Digital 9 Infrastructure (DGI9) H2 2024 earnings summary

Executive summary

• InfraRed, as new Investment Manager, implemented a realization plan focused on asset divestments, portfolio valuation transparency, and lender relationship stabilization following a challenging year marked by significant NAV declines and shareholder uncertainty.

• Key divestments included EMIC and Aqua Comms, with Sea Edge sale progressing and Verne's earnout mechanism under review; Elio and Arqiva are targeted for value enhancement and later exits.

• The realization plan prioritized repaying the revolving credit facility (RCF) and returning capital to shareholders, with a clear timeline for asset sales and distributions.

Financial highlights

• Final audited NAV for 2024 was £297 million (34.4p/share), down from £302 million in February and a 22% drop from £424 million in June.

• Aggregate completed and signed divestments (including Verne, Aqua Comms, EMIC) totaled £419 million.

• Loss per share was £0.45, reflecting significant write-downs and market skepticism, with market cap at a material discount to NAV.

• Major NAV reduction drivers: lower-than-expected proceeds from Aqua Comms and EMIC, a 9.6p reduction in Arqiva valuation, and other fair value adjustments.

Outlook and guidance

• RCF expected to be fully repaid by June 2025; Aqua Comms transaction to close by end of 2025, with shareholder distributions starting in early 2026.

• Elio and Arqiva exits targeted for 2027 onwards, with ongoing reassessment for earlier opportunities if value can be maximized.

• NAV now seen as a balanced reflection of value, with further material movements to be promptly disclosed.