Fidus Investment Corp (FDUS) Q1 2024 Earnings Call Transcript Highlights: Strategic Insights ...

GuruFocus Research
5 min read

In This Article:

  • Total Portfolio Value: Grew to over $1 billion on a fair value basis.

  • Net Originations: $85.7 million for the quarter.

  • Adjusted Net Investment Income: $18.1 million, up 21.8% year-over-year.

  • Adjusted Net Investment Income Per Share: $0.59, slightly down from $0.60 last year.

  • Dividends: Total distribution of $0.65 per share in Q1; $0.59 per share declared for Q2.

  • Net Asset Value: Increased to $608.3 million, up 3.2%.

  • Net Asset Value Per Share: $19.36, nearly unchanged from $19.37 at end of previous quarter.

  • Debt Portfolio: Valued at $916.4 million, 87% of total portfolio.

  • Equity Investments: Totaled $8.4 million during the quarter.

  • First Lien Investments: Comprised 70% of debt investments, valued at $96.1 million.

  • Proceeds from Repayments and Realizations: $60.2 million, with net realized gains of $1.7 million.

  • Nonaccruals: Represented under 1% of the total portfolio on a fair value basis.

  • Debt-to-Equity Ratio: 0.8x as of March 31, 2024.

  • Weighted Average Interest Rate on Debt: 4.6% as of March 31, 2024.

  • Net Investment Income Per Share: $0.57 for Q1.

  • Weighted Average Effective Yield on Debt Investments: 14% as of March 31, 2024.

  • Liquidity: Total liquidity of approximately $104.6 million as of March 31, 2024.

Release Date: May 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Fidus Investment Corp reported a significant increase in adjusted net investment income, rising 21.8% year-over-year to $18.1 million, reflecting higher interest and fee income.

  • The company's total portfolio on a fair value basis grew to over $1 billion, with net originations totaling $85.7 million in the first quarter.

  • Fidus Investment Corp declared dividends totaling $0.59 per share for Q2 2024, maintaining a strong commitment to shareholder returns.

  • Net asset value per share showed stability, with a slight increase to $19.36 at the end of the quarter, compared to $19.37 as of December 31, 2023.

  • The portfolio remains well-structured, focusing on high-quality, cash-generating businesses, with nonaccruals representing under 1% of the total portfolio on a fair value basis.

Negative Points

  • Despite a robust first quarter, Fidus Investment Corp anticipates a significant slowdown in originations for Q2 2024, which could impact growth momentum.

  • Adjusted net investment income per share slightly decreased to $0.59 from $0.60 in the same period last year, due to a higher average share count from equity raises.

  • Total investment income for Q1 2024 saw a decrease of $1.7 million from the previous quarter, primarily due to lower interest income and fee income.

  • The company noted that the quality of deal flow is currently 'spotty', indicating potential challenges in maintaining the quality of new investments.

  • There are concerns about potential refinancing risks in the portfolio, as some companies may seek lower rates due to an active and competitive market.

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