Private credit investment company Sygnus Credit Investments Limited (SCI) has reported a record third quarter ended March 31, 2020 of investment origination activity.

According to SCI, its investment in portfolio companies grew by 51.7 per cent to US$47.39 million and the number of portfolio company investments increased to 21 from 16 when compared with the previous corresponding three-month period.

In addition, SCI expanded its regional footprint to seven Caribbean territories, up from five the prior corresponding quarter.

SCI reported record nine-month core revenues of US$3.4 million and core earnings (up 38.4 per cent to US $2.4 million), but lower net profits (down 33.8 per cent to US $1.3 million) for the period ended March 31, 2020.

The company also indicated that it has begun negotiations to renew its bank credit facilities totalling US$6.5 million, which means that it has no maturing debt over the next 12 months, and “doesn’t need to worry about repayment of credit facilities in a challenging market”.

However, according to Jason Morris, executive vice-president, while revenues were less than expected for the period under review, it increased by 8.9 per cent to US $1.08 million.

“This number would have been higher but was impacted by temporary timing differences between the cost of borrowing debt and the revenues earned from using that debt to invest. The company made an early exit on an investment for US $10.3 million due to a delay in the use of funds brought on by the coronavirus, and as a result, we made less revenues than we otherwise would have, equating to almost one month of revenues,” he stated.

He added that core earnings for the three-month period were down 6.7 per cent to US$685,000, primarily due to the factors affecting core revenues.

In addition SCI’s net profit for the quarter under review amounted to US $1.3 million, down by 33.8 per cent. The results were influenced by a number of one-off items, including the conversion of $1.2 billion to US dollars partly from the proceeds of new Jamaican dollars debt that was issued.

Berisford Grey, president and CEO of SCI, asserted that while the company continues to evaluate the impact of COVID-19 on its business, he is confident that its robust risk management strategy, ample liquidity position, low leverage and well-diversified investments in portfolio companies across the region will ensure that it not only successfully protects shareholders’ value, but is also positioned to take advantage of the unprecedented investment opportunities that are likely to emanate from this period.

He added that SCI will continue to play a critical role in the future growth of its portfolio companies and economic recovery across the Caribbean by working closely with portfolio companies to navigate this crisis, financing new opportunities with strong downside protection and deepening accessibility to capital through alternative financing.

“As the leader in regional private credit, SCI will continue to play a critical role in the future growth of its portfolio companies and economic recovery across the Caribbean by working closely with portfolio companies to navigate this crisis, financing new opportunities with strong downside protection and deepening accessibility to capital through alternative financing,” Grey said.