In This Article:
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NAV Increase: From 93.77 to 95.03 for the period ending 30 September 2024.
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Dividends Paid: 3.4375 pence per share, consistent with the full-year target of 6.78 pence per share.
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Dividend Cover: Cash covered at 1.06 times.
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Portfolio Yield to Maturity: 9.94%, slightly down from 10.02% at the end of the previous fiscal year.
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Total Return on NAV: 5.1% over the six-month period (not annualized).
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Share Price Total Return: 2.9% for the period, accounting for dividends.
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Share Buyback: 49.3 million shares bought back in the last six months.
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Portfolio ESG Score: Improved from 62.77 to 64.65.
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Interest Income: 5.4 pence per share over the period.
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Expenses: 0.8 pence per share.
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Investment Pipeline: Approximately 500 million in size with gross yields around 10%.
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Revolving Credit Facility: Renewed at 300 million with JP Morgan.
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Loss Rate: Reduced to 51 basis points per annum from 58 basis points at the end of fiscal year 2024.
Release Date: December 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sequoia Economic Infrastructure Income Fund Ltd (LSE:SEQI) reported a NAV increase from 93.77 to 95.03 over the six-month period, indicating strong portfolio performance.
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The fund maintained a consistent dividend payout, with dividends cash covered at 1.06 times, aligning with their full-year target.
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Significant progress was made in resolving nonperforming loans, with two out of three challenging positions addressed, including a near full repayment of Bulb.
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The fund has a strong pipeline of investment opportunities, approximately 500 million in size, with gross yields around 10%.
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Sequoia Economic Infrastructure Income Fund Ltd (LSE:SEQI) has made sustained ESG progress, with the portfolio ESG score improving from 62.77 to 64.65.
Negative Points
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The ordinary share price decreased slightly from 81.1 to 80.2, resulting in a share price total return of only 2.9% for the period.
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There is a significant gap between the NAV total return and the share price total return, reflecting a persistent NAV discount.
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The fund's performance has not been fully reflected in the stock price, despite strong NAV growth, leading to continued share buybacks.
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The portfolio's yield to maturity remained practically unchanged, indicating limited growth in yield over the period.
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The fund faces challenges in managing nonperforming loans, which require significant time and resources to resolve.
Q & A Highlights
Q: Do you have any plans to increase the dividend in 2025? A: The dividend is always reviewed by the board, but there have been no announcements to change the dividend. - Randall Sandstrom, CEO and CIO