Josimar Scott / Our Today
Jason Morris – Co-Founder, Executive Vice President and Chief Investment Officer of Sygnus Group
Jason Morris, executive VP and chief investment officer at Sygnus Credit Investments (SCI), says that the company’s nine-month results justify its increased deployment of capital in its Puerto Rican associate Acrecent Financial Corporation (AFC).
For the third quarter ending March 31, SCI along with AFC deployed the largest-ever disbursement of capital of US$57.5 million into its private credit business. By itself, SCI disbursed US$34.75 million, most of which went to Jamaican businesses.
For the nine months, SCI deployed US$114.5 million.
According to Morris, who provided an overview of the company’s third-quarter and nine months’ performance in an earnings call on Thursday (May 16), AFC created transactions generated transactions amounting to over US$20 million in the quarter and US$67.8 million over nine months.
A snapshot provided by Sygnus Credit Investments Executive Vice President and Chief Investment Officer Jason Morris during the earnings call on Thursday, May 16. 2024.
“I think since SCI would have done the acquisition of the Puerto Rico business two years ago, the deployment is about US$175 million, right, which is simply incredible. And that platform, of course – the business is in a US$100 million economy, so you should expect fast rate of growth,” he said.
So far, capital deployment in the Spanish-speaking jurisdiction is up by 50 per cent, while in the English-speaking it has grown by 32 per cent.
“So you can see where, I think, several quarters ago we gave a kind of forward-looking expectation that that we expect Puerto Rico sooner or later to outgrow the pace of SCI on a consistent basis, or in a steady state, and be larger than SCI and we’re starting to see that kind of expectation coming to the fore,” Morris outlined.
The SCI co-founder and CIO noted, too, that the performance of the Puerto Rico business in relation to its Jamaican parent can be credited to the size of the US territory’s economy. With a population of over 3.2 million, the Commonwealth of Puerto Rico has a per capita gross domestic product exceeds US$30,000.
AFC has generated more than US$1 million in profits in each quarter of financial year 2023/24, Morris pointed out, added that as that business continues growth, SCI shareholders can anticipate greater returns on their investments and by extension better dividend payouts.
During Q3 Mar 2024, an interim dividend of US$1.55 million or US$0.00263 per share was declared and subsequently paid on April 5, 2024
Looking ahead, the CIO said he expects the performance of AFC will contribute to SCI improving its return on equity (ROE) to above the 10 per cent mark. For the quarter, the company had 11.7 per cent in ROE, whereas for the nine months, ROE was 8.2 per cent.
“So our objective, as we would have outlined in our strategic plan at the last AGM (annual general meeting), was to have our ROE above 10 per cent on a consistent basis. So we’re getting closer there and, of course, Puerto Rico is gonna be a big, big part of maintaining that thrust to generate higher levels of ROE, which will translate automatically into very good earnings per share metrics,” Morris stated.
For Q3, SCI’s core revenues, or total investment income, jumped by 96 per cent, or US$1.66 million, to a record US$3.39 million, due to higher interest earnings. For the same period in 2023, the company earned US$1.73 million.
Over the nine months, total investment income of US7.54 million was 20 per cent more than in the corresponding period in the previous financial year.
Profit before tax of US$2.1 million for Q3 represented an increase of 38.6 per cent relative to the same period in 2023. Meanwhile, the nine-month profit before tax was relatively flat at US$4.51 million.
Still, Morris pointed out that given the Q1 and Q2 losses the company sustained in the current financial year, “I’m classifying this as a recovery… but in relation to where we were last year, we are still down. So if you look at the nine months result you’re gonna see the effect of that.”
Total assets for the SCI grew by over 30 per cent to US$198.6 million with earnings per share for the quarter up to US$0.35, compared to US$0.24.
https://our.today/puerto-rican-asset-drives-record-q3-earnings-for-sygnus-credit-investment/