Lower core earnings and net profits, however, recorded for December quarter.

Sygnus Credit Investments (SCI) is reporting record core revenues for the half year period ended December 2020 of US$2.66 million

This represents a growth of  11.4 per cent or US$269,000 coming from US$2.36 million for the six months ended December 31, 2019. For the second quarter ended December 31, 2020, total investment income grew by 5.4 per cent or US$68,600 to a record US$1.35 million.

This compares with US$1.27 million reported for the second quarter ended December 31, 2019. Core revenues were negatively impacted by significant year-over-year growth in interest expense related to the timing of the use of debt to finance new investments.

Subsequent to the current half year period, SCI has repaid US$11.6 million in debt from its Additional Public Offer proceeds as at January 31, 2021. The investment outfit’s core earnings or net investment income, which was down by 5.8% or US$101.5 thousand to US$1.65 million for the period under review compared with US$1.75 million for same period in 2019.

For the December quarter, net investment income was lower by 14.1% or US$133.3 thousand to US$812.6 thousand compared to the US$945.9 thousand posted for the same period of 2019. Net profit attributable to shareholders registered a decline of 23.1% or US$378.4 thousand to US$1.26 million for the period under review and compared with the US$$1.64 million posted in 2019.

Net profit suffered during the period under review

Net profit suffered a big decline of 58.1 per cent or US$641,300 to US$462,800. This was due to a combination of substantially larger interest expenses related to the timing of the use of debt, and unrealised fair value losses related to higher interest rates on fair value instruments.

The management and board of SCI are emphasised, “these results were underpinned by an expanded regional footprint across a record eight Caribbean territories with a record US$67.04 million in private credit investments.” They pointed to the fact that SCI successfully closed its additional public offering (APO) on December 30, 2020, which raised an estimated US$27.1 million.

The new capital raise was consistent with SCI’s strategy to grow its regional private credit portfolio to at least US$100 million within the next two to three years, while generating at least US$8 million in core revenues. The board and management cited that “the impact of the global Covid-19 pandemic on the Caribbean region and on middle-market businesses is ongoing, while the trajectory of the regional economic recovery remains uneven and unclear.” However, they boasted that “SCI’s private credit portfolio remains resilient and is well positioned to navigate the effects of the pandemic.”

Net Foreign Exchange losses

SCI recorded a loss of US$50,000 for the six month period under review. For quarter SCI reported a loss of US$15,800 compared to gains of US$201.2 thousand for 2019. The movement in foreign exchange gains and losses reflected SCI’s net exposure to Jamaican dollar assets, which fluctuate based on movements in the JMD/USD exchange rate.

SCI’s net exposure to JMD at the end of December 2020 was reduced to US$1.57 million equivalent, down from US$15.59 million equivalent at the end of December 2019. Subsequent to December 2020, SCI’s net JMD exposure was further reduced to approximate nil as at January 31, 2021.