Alaris Equity Partners Income Trust (AD-UN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached CAD 42.1 million, up 14% year-over-year, surpassing guidance due to new and follow-on investments.

• Net distributable cash flow for the six months ended June 30, 2024 was CAD 55.2 million (CAD 1.21 per unit), up 14% from the prior year after adjusting for non-recurring items.

• Book value per unit increased by CAD 0.90 to CAD 22.01 since December 31, 2023.

• CAD 77.5 million was deployed in new and follow-on investments in the first half of 2024, including Cresa and Shipyard.

• Stride investment was redeemed for $4.1 million, with a total return of 65% and a median IRR of 19% on exited investments.

Financial highlights

• Adjusted EBITDA for Q2 2024 was CAD 35.8 million (CAD 0.79 per unit), down 19.4% year-over-year due to lower realized/unrealized gains.

• Fully diluted earnings per unit for the six months ended June 30, 2024 were CAD 2.30, up 210.8% year-over-year.

• Q2 2024 partner distribution and transaction fee revenue reached CAD 42.1 million, up from CAD 36.9 million in Q2 2023.

• Common distributions in Q2 2024 were CAD 3.7 million, compared to CAD 1.2 million in Q2 2023.

• 12-month revenue run rate increased to CAD 163 million from CAD 158 million last quarter.

Outlook and guidance

• Q3 2024 total revenue from partners is projected at CAD 38.7 million, reflecting seasonally lower common distributions.

• 12-month common distribution outlook raised to CAD 12.5 million, including the first half of 2025.

• Run Rate Payout Ratio is expected to be between 65% and 70% based on current revenue, expenses, and capital structure.

• Active deployment expected in the second half of the year, aiming to surpass CAD 75 million invested in H1.

• Every CAD 50 million deployed at 14% is expected to add CAD 2.3 million to annual cash flow; a 1% SOFR increase would reduce cash flow by CAD 2.4 million.