline relative to US$986,073 recorded for the corresponding quarter in 2018. Of total expenses:
- Management fees amounted to US$200,697 (2018: US$173,642).
- Other expenses amounted to US$18,541 (2018: US$10,930). Audit Fees declined 11% year over year from US$4,287 in 2018 to US$3,808 for the year ended September 2019.
- Directors Fees and Related Expenses rose 20% to close at $US9,125 (2018: US$7,623). Commitment Fees amounted to US$32,554 (2018: nil), while accounting fees closed at US$17,204 (2018: US$4,854).
- Net foreign exchange loss for the quarter closed at US$505,114 compared to $US$743,596 reported for the first three months ended September 30, 2018. According to Sygnus, this, “reflected SCI’s exposure to Jamaican dollar assets, which fluctuate based on movements in the JMD/USD exchange rate.”
- SYGNUS reported nil (2018: US$2,399) for professional fees for the quarter, while irrecoverable withholding tax declined 98% to US$236 relative to US$12,098.
Profit for the quarter of US$527,923 was booked for three months ended September 30, 2019 relative to a loss of US$350,530 for the same quarter in 2018.
As a result, Earnings per share (EPS) for the quarter amounted to US$0.0015 (2018’s LPS: USD$0.0010). The twelve months trailing EPS amounted to US$0.0084. The number of shares used in our calculations amounted to 350,087,563 units. Notably, SCIJA and SCIJMD closed the trading period on November 14, 2019 at a price of $13.06 and $21.27 respectively. Both SCIUS and SCIUSD closed the trading period on November 14, 2019 at US$0.13 and US$0.14 respectively.
Balance Sheet Highlights
As at September 30, 2019, Sygnus’ total assets amounted to US$39.86 million, a 7% increase on 2018’s assets base of US$37.09 million. This was due to an increase in ‘investments’ to US$27.21 million (2018: US$17.99 million). Cash and Cash Equivalents jumped from US$2.58 million as at September 30, 2019 to US$5.92 million as at September 30, 2019 but however tempered by the reduction in Securities purchased under resale agreements to US$4.31 million (2018: US$15.58 million)
Total Stockholders’ equity as at September 30, 2019, closed at $37.24 million, relative to $35.79 million for the corresponding period last year. This resulted in a book value per share of US$0.11 compared to the value of $0.05 as September 30, 2018.
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