Net profit up 16% to a record US$2.86 million as earnings per share jumps 14.3% to US$0.48

Durrant Pate/Contributor

Sygnus Credit Investments Limited (SCI) is reporting yet another record performance for the half-year and second quarter, ended December 2022.

The alternative financing company delivered record net profits and core revenues for both periods driven by the expansion of its private credit portfolio across the Caribbean region, which grew by 54.6 per cent to US$136.07 million.  For the half year, SCI chalked up record net profit of US$2.86 million, up 16.0 per cent; record total investment income of US$4.53 million, up 22.7 per cent and a record net investment income of US$2.65 million, up 16.2 per cent.

Earnings per share increased to US$0.48 cents compared with US$0.42 last year. The performance was aligned with SCI’s new thrust of enhancing shareholder value, which was revealed at its recent annual general meeting last month. 

Record second quarter performance

Similar to the half year results, SCI reported a second quarter record for net profit of US$1.23 million, up 28.8 per cent; total investment income of US$2.26 million, up 20.7 per cent and net investment income of US$1.28 million, up 10.7 per cent. Earnings per share increased to US$0.21 compared with US$0.16 for the second quarter in 2021.

The company’s Board of Directors will meet to consider a dividend payment on February 21, 2023. During the second quarter, SCI further increased its diversification by deploying capital into a new industry, a middle-market firm operating in the transportation sector. Excluding the underlying portfolio, Acrecent Financial Corporation (AFS), which it acquired in February 2022, SCI’s private credit portfolio spanned a record 13 industries across eight territories.

Inclusive of the portfolio from Acrecent, SCI was diversified across 22 industries and 12 territories. AFC is not consolidated into SCI. Phase II of the integration of AFC into SCI remained on-track for completion later this year.

In the meantime, the Puerto Rican management team is diligently expanding and scaling the business in collaboration with SCI’s investment manager. 

SCI’s diligent deployment of capital

Sygnus Group Executive Vice President and Chief Investment Officer, Jason Morris hailed the record first and second quarter performance saying, “the results are a reflection of SCI’s diligent deployment of capital and taking the bold decision to acquire AFS in a spanish speaking US territory in the Caribbean, while the country was still experiencing substantial financial difficulties.”

According to Morris, “Puerto Rico’s economic outlook is substantially brighter for at least the next five years given it now has in excess of US$50 billion in financial support from the United States, its “big brother”.

Thus, the Spanish-speaking leg of the business has the potential to scale substantially over the medium term. On the English and Dutch-speaking leg of the business, we are seeing substantial origination opportunities to deploy capital and help companies grow and expand. The key focus here is to raise substantial pools of capital to fund these opportunities as fast as possible. We will execute this using multiple financing channels from overseas and local sources to diversify our funding mix. This is the path to continue enhancing shareholder value.”

SCI’s management team reiterated its plan to execute a three-year buyback programme later this year, which will begin once approved for execution by its Board of Directors. The plan is proposing to buy back between US$1 million and US$3 million of its shares per year over the three years. The programme was revealed at the company’s recent annual general meeting in January 2023.