Horizon Finance (HRZN) Q2 2024 earnings summary

Executive summary

• Net investment income for Q2 2024 was $12.9 million ($0.36 per share), down from $16.1 million ($0.54 per share) year-over-year, with total investment income of $25.7 million, mainly due to lower average earning debt investments.

• Net asset value per share was $9.12 as of June 30, 2024, down from $9.71 at year-end 2023 and $11.07 a year ago.

• Portfolio yield on debt investments was 15.9% for Q2 2024, with a diversified portfolio focused on technology, life sciences, healthcare, and sustainability sectors.

• Maintains a robust investment pipeline and significant capacity to invest, supported by a deeply experienced management team.

• Management remains optimistic about future prospects, citing strong portfolio yield, covered distributions for over six years, and strengthened liquidity.

Financial highlights

• Total investment income for the six months ended June 30, 2024, was $51.8 million, down 7.7% from the prior year period.

• Net investment income for the six months was $25.5 million, compared to $29.1 million for the same period in 2023.

• Net realized gains for the six months were $2.5 million, versus net realized losses of $16.7 million in the prior year.

• Net unrealized depreciation for the six months was $28.5 million, compared to $6.9 million in the prior year.

• Dividend yield stands at 10.96%; cumulative distributions per share since IPO total $18.81.

Outlook and guidance

• Management expects a return to portfolio growth in H2 2024, supported by a robust pipeline and committed backlog, with a focus on high-quality investments.

• Monthly distributions of $0.11 per share declared for October, November, and December 2024.

• The company believes current cash, operations, and credit facilities are sufficient to meet commitments for at least the next 12 months.