Alaris Equity Partners Income Trust (AD-UN) Q3 2024 earnings summary

Executive summary

• Book value rose by CAD 0.78 per unit to a record CAD 22.80, with a nine-month increase of CAD 1.68 per unit and CAD 1.02 in dividends, yielding a year-to-date return on book value of CAD 2.70.

• Revenue for Q3 2024 was CAD 65.9 million, up 40% year-over-year, surpassing guidance, driven by higher common dividends, notably from Fleet, Edgewater, SMP, Amur, and Ohana.

• Net distributable cash flow for Q3 2024 increased by over 63% year-over-year to CAD 31.8 million, or CAD 0.72 per unit, with a payout ratio of 53%.

• Net distributable cash flow for the nine months ended September 30, 2024 was CAD 88.0 million, up 28% year-over-year after adjusting for non-recurring costs.

• Portfolio performance remains strong, with 10 of 19 partners above a 1.5x ECR threshold.

Financial highlights

• Common distributions for Q3 2024 were CAD 27.5 million, up from CAD 8.8 million in Q3 2023; year-to-date dividends reached CAD 31.8 million versus CAD 10.9 million in the prior nine months.

• Additional CAD 35 million invested in Ohana convertible preferred equity at a 14% yield; CAD 10 million invested in Cresa LLC preferred equity at 14% yield.

• Year-to-date investments total approximately CAD 139 million, including CAD 71.5 million in follow-ons and CAD 30 million in new partner Cresa.

• 12-month run rate revenue increased to CAD 171 million from CAD 163 million last quarter.

• Adjusted EBITDA per unit for Q3 2024 was CAD 1.98, up 12.5% year-over-year.

Outlook and guidance

• Q4 revenue outlook is CAD 38.9 million, with Fleet's distribution received earlier than expected.

• G&A expense outlook slightly increased to CAD 17 million.

• Run Rate Payout Ratio projected between 65% and 70%.

• Management expects some redemptions in 2025 after a period of low redemption activity.