FS KKR Capital Corp. Announces Third Quarter 2024 Results
FS KKR Capital Corp (FSK) reported its Q3 2024 financial results with net investment income of $0.77 per share, unchanged from Q2 2024. The company's net asset value slightly decreased to $23.82 per share from $23.95. Total purchases were $1,136 million versus $1,321 million in sales and repayments. The board declared a Q4 2024 distribution of $0.70 per share. The portfolio's total fair value was $13.9 billion, with 67% invested in senior secured securities. The weighted average annual yield on accruing debt investments was 11.9%, down from 12.3% in Q2. Non-accrual investments improved to 1.7% of the portfolio at fair value.
FS KKR Capital Corp (FSK) ha riportato i risultati finanziari del terzo trimestre 2024 con un reddito da investimenti netto di $0,77 per azione, invariato rispetto al secondo trimestre 2024. Il valore netto degli attivi dell'azienda è leggermente diminuito a $23,82 per azione da $23,95. Gli acquisti totali sono stati di $1.136 milioni contro $1.321 milioni in vendite e rimborsi. Il consiglio di amministrazione ha dichiarato una distribuzione per il quarto trimestre 2024 di $0,70 per azione. Il valore totale equo del portafoglio era di $13,9 miliardi, con il 67% investito in titoli garantiti senior. Il rendimento medio ponderato annuale sugli investimenti in debito in attesa di interessi era dell'11,9%, in calo rispetto al 12,3% del secondo trimestre. Gli investimenti non in attesa di interessi sono migliorati all'1,7% del portafoglio al valore equo.
FS KKR Capital Corp (FSK) informó sobre sus resultados financieros del tercer trimestre de 2024, con un ingreso neto por inversiones de $0.77 por acción, sin cambios respecto al segundo trimestre de 2024. El valor neto de los activos de la compañía disminuyó ligeramente a $23.82 por acción desde $23.95. Las compras totales fueron de $1,136 millones frente a $1,321 millones en ventas y reembolsos. La junta declaró una distribución para el cuarto trimestre de 2024 de $0.70 por acción. El valor total justo de la cartera era de $13.9 mil millones, con el 67% invertido en valores asegurados senior. El rendimiento promedio ponderado anual sobre las inversiones en deuda acumuladas fue del 11.9%, en comparación con el 12.3% del segundo trimestre. Las inversiones en mora mejoraron al 1.7% de la cartera al valor justo.
FS KKR Capital Corp (FSK)는 2024년 3분기 재무 결과를 보고하였습니다. 주당 $0.77의 순투자 수익은 2024년 2분기와 동일합니다. 회사의 순자산 가치는 $23.82로 약간 감소했으며, 이전에는 $23.95였습니다. 총 구매액은 $1,136백만이며, 판매 및 상환액은 $1,321백만이었습니다. 이사회는 2024년 4분기 주당 $0.70의 배당금을 선언했습니다. 포트폴리오의 총 공정 가치는 $13.9억 달러로, 67%가 선순위 담보 증권에 투자되었습니다. 이자 발생 채무 투자에 대한 가중 평균 연간 수익률은 11.9%로, 2분기 12.3%에서 감소했습니다. 연체 투자는 포트폴리오의 공정 가치에서 1.7%로 개선되었습니다.
FS KKR Capital Corp (FSK) a annoncé ses résultats financiers pour le troisième trimestre 2024, avec un revenu net d'investissement de 0,77 $ par action, inchangé par rapport au deuxième trimestre 2024. La valeur nette des actifs de la société a légèrement diminué à 23,82 $ par action contre 23,95 $. Les achats totaux se sont élevés à 1 136 millions de dollars contre 1 321 millions de dollars en ventes et remboursements. Le conseil d'administration a déclaré une distribution de 0,70 $ par action pour le quatrième trimestre 2024. La valeur totale équitable du portefeuille était de 13,9 milliards de dollars, avec 67 % investis dans des titres sécurisés de premier rang. Le rendement moyen pondéré annuel sur les investissements en dette accumulée était de 11,9 %, en baisse par rapport à 12,3 % au deuxième trimestre. Les investissements non accumulés se sont améliorés à 1,7 % du portefeuille en valeur équitable.
FS KKR Capital Corp (FSK) hat seine finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit einem netto Investitionsertrag von $0,77 pro Aktie, unverändert im Vergleich zum 2. Quartal 2024. Der Nettovermögenswert des Unternehmens ist leicht auf $23,82 pro Aktie von $23,95 gesunken. Die Gesamtkäufe betrugen $1.136 Millionen im Vergleich zu $1.321 Millionen aus Verkäufen und Rückzahlungen. Der Vorstand erklärte eine Ausschüttung für das 4. Quartal 2024 von $0,70 pro Aktie. Der Gesamtmarktwert des Portfolios betrug $13,9 Milliarden, wobei 67% in nachrangig gesicherte Wertpapiere investiert waren. Die gewichtete durchschnittliche jährliche Rendite auf aufgelaufene Schuldeninvestitionen beträgt 11,9%, ein Rückgang von 12,3% im 2. Quartal. Die nicht aufgelaufenen Investitionen verbesserten sich auf 1,7% des Portfolios zum Marktwert.
- Maintained stable net investment income of $0.77 per share
- Declared Q4 distribution of $0.70 per share
- Reduced non-accrual investments from 1.8% to 1.7% of portfolio fair value
- Strong portfolio yield of 11.9% on accruing debt investments
- 67% of portfolio invested in senior secured securities indicating conservative approach
- Net asset value declined from $23.95 to $23.82 per share
- Total net realized and unrealized loss of $0.20 per share
- Portfolio yield decreased from 12.3% to 11.9% quarter-over-quarter
- Net sales exceeded purchases by $185 million indicating portfolio contraction
Insights
The Q3 2024 results for FSK show a stable performance with some mixed signals. Net investment income remained steady at
Key positives include reduced non-accrual investments (down to
The
Market positioning analysis reveals FSK's strategic portfolio adjustments, with
The reduction in non-income producing investments to
Financial and Operating Highlights for the Quarter Ended September 30, 2024(1)
- Net investment income of
$0.77 $0.77 - Adjusted net investment income(2) of
$0.74 $0.75
- Adjusted net investment income(2) of
- Net asset value of
$23.82 $23.95 - Total net realized and unrealized loss of
$0.20 $0.39 - Adjusted net realized and unrealized loss(2) of
$0.17 $0.37
- Adjusted net realized and unrealized loss(2) of
- Earnings per Share of
$0.57 $0.37 - Total purchases of
$1,136 million $1,321 million $370 million - Net debt to equity ratio(3) as of September 30, 2024 was
109% , compared to109% as of June 30, 2024 - Paid cash distributions to stockholders totaling
$0.70
"During the third quarter FSK outperformed its public guidance by earning
Distribution for Fourth Quarter 2024
On October 8, 2024, FSK's board of directors declared a distribution for the fourth quarter of
Portfolio Highlights as of September 30, 2024
- Total fair value of investments was
$13.9 billion 67% was invested in senior secured securities. - Weighted average annual yield on accruing debt investments(5) was
11.9% , compared to12.3% as of June 30, 2024. Excluding the impact of merger accounting, weighted average annual yield on accruing debt investments was11.5% , compared to12.0% as of June 30, 2024. - Weighted average annual yield on all debt investments(5) was
11.2% , compared to11.5% as of June 30, 2024. Excluding the impact of merger accounting, weighted average annual yield on all debt investments was10.8% , compared to11.1% as of June 30, 2024. - Exposure to the top ten largest portfolio companies by fair value was
20% , compared to20% as of June 30, 2024. - As of September 30, 2024, investments on non-accrual status represented
1.7% and3.8% of the total investment portfolio at fair value and amortized cost, respectively, compared to1.8% and4.3% as of June 30, 2024.
Portfolio Data | As of September 30, 2024 | As of June 30, 2024 |
Total fair value of investments | ||
Asset Class (based on fair value) | ||
Senior Secured Loans — First Lien | 59.9 % | 58.1 % |
Senior Secured Loans — Second Lien | 6.2 % | 6.6 % |
Other Senior Secured Debt | 0.9 % | 0.9 % |
Subordinated Debt | 1.6 % | 2.5 % |
Asset Based Finance | 14.3 % | 14.4 % |
Credit Opportunities Partners JV, LLC | 9.9 % | 9.8 % |
Equity/Other | 7.2 % | 7.7 % |
Interest Rate Type (based on fair value) | ||
% Variable Rate Debt Investments | 68.6 % | 68.8 % |
% Fixed Rate Debt Investments | 8.2 % | 7.8 % |
% Other Income Producing Investments | 15.8 % | 15.5 % |
% Non-Income Producing Investments(7) | 5.7 % | 6.1 % |
% of Investments on Non-Accrual(6) | 1.7 % | 1.8 % |
Leverage and Liquidity as of September 30, 2024
- Net debt to equity ratio(3) of
109% , based on$8.1 billion $371 million $467 million $6.7 billion 5.49% . - Cash, cash equivalents and foreign currency of
$371 million $3.5 billion - As of September 30, 2024,
66% of the Company's$8.1 billion 34% in secured debt.
Conference Call Information
FSK will host a conference call at 9:00 a.m. (Eastern Time) on Thursday, November 7, 2024, to discuss its third quarter 2024 results. All interested parties are welcome to participate via telephone or live webcast. Domestic callers can access the conference call toll free by dialing +1 (800) 715-9871. International callers can access the conference call by dialing +1 (646) 307-1963. All callers are asked to dial in 10 minutes prior to the call and reference conference ID 4020608. The conference call will also be webcast, which can be accessed from the Investor Relations section of FSK's website at www.fskkradvisor.com under Events.
A replay of the call will be available shortly after the end of the call by visiting the Investor Relations section of FSK's website, under Events, or by using the following URL: https://edge.media-server.com/mmc/p/sf6nn9zu.
Supplemental Information
An investor presentation of financial information will be available by visiting the Investor Relations section of FSK's website at www.fskkradvisor.com, under Presentations, after the market close on Wednesday, November 6, 2024.
About FS KKR Capital Corp.
FSK is a leading publicly traded business development company (BDC) focused on providing customized credit solutions to private middle market
About FS/KKR Advisor, LLC
FS/KKR Advisor, LLC (FS/KKR) is a partnership between FS Investments and KKR Credit that serves as the investment adviser to FSK and other business development companies.
FS Investments is a global alternative asset manager dedicated to delivering superior performance and innovative investment and capital solutions. The firm manages over
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group's website at www.globalatlantic.com.
Forward-Looking Statements and Important Disclosure Notice
This announcement may contain certain forward-looking statements, including statements with regard to future events or future performance or operations of FSK. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption in FSK's operations or the economy generally due to terrorism, geo-political risks, natural disasters or pandemics such as COVID-19, future changes in laws or regulations and conditions in FSK's operating area and the price at which shares of FSK's common stock trade on the New York Stock Exchange. Some of these factors are enumerated in the filings FSK makes with the SEC. FSK undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The press release above contains summaries of certain financial and statistical information about FSK. The information contained in this press release is summary information that is intended to be considered in the context of FSK's SEC filings and other public announcements that FSK may make, by press release or otherwise, from time to time. FSK undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSK, or information about the market, as indicative of FSK's future results.
Other Information
The information in this press release is summary information only and should be read in conjunction with FSK's quarterly report on Form 10-Q for the quarter ended September 30, 2024, which FSK filed with the
Certain Information About Distributions
The determination of the tax attributes of FSK's distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. FSK intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSK's shares of common stock are subject to applicable legal restrictions and the sole discretion of its board of directors. There can be no assurance as to the amount or timing of any such future distributions.
FSK may fund its cash distributions to stockholders from any sources of funds legally available to it, including net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies, proceeds from the sale of shares of FSK's common stock and borrowings. FSK has not established limits on the amount of funds it may use from available sources to make distributions. There can be no assurance that FSK will be able to pay distributions at a specific rate or at all.
Contact Information:
Investor Relations Contact
Anna Kleinhenn
Anna.Kleinhenn@fsinvestments.com
FS Investments Media Team
Melanie Hemmert
Melanie.Hemmert@fsinvestments.com
Consolidated Statements of Operations (in millions, except share and per share amounts) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Investment income | ||||||||
From non-controlled/unaffiliated investments: | ||||||||
Interest income | $ 274 | $ 290 | $ 838 | $ 886 | ||||
Paid-in-kind interest income | 19 | 35 | 53 | 94 | ||||
Fee income | 20 | 7 | 46 | 17 | ||||
Dividend and other income | 7 | 16 | 20 | 52 | ||||
From non-controlled/affiliated investments: | ||||||||
Interest income | 6 | 6 | 19 | 19 | ||||
Paid-in-kind interest income | 11 | 9 | 31 | 27 | ||||
Fee income | 1 | 0 | 1 | 1 | ||||
Dividend and other income | 3 | — | 12 | — | ||||
From controlled/affiliated investments: | ||||||||
Interest income | 10 | 20 | 58 | 58 | ||||
Paid-in-kind interest income | 36 | 14 | 60 | 35 | ||||
Fee income | — | 5 | 9 | 5 | ||||
Dividend and other income | 54 | 63 | 167 | 189 | ||||
Total investment income | 441 | 465 | 1,314 | 1,383 | ||||
Operating expenses | ||||||||
Management fees | 54 | 56 | 163 | 170 | ||||
Subordinated income incentive fees | 44 | 47 | 132 | 140 | ||||
Administrative services expenses | 2 | 3 | 7 | 10 | ||||
Accounting and administrative fees | 1 | 1 | 3 | 3 | ||||
Interest expense | 118 | 117 | 349 | 349 | ||||
Other general and administrative expenses | 7 | 7 | 18 | 19 | ||||
Total operating expenses | 226 | 231 | 672 | 691 | ||||
Net investment income | 215 | 234 | 642 | 692 | ||||
Realized and unrealized gain/loss | ||||||||
Net realized gain (loss) on investments: | ||||||||
Non-controlled/unaffiliated investments | (24) | (50) | (314) | (147) | ||||
Non-controlled/affiliated investments | (26) | (14) | (34) | (17) | ||||
Controlled/affiliated investments | 7 | (2) | (2) | (174) | ||||
Net realized gain (loss) on foreign currency forward contracts | 1 | 3 | 20 | 7 | ||||
Net realized gain (loss) on foreign currency | (2) | 1 | (5) | 4 | ||||
Net change in unrealized appreciation (depreciation) on investments: | ||||||||
Non-controlled/unaffiliated investments | (3) | 94 | 164 | 125 | ||||
Non-controlled/affiliated investments | 78 | 22 | 98 | 11 | ||||
Controlled/affiliated investments | (53) | (37) | (102) | 101 | ||||
Net change in unrealized appreciation (depreciation) on foreign currency | (6) | — | (19) | (3) | ||||
Net change in unrealized gain (loss) on foreign currency | (27) | 14 | (10) | 7 | ||||
Total net realized and unrealized gain (loss) | (55) | 31 | (204) | (86) | ||||
Net increase (decrease) in net assets resulting from operations | $ 160 | $ 265 | $ 438 | $ 606 | ||||
Per share information—basic and diluted | ||||||||
Net increase (decrease) in net assets resulting from operations (Earnings | $ 0.57 | $ 0.95 | $ 1.56 | $ 2.16 | ||||
Weighted average shares outstanding | 280,066,433 | 280,066,433 | 280,066,433 | 280,347,651 | ||||
Consolidated Balance Sheets (in millions, except share and per share amounts) | ||||
September 30, 2024 | December 31, 2023 | |||
(Unaudited) | ||||
Assets | ||||
Investments, at fair value | ||||
Non-controlled/unaffiliated investments (amortized cost— | $ 9,407 | $ 10,568 | ||
Non-controlled/affiliated investments (amortized cost— | 838 | 745 | ||
Controlled/affiliated investments (amortized cost— | 3,698 | 3,336 | ||
Total investments, at fair value (amortized cost— | 13,943 | 14,649 | ||
Cash and cash equivalents | 366 | 223 | ||
Foreign currency, at fair value (cost— | 5 | 8 | ||
Receivable for investments sold and repaid | 468 | 246 | ||
Income receivable | 313 | 290 | ||
Unrealized appreciation on foreign currency forward contracts | 0 | 13 | ||
Deferred financing costs | 27 | 32 | ||
Prepaid expenses and other assets | 27 | 8 | ||
Total assets | $ 15,149 | $ 15,469 | ||
Liabilities | ||||
Payable for investments purchased | $ 1 | $ — | ||
Debt (net of deferred financing costs and discount of | 8,060 | 8,187 | ||
Unrealized depreciation on foreign currency forward contracts | 10 | 4 | ||
Stockholder distributions payable | 196 | 196 | ||
Management fees payable | 54 | 56 | ||
Subordinated income incentive fees payable | 44 | 41 | ||
Administrative services expense payable | 5 | 5 | ||
Interest payable | 99 | 98 | ||
Other accrued expenses and liabilities | 9 | 33 | ||
Total liabilities | 8,478 | 8,620 | ||
Commitments and contingencies | ||||
Stockholders' equity | ||||
Preferred stock, | — | — | ||
Common stock, | 0 | 0 | ||
Capital in excess of par value | 9,437 | 9,437 | ||
Retained earnings (accumulated deficit) | (2,766) | (2,588) | ||
Total stockholders' equity | 6,671 | 6,849 | ||
Total liabilities and stockholders' equity | $ 15,149 | $ 15,469 | ||
Net asset value per share of common stock at period end | $ 23.82 | $ 24.46 | ||
Non-GAAP Financial Measures
This press release contains certain financial measures that have not been prepared in accordance with generally accepted accounting principles in
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with FSK's consolidated financial statements prepared in accordance with GAAP. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures has been provided in this press release, and investors are encouraged to review the reconciliation.
Reconciliation of Non-GAAP Financial Measures(1) | |||
Three Months Ended | |||
September 30, 2024 | June 30, 2024 | ||
GAAP net investment income per share | |||
Accretion resulting from merger accounting | |||
Adjusted net investment income per share(2) | |||
GAAP Net realized and unrealized gain (loss) per share | |||
Unrealized appreciation from merger accounting | |||
Adjusted net realized and unrealized gain(2) | |||
1) | Per share data was derived by using the weighted average shares of FSK's common stock outstanding during the applicable period. Per share numbers may not sum due to rounding. |
2) | Adjusted net investment income is a non-GAAP financial measure. Adjusted net investment income is presented for all periods as GAAP net investment income excluding (i) the accrual for the capital gains incentive fee for realized and unrealized gains; (ii) excise taxes (iii) the impact of accretion resulting from merger accounting; and (iv) certain non-recurring operating expenses that are one-time in nature and are not representative of ongoing operating expenses incurred during FSK's normal course of business. FSK uses this non-GAAP financial measure internally in analyzing financial results and believes that the use of this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing its financial results with other business development companies. Adjusted net realized and unrealized gain is a non-GAAP financial measure. Adjusted net realized and unrealized gain is presented for all periods as GAAP realized and unrealized gains to exclude the impact of the merger accounting. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of GAAP net investment income to adjusted net investment income and GAAP net realized and unrealized gain to adjusted net realized and unrealized gain can be found above. |
3) | Net debt to equity ratio is debt outstanding, net of cash and foreign currency and net payable/receivable for investments purchased/sold and repaid, divided by net assets. |
4) | The per share data for distributions reflects the amount of distributions paid per share of our common stock to stockholders of record during each applicable period. |
5) | See FSK's quarterly report on Form 10-Q for the quarter ended September 30, 2024 for important information, including information related to the calculation and definition of weighted average annual yield on accruing debt investments, weighted average annual yield on all debt investments, variable rate debt investments, fixed rate debt investments, other income producing investments and non-income producing investments. |
6) | Interest income is recorded on an accrual basis. See FSK's quarterly report on Form 10-Q for the quarter ended September 30, 2024 for a description of FSK's revenue recognition policy. |
7) | Does not include investments on non-accrual status. |
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SOURCE FS Investments
FAQ
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