© Reuters.
Ares Capital Company reported robust third quarter outcomes for September 30, 2023, with a big enhance in core earnings per share and general worth of its funding portfolio. The corporate stays optimistic about new funding alternatives and expects an uptick in M&A and portfolio firm gross sales in 2024.
Key takeaways from the earnings name:
- Core earnings per share elevated 18% year-over-year to $0.59, pushed by increased internet curiosity and dividend earnings.
- GAAP earnings per share have been $0.89, reflecting robust core earnings and a rise within the general worth of the funding portfolio.
- Web asset worth per share elevated 3% for the reason that starting of the 12 months to $18.99.
- Ares Capital originated $1.6 billion of latest investments within the third quarter, with a deal with incumbent debtors and repeat sponsors.
- The corporate returned to the funding grade debt markets with a $600 million debt issuance and maintained a robust liquidity place of roughly $5.3 billion.
- Ares Capital declared a fourth quarter dividend of $0.48 per share.
Ares Capital Company’s (NASDAQ:ARCC) third quarter outcomes confirmed robust efficiency, pushed by increased internet curiosity and dividend earnings. The corporate’s core earnings per share elevated 18% year-over-year to $0.59. GAAP earnings per share have been $0.89, reflecting sturdy core earnings and a rise within the general worth of the funding portfolio.
The corporate’s portfolio corporations proceed to carry out properly, with a secure curiosity protection ratio and low non-accruals. Ares Capital’s stability sheet stays robust, with internet debt-to-equity ranges of round one instances and ample entry to capital. The corporate declared a fourth quarter dividend of $0.48 per share.
In the course of the third quarter, Ares Capital originated $1.6 billion of latest investments, primarily specializing in incumbent debtors and repeat sponsors. The whole portfolio at honest worth elevated to $21.9 billion, reflecting internet fundings and internet unrealized good points.
The corporate additionally returned to the funding grade debt markets with a $600 million debt issuance, sustaining a robust liquidity place of roughly $5.3 billion. The weighted common yield on debt and different income-producing securities elevated to 12.4%, and the weighted common yield on whole investments elevated to 11.2%, largely because of will increase in rates of interest.
The corporate’s executives, Kort Schnabel and Kipp DeVeer, mentioned numerous features of their portfolio and lending actions in the course of the earnings name. They expressed confidence of their portfolio and their potential to handle any drawback corporations, regardless of some considerations within the healthcare and manufacturing sectors. In addition they famous a rise in new borrower exercise and count on new deal exercise and repayments to choose up within the subsequent 12 months.
Trying forward, Ares Capital expects an uptick in M&A and sponsor-to-sponsor portfolio firm gross sales in 2024 and stays optimistic about new funding alternatives. Nonetheless, in addition they count on defaults to extend because of increased charges and a slowdown within the economic system. Regardless of these challenges, the corporate stays assured in its portfolio efficiency and diversification.
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