TIDMSEQI
RNS Number : 5322U
Sequoia Economic Infra Inc Fd Ld
24 November 2023
RNS number:5322U
23 November 2023
Sequoia Economic Infrastructure Income Fund Limited
(the "Company")
Interim Results for the six months ended 30 September 2023
KEY HIGHLIGHTS
-- Resilient portfolio generating substantial cash despite
macroeconomic challenges, outperforming wider credit markets
o Stable NAV, at 92.88 pence per ordinary share (31 March 2023:
93.26)
o Total return on NAV of 3.3% for the period in line with long
term returns expectations of 7-8%
-- This substantially outperformed Gilts over the same period
(-7.7% total return) and consistent with leveraged loans and high
yield bonds
o Sustained income and cash flow supports decision taken in
November 2022 to raise the dividend by 10% with effect from
February 2023
-- Maintaining credit quality of the portfolio while still maintaining an attractive yield
o Well diversified portfolio of private debt investments secured
by infrastructure assets in low risk-jurisdiction with no single
investment accounting for more than 3.9% of NAV
o 59.4% of the portfolio in defensive sectors including
telecommunications, accommodation, utilities and renewables
o 53.5% of the portfolio in senior and 45.6% in mezzanine ranked
secured loans
o Improved the portfolio's overall ESG by allocating capital to
higher-rated opportunities and selling off legacy investments
-- Portfolio income expected to grow
o Short weighted-average life loan life of 3.6 years enables
timely redeployment of capital into higher yielding
opportunities
o 54.4% floating rate investments, capturing short-term rate
rises and reducing interest rate sensitivity
o Enhanced lending margins and more favourable credit terms
contributing to the overall performance have arisen from
challenging market conditions reducing options for raising
capital
-- Strong pipeline of investment opportunities, focused on resilience and credit quality
o Diverse array of attractive potential investments currently
under consideration
o Commitment to maintaining selective approach to new
investments, favouring highly defensive sectors with high barriers
to entry that provide essential services and that are expected to
benefit from an improving economic backdrop
o Focused on senior secured loans that also maintain or improve
portfolio diversification
-- Proactive approach to share price and discount management
o Increase in rating of the shares improved to a 10.4% discount
(31 March 2023: 13.8%), driven by share price growth to 83.20p (31
March 2023: 80.40p)
o Significant strategic share buy-back programme
o Directors and Investment Adviser team members participated in
share purchases during the period reflecting their confidence in
the Company
Robert Jennings, Chair, commented:
"I am delighted to announce another robust performance despite a
challenging economic backdrop over the last six months. Through the
actions that the team has taken, the business enjoys considerable
flexibility in facing future challenges and opportunities. The
substantial amount of cash generated by the portfolio has enabled
the Company to continue its balanced approach to capital
deployment. All Fund leverage has been repaid; the share buy-back
has continued; and the Investment Adviser has been able to deploy
capital selectively in a good number of new, high-quality
investments.
"This is my last set of results as Chairman of SEQI before I
step down at the end of December. I do so confident that SEQI is
well positioned for the future."
Randall Sandstrom, Director and CEO/CIO, Sequoia Investment
Management Company said:
"Whilst the global outlook remains uncertain, there are reasons
to be cautiously optimistic that we are closer to entering a less
malign economic environment. The portfolio is well positioned to
continue to provide security with our ongoing commitment to
prioritising quality, diversity, and cash generation. Inflation is
falling in the US, UK and Europe and consumer spending in the US is
driving strong economic growth. However, our investment strategy
remains focused on positioning the portfolio against potential
further downturns through investments in economic infrastructure
assets with highly defensive characteristics, maintaining credit
quality and delivering attractive and sustainable returns."
INVESTOR PRESENTATION
The Investment Adviser will host a presentation on the annual
results for investors and analysts today at 10:00am GMT. There will
be the opportunity for participants to ask questions at the end of
the presentation. Those wishing to attend should register via the
following link:
https://brrmedia.news/SEQI_HYR
The presentation will be hosted by Randall Sandstrom, Matt
Dimond and Reem ElAshmawy. Steve Cook is currently on medical
leave.
Copies of the Interim Report will shortly be available on the
Company's website www.seqifund.com and on the National Storage
Mechanism.
For further information, please contact:
Sequoia Investment Management Company
Limited +44 (0)20 7079 0480
Steve Cook
Dolf Kohnhorst
Randall Sandstrom
Greg Taylor
Anurag Gupta
Matt Dimond
Jefferies International Limited +44 (0)20 7029 8000
Gaudi le Roux
Stuart Klein
Teneo (Financial PR) +44 (0)20 7260 2700
Martin Pengelley sequoia@teneo.com
Elizabeth Snow
Sanne Fund Services (Guernsey) Limited
(Company Secretary) +44 (0)20 3530 3667
Matt Falla
Lisa Garnham
About Sequoia Economic Infrastructure Income Fund Limited
The Company seeks to provide investors with regular, sustained,
long-term distributions and capital appreciation from a diversified
portfolio of senior and subordinated economic infrastructure debt
investments. The Company is advised by Sequoia Investment
Management Company Limited.
Chair's statement
"Our business has emerged in good shape and through the actions
that the team has taken, enjoys considerable flexibility in facing
future challenges and opportunities."
It is my pleasure to present to you Sequoia Economic
Infrastructure Income Fund Limited's (the "Company" or "SEQI")
Interim Report for the six--month period ended 30 September
2023.
Overall, the portfolio remains resilient, and continues to
generate substantial amounts of cash despite ongoing macroeconomic
challenges. Inflation was high during the period, interest rates
rose, and economic growth remained sluggish. Our robust performance
against this backdrop is evidence of our key portfolio attributes,
including wide diversification, with the average loan only
representing about 2% of the portfolio, and a relatively short
average maturity, which allows loan repayments to be redeployed
into higher yielding opportunities. The Company has maintained its
"balanced" approach to capital deployment: all fund leverage has
been repaid; the share buy-back has continued; and the Investment
Adviser has been able to deploy capital selectively in a number of
high-quality new investments. We strongly believe that this is a
sensible approach and delivers flexibility in a period of
uncertainty and elevated volatility. Our solid results for this
half year, and the increase in our dividend with effect from the
payment in February 2023, bear this out.
NAV and share price performance
Over the first half of this financial year, the Company's NAV
per ordinary share fell by approximately 0.4%, from 93.26 to 92.88.
Over the same period, the Company paid dividends of 3.4375p per
ordinary share, consistent with our increased full year target
dividend of 6.875p, resulting in a total NAV return of 3.3% (not
annualised).
Total return over the six-month period
--------------------------------------- -----
SEQI share price 7.9%
SEQI NAV 3.3%
Leveraged loans 3.3%
High yield bonds 3.8%
Gilts -7.7%
--------------------------------------- -----
This performance was a much better return than Gilts over the
same period and is comparable to the returns seen on other types of
debt investments such as leveraged loans and high yield bonds.
Since its IPO the Company has outperformed comparable asset classes
by a significant margin. For example, GBP100 invested in high yield
bonds at the time of the Company's IPO would now be worth
GBP121.33; GBP100 invested in a 10-year Gilt would now be worth
GBP110.95; while the same amount of money invested by the Company
would now be worth GBP137.55 (in all cases assuming that income is
reinvested).
During the half year, the Company's share price improved from
80.40p to 83.20p, reflecting a narrowing of the discount to NAV
from 13.8% to 10.4%. After taking account of dividends, this
resulted in a total return(2) over the six months to 30 September
2023 on the ordinary shares of 7.9% (not annualised).
While the share price clearly reflects the wider malaise in the
UK listed fund sector (and especially so for alternative assets
such as private debt, infrastructure and renewable energy), the
Company has continued to support NAV per share through the buy-back
programme. Commencing in July 2022 we have strategically bought
back shares in the market, and the Directors and certain members of
our advisory team have demonstrated their faith in the business by
purchasing shares in their own capacity. Over the half year, the
Company bought back 53,649,927 shares, making it one of the largest
buy-back programmes across listed alternative assets on the
LSE.
We do not believe that the levels of discount to NAV that we
have seen reflect the Company's long-term prospects, the resilience
of its investment portfolio, or its ability to generate attractive
returns for our shareholders, and we anticipate that if unwarranted
levels of discount occur, we will continue to buy shares in the
market as appropriate.
The Board also notes the potential for a positive shift, as we
move into 2024, in the external capital market dynamics which have
impacted on SEQI and the broader investment company market over the
last 18 months, and which have contributed to this unusual period
of share price discounts to NAV. We would expect that, as the
interest rate cycle peaks in our target markets, this will result
in some reversal of investment capital outflows - which have
generally been moving away from liquid alternatives and into
government bonds and money market instruments.
Portfolio performance
As explained above, the NAV over the period was approximately
flat, which reflects the resilience of our portfolio in the context
of a challenging economic environment where rising interest rates
have been a persistent headwind.
One significant advantage we have over many funds in the
alternative funds sector is the flexibility embedded in our
portfolio: our investments are typically of short duration, with a
weighted average life of less than four years. As a consequence,
our portfolio is highly cash generative, which has allowed us to
support our share buy-back programme, to repay all the Fund's
leverage and to reinvest capital into new, attractive investment
opportunities. This is a significant differentiator of our Fund
relative to other illiquid alternatives in the market.
Regarding credit risk, there are a few notable points that
should be borne in mind. Firstly, the portfolio is highly
diversified, with the average loan only representing about 2% of
the total portfolio and the largest 4.3%. This means that if a loan
goes bad, at worst it has only a limited impact. Nonetheless, as
with any portfolio of sub-investment grade loans, there will
inevitably be some borrowers who experience financial
difficulties.
Secondly, the historical experience is that, when loans to
infrastructure projects default, lenders on average enjoy a high
level of recovery, compared to other forms of corporate credit. The
combined effect of these two factors is that the financial impact
of bad debts on portfolio performance has been limited: the "loss
rate" for the portfolio (being credit losses, annualised and
expressed as a percentage of the amount lent) is only 0.58%. This
compares to an estimated 1.6% annual loos rate for broader
corporate bonds of a similar credit quality.
At our half year end, only 3.1% of the portfolio is in a full
restructuring, with a further 8.5% subject to a higher-than-normal
level of scrutiny. These levels are only marginally higher than at
the end of the previous financial year.
When a loan defaults or the borrower gets into difficulty, our
Investment Adviser works diligently to ensure that the Company
maximises its recovery.
Investment market outlook
The economic outlook in the US, UK and other developed economies
where the portfolio is invested remains challenging, but there are
reasons to be cautiously optimistic. Inflation is now falling quite
rapidly in the US, UK and Europe. Interest rates set by Central
Banks may have peaked in most of the jurisdictions where the
Company invests. In the US, consumer spending is driving strong
economic growth. Without wanting to sound falsely optimistic, these
trends give hope that we may be close to entering a less
challenging economic environment.
However, we have not invested on the basis of such optimism. In
fact, our strategy has been to find investments which will be
resilient even if things do not improve. For a significant period
now the Investment Adviser has focused on making senior secured -
rather than subordinated - loans, and has favoured sectors of the
infrastructure market with defensive characteristics rather than
cyclical sectors.
We are of the view that the time is now right to lock in some of
the high rates currently being earned on our floating rate loan
portfolio, and shortly after the period end the Company entered
into our first fixed floating swap transaction. The effect of this
transaction will be to enhance our dividend cover ratio over the
next seven years if policy interest rates fall from their current
levels.
Dividend
Portfolio interest income has grown strongly over recent years,
as the interest earned on our floating rate loans has increased,
and income from our recent investments reflects today's higher
interest rate environment. This enabled the Company to increase its
dividend with effect from January 2023 by 10% to 6.875p per
ordinary share. In this half year, our dividend remains fully cash
covered by a factor of 1.08x. This is within the range of
historical levels of circa 1.05x to 1.10x, despite lower returns
from the Company's net cash, and the absence of accretion from any
leverage.
Our expectation is that portfolio income will continue to grow,
as existing loans mature, and proceeds are redeployed in today's
higher rate environment. If this transpires, the Board will reflect
again on how best to return value to Shareholders. For the time
being though, with our share price disappointingly continuing to
languish at a significant discount to NAV, we believe it is
appropriate to focus surplus income on our share buy-back
programme.
Governance matters
a. Environmental, social and governance ("ESG")
We remain focused on and committed to our ESG strategy, despite
recent market volatility and ongoing economic uncertainty.
Investing our Shareholders' capital in a responsible way and
engaging on ESG topics with the companies that we lend to remain
core parts of our investment philosophy. We continue to use our
proprietary methodology to assess carefully a number of E, S and G
metrics to produce an ESG score for every portfolio asset and
potential investment in our pipeline. We aim to use this part of
our due diligence process to target higher-scoring assets and avoid
or dispose of assets that we deem to be less sustainable. However,
we recognise the importance of transition assets and borrowers who
themselves have a transition strategy, which can result in lower
ESG scores at the point of investment but should result in a score
increase over time. This, in combination with our other ESG
initiatives, should result in an increasing ESG score for our
portfolio of assets. Noting factors that are outside of the Fund's
control, such as exchange rates and early unanticipated repayments,
we have generally been successful in doing so consistently since
the methodology was adopted. This period marks another gradual
increase in our average ESG score across the portfolio. This
principally stemmed from the disposal of low-scoring assets and an
active and accelerating step-up in our engagement efforts with
borrowers in this half year. We seek to continually evolve our
approach to ESG in a fast-moving backdrop. This period, we updated
our ESG scoring framework to keep abreast with best practices and
latest thinking - most notably this meant reassessing the
sustainability profile of the nuclear sector, as described in the
sustainability report below.
In the most recent Annual Report, we published our second Task
Force on Climate-Related Financial Disclosures ("TCFD") report as
well as our first periodic disclosure under the Sustainable Finance
Disclosure Regulation ("SFDR") as an Article 8 fund. Over the
coming years, we will see an increasing level of disclosure and
reporting on ESG matters under a range of different frameworks. We
believe that transparent and reliable reporting plays a significant
role in the progression of responsible investing, but it is not
without challenges for a debt fund. We invest internationally and
are discovering that the quality of ESG reporting is not consistent
across different geographies. In addition, smaller borrowers
especially lack the resources needed to be able to measure certain
datapoints. However, we are working with our borrowers to gather
the necessary quantitative data that will be required in the
future. We aspire to be a pioneer in the listed debt fund sector
with regard to the quality and accuracy of our ESG reporting to
investors.
b. Risk
Over recent months we have undertaken a review of how we monitor
risks internally. As a result of this review, we have made
improvements to the Company's Risk Register. Better defined risk
classifications, finer definitions of risk levels, and indications
on direction of travel make the document easier to use and more
informative. In the future, we will modify the format and expand
the information contained in the principal risks sections of our
Annual and Interim reports. We believe that these changes will
facilitate and benefit risk management of our operations and will
provide Shareholders with a better understanding of the Company's
risk profile.
c. Shareholder information
Another significant initiative which the Company has recently
undertaken has been to improve the quality of its dialogue with
current and prospective Shareholders. In respect of this, we were
delighted to win the AIC award for the Best Investor Factsheet. It
has always been a strength of our communications programme that we
update NAV on a monthly basis following a rigorous process of
review by our external valuation agent, PwC. In times when interest
rates and the conditions in credit markets are changing rapidly, we
believe the emphasis that we place on providing timely and accurate
updates is of great value to the market as a whole and, for that
matter, to the Board.
d. Board
We have announced that James Stewart, who joined our Board two
years ago, will take over from me as Chair of the Board with effect
from the start of 2024, and that I will be stepping down at that
time. This development has been planned for a while and I am
delighted that James is to be my successor as he is ideally suited
to the role.
As previously reported, we have undertaken an extensive external
search to recruit an additional Director. This process attracted a
number of high calibre applicants and we are now close to
finalising this appointment.
Concluding comments
It has been a great privilege to serve as inaugural Chair of
SEQI for the last nine years. In that time, I have witnessed a
talented group of people within our Investment Adviser and other
key service providers come together to plan, form and manage the
first (and still the only) exclusively debt-backed infrastructure
fund listed on the London market. On several occasions in earlier
reports, I noted how impressed I was by how well and effectively
the key individuals at a number of disparate organisations who
support your Company have pulled together as a team. To all of you,
thank you for the vital contributions you have made.
I also wish to thank my fellow Board colleagues, both past and
present, and our consultants for the support and contributions they
have all made over the years, which have allowed our Board to
function well and effectively.
Over the past three years, with the combination of the pandemic,
followed by the sharp rise of sovereign interest rates, our
investment thesis, processes, portfolio and service providers have
been thoroughly stress-tested. Our business has emerged in good
shape and through the actions that the team has taken enjoys
considerable flexibility in facing future challenges and
opportunities. The basis for improving shareholder returns as
markets recover is, I believe, fully in place by virtue of the
well-balanced and diversified portfolio, exceptional and
experienced team across all critical disciplines and balance sheet
strength. I am confident that in due course this will allow you,
our Shareholders, who have supported us through the last nine years
and most particularly through the recent tough period, to reap the
rewards of your patience and loyalty.
Robert Jennings
Chair
23 November 2023
Investment Adviser's report
"While the global outlook remains uncertain, the portfolio is
well-positioned... There are reasons to be cautiously optimistic
that we are closer to entering a more benign economic
environment."
The Investment Adviser's objectives for the year
Over the course of the first half of the financial year, Sequoia
Investment Management Company Limited ("Sequoia" or the "Investment
Adviser") has had the following objectives for the Company:
Goal Commentary
Gross portfolio return The Company is fully invested with a portfolio
of 8-9% that currently yields in excess of 10%(4)
, due to continued increases in long-term
interest rates over the period
Manage the portfolio The Fund has previously positioned its portfolio
responsibly through an beneficially to take advantage of the rise
inflationary and rising in interest rates and is now locking in these
interest rate environment higher rates, reflected by a decrease in
the floating rate proportion of its portfolio
from 58.4% at 31 March 2023 to 54.4% at 30
September 2023
Follow a sustainable The Fund has improved the overall ESG score
investment strategy of its portfolio from 62.29 to 62.84 by reducing
its exposure to low-scoring investments,
and also by increased ESG engagement with
the companies that it lends to.
Timely and transparent The Company's Factsheet (which was awarded
investor reporting the AIC's 2023 Shareholder Communication
Award for Best Factsheet), commentaries,
and full portfolios have been provided monthly
for full transparency, and investor engagement
has continued over the first half of the
financial year
Continue to improve The Fund reviewed and updated its ESG framework,
the ESG profile of the given the continually evolving nature of
Company and the portfolio ESG, to ensure it remains up to date and
best reflects current thinking and the future
direction of travel
Dividend target of 6.875p The Company paid two quarterly dividends
per ordinary share per of 1.71875p per ordinary share in line with
annum its dividend target, amounting to a total
of 3.4375p
-------------------------- -------------------------------------------------
Economic infrastructure is a diverse and highly cash --
generative asset class
Economic infrastructure debt is a type of investment that is
widely acknowledged for its stability and dependability. This asset
class exhibits a set of key characteristics that makes it appealing
to investors. Firstly, it is characterised by high barriers to
entry, making it challenging for new entrants to penetrate the
market, which, in turn, provides a protective shield for existing
investors. Secondly, the cash flows generated by economic
infrastructure debt are typically steady and foreseeable, ensuring
a reliable income stream for investors. This is primarily
attributed to the essential nature of the services, which ensures a
constant level of demand. Finally, the physical assets supporting
economic infrastructure debt serve as tangible collateral,
providing a means to secure the investment.
These features have resulted in economic infrastructure debt
becoming an increasingly sought-after asset class for investors
seeking a stable income source and a trustworthy long-term
investment.
Economic infrastructure debt spans sectors like transportation,
utilities, power, telecommunications, and renewables. These sectors
often rely on long-term concessions or licenses, with revenues tied
to demand, usage, or volume. In contrast, social infrastructure,
like parks and hospitals, receives compensation merely for the
availability of physical assets.
To mitigate demand risk, economic infrastructure projects are
typically less leveraged than social infrastructure, maintain
higher equity buffers, conservative credit ratios, robust loan
covenants, and more significant asset backing for lenders. This
principle has held steady throughout the first half of the
financial year, guiding the Fund's investment strategies.
Despite market volatility during the period, the Fund
proactively positioned its portfolio defensively against potential
downturns. Measures taken include a focus on senior debt and on
non-cyclical industries. These actions have helped to mitigate
risks from the current inflationary market conditions and other
global uncertainties, such as the ongoing war in Ukraine and the
conflict in the Middle East .
Furthermore, as sustainability remains a prominent investment
focus, the Fund recognises that investing in new economic
infrastructure is often pivotal for implementing the latest
technologies and manufacturing processes into established
industries. This opens the door to an array of ESG-incorporating
investment opportunities, benefiting not only the Fund's portfolio
but also the modernisation of sectors traditionally marked by
formidable barriers to entry.
The market environment during the period
While infrastructure debt benefits from inherent revenue
stability, the Fund's valuations are not unaffected by the record
movements observed in the financial markets over the last six
months, particularly the rapid decline in government bond prices.
For context, the FTSE All-Share Index, representing the overall
London equity market, increased by 1.2% over the last six months,
while the FTSE 250, tracking mid-cap companies, declined by 1.5%
during the period. 10-year Gilts (UK government bonds) decreased by
7.7%, leveraged loans increased by 3.3%, and high yield bonds rose
by 3.8%. These figures include dividends or interest income,
providing annualised total returns for the period.
The US, UK, and Europe have seen their respective inflation
figures fall further in the last six months from the peaks observed
in the last fiscal year. However, the current narrative driving the
underperformance of government bonds is no longer a continuation of
interest rate hikes from central banks, as these are assumed to
have reached, or be close to, their terminal value. Instead, the
focus has shifted to the sustainability of a high-interest rate
environment given each region's respective economies, and the
timing of any fall in rates.
The performance of the Fund's private debt portfolio is
sensitive to fluctuations in interest rates and credit spreads
within liquid markets. On the one hand, the valuation of the Fund's
investment holdings may be adversely impacted by downturns in
government debt, high yield bond or leveraged loan markets - in
general though, such fluctuations are unrealised mark-to-market
changes that will reverse as our loans approach their maturity
date. On the other hand, the Fund derives real advantages from
these adverse market conditions. Infrastructure businesses have
faced limited options for capital raising, which increased the
Fund's pricing power. This, in turn, resulted in enhanced lending
margins, more favourable credit terms, or a combination of both,
ultimately contributing to the Fund's overall performance.
Therefore, despite market challenges, the Fund's infrastructure
debt investments continue to offer investors an appealing
risk-return profile.
Market backdrop
Inflation
What is happening?
Inflation is past its peak levels in all of the Fund's
investment jurisdictions, as disinflation takes hold in most
developed markets globally.
Why this matters to SEQI?
As inflation drops, term interest rates would be expected to
fall, which makes alternative investments such as infrastructure
more attractive compared to liquid credit. Also, lower inflation
leads to less cost pressure during the construction of a project,
decreasing construction risk, all else being equal .
Interest Rates
What is happening?
Short-term interest rates are expected to have reached their
peak rates in the US, UK and Europe.
Why this matters to SEQI?
The portfolio's floating rate investments will start to de-risk
as their borrowing costs peak. A lower interest rate environment is
also supportive of fixed rate loans and bonds, which would be
expected to help the pull-to-par of our fixed rate assets. Further,
as short-term rates begin to fall, yield curves will become less
inverted or turn positive again, supporting a bid for risk in the
market.
Commodity prices
What is happening?
The Commodity Research Bureau Index has peaked ahead of
inflation rates in the US due to built-up demand during the Covid
pandemic.
Why this matters to SEQI?
Goods make up a large portion of inflation, and as commodity
prices cool, inflation can be expected to soften, lowering the cost
of construction and taking pressure off interest rates, all else
being equal.
Portfolio overview
During the first six months of the financial year, our
continuing strategic approach revolved around the ongoing
construction and management of a well-diversified portfolio of
private debt investments secured by infrastructure assets situated
in low-risk jurisdictions. Our primary objective has been to uphold
our targeted returns while placing a strong emphasis on mitigating
undue credit and ESG risk. Throughout this timeframe, we remained
committed to the prudent investment strategies established in 2019.
These strategies encompass retaining a significant portion of the
portfolio in defensive sectors, giving precedence to senior debt
over mezzanine debt, and either maintaining or incrementally
enhancing the credit quality of the portfolio.
In response to the market challenges, our diversified approach
to private debt investment has proven effective in delivering
robust returns and adeptly managing risk. Consequently, we have
been able to capitalise on fresh opportunities for financing
high-quality infrastructure projects. By steadfastly adhering to
this strategy, we maintain a high level of confidence in our
capacity to consistently provide attractive returns to our
investors while skilfully mitigating risk in this demanding market.
Current portfolio highlights reflecting the impact of these efforts
include:
-- 59.4% of the portfolio in defensive sectors. These include
telecommunications, accommodation, utilities, and renewables, which
are viewed as defensive because they provide essential services,
often operate within a regulated framework and have high
barriers-to-entry.
-- 32.5% of the portfolio in the telecommunications sector that
continues to perform as previous PIK assets become cash-paying and
the appetite for infrastructure such as data centres grows.
-- 53.5% of the portfolio in senior and 45.6% in mezzanine
ranked secured loans, as opposed to more of a 50-50 blend to
position the portfolio for a slow-growth environment.
-- Improved credit quality of the portfolio over the last 12
months without a reduction in targeted yields. Our policy not to
invest in CCC profile loans remains in place.
-- Continued low modified duration of 1.5, with 54.4% of the
portfolio in floating rate deals and 45.6% in short-term fixed rate
assets and a current low portfolio weighted-average life of 3.6
years.
The Fund's investment portfolio is diversified by borrower,
jurisdiction, sector and sub-sector, with strict investment limits
in place to ensure that this remains the case.
The Fund maintains a distinct emphasis on investing in regions
characterised by stability and minimal risk, in alignment with its
established investment criteria. This leads the Fund to restrict
its investment activities to countries meeting established
standards, such as being classified as investment-grade. The Fund's
investment strategy revolves around the identification of
opportunities offering favourable risk-adjusted returns while
prudently avoiding potential obstacles, notably regulatory and
legal risks.
At the core of the Fund's strategy is a primary focus on private
debt, which constitutes almost all of its portfolio. This strategic
approach is driven by the fact that private debt typically offers
an "illiquidity premium", i.e. a higher return compared to liquid
bonds with similar characteristics. Given the Fund's predominant
"buy and hold" investment approach, capturing this illiquidity
premium is deemed a prudent strategy. Research from the Investment
Adviser confirms the existence of this additional premium,
suggesting that infrastructure private debt instruments tend to
yield 1-2% more than similar publicly rated bonds.
NAV and Fund performance
The Fund adopts a prudent stance in its investment endeavours,
particularly with regard to the risk associated with greenfield
construction projects. Although the Fund is open to allocating up
to 20% of its NAV for lending to such ventures, its actual exposure
to assets under construction as of 30 September 2023 stood at 11.2%
of its overall portfolio. The Fund exercises careful discretion in
project selection, exclusively investing in those where it
perceives that it is adequately compensated for the moderate
construction-related risks it undertakes. Additionally, the Fund
maintains stringent criteria for evaluating the inherent strength
of the borrower's business or project to ensure effective risk
mitigation.
Over the last six months, the Company's NAV per share decreased
from 93.26p per share to 92.88p per share ex-dividend, driven by
the following effects:
Factor NAV effect
----------------------------------------------------------- ----------
Interest income on the Company's investments 5.17p
Gains on foreign exchange movements, net of the effect of
hedging 0.15p
Portfolio valuation movements (1.98)p
IFRS adjustment from mid-price at acquisition to bid price (0.06)p
Operating costs (0.66)p
Gains from buying back shares at a discount to NAV 0.44p
----------------------------------------------------------- ----------
Gross increase in NAV 3.06p
Less: Dividends paid (3.44)p
----------------------------------------------------------- ----------
Net decrease in NAV after payment of dividends (0.38)p
----------------------------------------------------------- ----------
The total return on the NAV was equal to 3.3% over the period,
equivalent to 6.6% p.a. This is broadly in line with the Company's
long-term return expectations of 7-8% p.a. Once again, the
portfolio has outperformed other investments over the period
including the FTSE All-Share Index by 2.1%, the FTSE 250 by 4.8%
and 10-year Gilts by 11.0%, while performing in line with leveraged
loans and falling slightly behind high-yield bonds by 0.5%.
As evident from the table provided above, the principal factor
that positively influenced NAV performance was the interest income
derived from investments. Slightly offsetting some of this income,
the Company's investments suffered a small decline in values,
mostly as a result of rising discount rates, with only a third of
the portfolio valuation movements being attributable to the
Company's non-performing loans. It is worth noting that such
mark-to-market price declines represent unrealised losses and are
anticipated to gradually reverse over time, as loans approach their
maturity date (the "pull-to-par" effect).
The Investment Adviser believes that the portfolio is well
positioned to continue to outperform the liquid credit markets for
the following reasons:
-- private debt has higher yields than liquid credit, for a like-for-like credit quality;
-- debt supported by infrastructure exhibits resilience due to
higher asset backing. This resilience is evident in the Fund's
lower loss rates compared to broader liquid credit, again, when
considering equivalent credit quality.
-- mitigation of interest rate sensitivity through a significant
proportion of floating rate debt in the portfolio (54%), resulting
in a low level of sensitivity to changes in interest rates;
-- relatively short debt maturities, allowing the fund to
rapidly recycle capital in the currently attractive lending
markets; and
-- a high level of portfolio diversification by sector,
sub-sector and jurisdiction, thereby minimising the impact of
single asset-, sector- and country-specific political and economic
risks.
Share performance
As at 30 September 2023, the Company had 1,681,169,626 ordinary
shares in issue (31 March 2023: 1,734,819,553). The closing share
price on that day was 83.2p per share (31 March 2023: 80.40p per
share), implying a market capitalisation for the Company of
approximately GBP1.4 billion, a slight increase of circa GBP3.9
million compared to six months ago.
After taking account of the two quarterly dividends amounting to
3.4375p per ordinary share, the share price total return over the
period was 7.9%, equivalent to an annualised total return of 15.8%.
The observed 2.8p increase in the share price over the first two
quarters of the year was driven by two factors:
-- the change in NAV as discussed above; and
-- an improvement in the rating of the shares from a 13.8%
discount to a 10.4% discount.
A significant contributing factor to the share price discount is
the negative market sentiment surrounding alternative assets,
including debt funds. This, in the opinion of the Investment
Adviser, arises in part from concerns around persistent inflation
and low growth, combined with some loss of trust in the accuracy of
alternative fund valuations generally. The Investment Adviser
wishes to reassure investors that the Fund's valuations are
performed independently and reflect the true value of its assets,
and unlike the majority of private equity, infrastructure equity
and real estate equity funds, are published on a monthly basis.
However, outflows of capital from investors, reallocating from
liquid alternatives into government bonds and money market
instruments which offer recently increased levels of yield, have
exacerbated the problem, as 'forced sellers' have driven share
prices across the sector lower; although we see some recent
stabilisation in this effect as policy interest rates across key
markets seem to have peaked.
Both the Investment Adviser and the Company's Directors view the
current share price discount to NAV as disproportionate. They are
of the opinion that it fails to reflect the investment portfolio's
potential to deliver attractive risk-adjusted returns during
uncertain economic periods, its shorter investment duration and
robust NAV approach. With this belief, the Fund continues to
repurchase its ordinary shares, considering them undervalued, which
provides NAV accretion for current shareholders. Within the last
six months alone, the Company has repurchased 53,649,927 shares.
The share buy-back programme was first announced to Shareholders in
July 2022, and the Company has since bought back a total of
87,069,372 shares, close to 5% of its total outstanding shares, as
at 30 September 2023. This has provided Shareholders with an
increase in NAV per share of 0.6p since the buy-back programme was
implemented.
Dividend cover
The Company has paid 3.4375p in dividends during the last six
months in accordance with its target.
The Company's dividend cash cover was 1.08x for the first half
of the financial year. This is lower than in the previous year, for
the following reasons:
-- The Company has crystalised less capitalised interest
compared to last year, namely around GBP5 million in the period
compared to GBP20 million in the prior year. However, this
non-materialised PIK interest will be received at a later date as
investments repay;
-- The Company has increased its dividend target from last year
as the Board was confident in the level of income produced by the
portfolio. Given that the Company's dividend remains comfortably
cash-covered, the portfolio's floating rate assets have
successfully offset the higher dividend payments; and
-- The Company has repaid its Revolving Credit Facility ("RCF")
balance in full whilst building up increased levels of liquidity.
As a result, the income generated by the spread between RCF
utilisation cost and yield on investments funded by such drawings
has not been captured in the period.
Overall, the above-mentioned factors are either transient, or
the result of other positive developments for the Company.
Fund performance
30 September 31 March 2023 30 September
2023 2022
---------------------- ---------------------- ------------ ------------- ------------
Net asset value per ordinary share 92.88p 93.26p 93.64p
---------------------- ---------------------- ------------ ------------- ------------
GBP million 1,561.5 1,617.9 1,634.9
--------------------------------------------- ------------ ------------- ------------
Cash held (including
in the Subsidiaries) GBP million 141.7 68.7 38.2
---------------------- ---------------------- ------------ ------------- ------------
Drawings on RCF GBP million 0.0 181.8 193.0
---------------------- ---------------------- ------------ ------------- ------------
percentage of net
Invested portfolio(1) asset value 90.3% 106.5% 116.0%
including investments
Total portfolio in settlement 92.2% 109.6% 121.3%
---------------------- ---------------------- ------------ ------------- ------------
1. Relates to the portfolio of investments held in the
Subsidiaries
Portfolio characteristics
30 September 31 March 2023 30 September
2023 2022
------------------------- ----------------------- ------------ ------------- ------------
Number of investments 57 68 72
-------------------------------------------------- ------------ ------------- ------------
Valuation of investments GBP million 1,410.2 1,723.5 1,924.5
------------------------- ----------------------- ------------ ------------- ------------
Single largest
investment GBP million 60.2 61.0 64.3
percentage of NAV 4.3% 3.8% 3.9%
Average investment
size GBP million 23.5 25.3 25.0
------------------------- ----------------------- ------------ ------------- ------------
by number of invested
Sectors assets 8 8 8
Sub-sectors 27 26 28
Jurisdictions 10 12 11
-------------------------------------------------- ------------ ------------- ------------
percentage of invested
Private debt assets 97.3% 98.1% 96.3%
Senior debt 53.5% 57.2% 59.2%
Floating rate 54.4% 58.4% 56.9%
Construction risk 11.2% 14.2% 12.3%
-------------------------------------------------- ------------ ------------- ------------
Weighted average
maturity years 4.2 4.1 4.6
Weighted average
life years 3.6 3.5 3.9
Yield-to-maturity 10.9% 11.9% 11.2%
Modified duration 1.5 1.5 1.6
-------------------------------------------------- ------------ ------------- ------------
As can be seen in the table above, the Fund has reduced its
number of investments from 68 to 57 within the last six months. The
Investment Adviser has selectively decided not to redeploy some of
the capital received from maturing assets, instead using these
proceeds to de-lever the Fund, increase the liquidity available to
the Company and buy back shares while they are trading at a
discount. The decrease in investments has been actively managed so
as not to impact the diversification the Fund provides to its
investors; the portfolio remains invested in 8 different sectors
and has increased its sub-sector count to 27 from 26 at the prior
year end. Furthermore, some of the exited positions were
construction assets, which has allowed the Company to de-risk the
portfolio even further.
Credit performance
Looking at the overall portfolio, the credit performance
remained positive over the course of the last six months. Given
that the portfolio is comprised of high-yielding debt instruments,
one would expect a small portion of investments to encounter some
credit challenges over the course of their lifespan. The Company's
experience to date is that credit losses have only been a modest
drag on investment returns, contributing to a loss rate of
approximately 0.58% per annum. This compares well to non-financial
corporate debt of a similar credit rating, where the historical
annual loss rate is approximately 1.6%.
Lenders have a duty of confidentiality to the companies that
they lend to, and so it is the Company's policy not to discuss
underperforming loans by name, other than where the borrower has
entered into an insolvency process (such as administration in the
UK, or Chapter 11 in the US). It is easy to see how a public
discussion of an underperforming business could exacerbate its
problems, for example by making it harder to retain employees or
secure new contracts.
Progress continues to be made on managing the Company's loans in
restructuring or receiving enhanced scrutiny. Overall we do not
foresee that the NAV will be materially impacted by these ongoing
discussions.
However, although the current economic environment has its
challenges, infrastructure has been resilient and the overall
credit quality of the Company's investment portfolio remains high.
Inflation is falling (especially in the US), energy markets are
normalising and interest rates appear to be at or near their peak
levels. These stabilising macro-economic themes provide a
foundation for steadier credit markets and are further explored in
the "Market backdrop" section.
Balance sheet management
Over the six months following the end of the previous financial
year, the Fund has successfully repaid all of its outstanding
revolving credit facility loans. Initially, it had a net leverage
position of GBP113.1 million, which included a GBP181.8 million
draw on the Company's revolving credit facility and a cash reserve
(including cash held in the Subsidiaries) of GBP68.7 million as at
31 March 2023. This position has since transitioned to an undrawn
revolving credit facility and a cash balance of GBP141.7 million.
While the Fund has actively been building its liquidity, it does
not intend to maintain these high cash levels, in order to avoid
unnecessary cash drag. The increased cash balance was largely due
to the complete repayment of a significant loan on the final
business day of the period. The current high liquidity position
offers the Fund the flexibility to allocate capital as needed while
also reducing volatility related to its financial obligations. The
Investment Adviser therefore continues to originate deals in the
credit market on a daily basis and currently manages a dynamic
pipeline of potential deals that have been pre-screened for
suitability of over GBP400 million. Given the current portfolio
composition, the Fund is actively originating in sectors that would
benefit from increased exposure such as Transport Systems and
Transport Vehicles. Further details can be found in the "Strong
pipeline of opportunities" section of the Investment Adviser's
Report.
Portfolio valuation
Currently, the average single B or higher-rated loan in the
portfolio is marked at a price of about 95 pence in the pound; this
mostly reflects the higher interest rates and credit margins used
to value the loan, compared to those available in the market at the
time the loan was made.
Over time, as loans marked down due to the above-mentioned
effects approach their repayment dates, we will see their
valuations accrete back up to 100 pence in the pound - this is the
so-called "pull-to-par" effect.
These NAV estimates are calculated on the basis that interest
rates and bond yields remain constant and do not take into account
NAV-accretive mechanisms other than the pull-to-par; the only
variable is the passage of time.
Non-performing loans are excluded from the calculation. In
monetary terms, the pull-to-par is expected to be material over the
next three years:
Pull-to-par Pull-to-par
(GBPm) (pence
Period per share)
------------------------------------ ----------- -----------
1 October 2023 to 30 September 2024 17.2 1.0
1 October 2024 to 30 September 2025 15.8 0.9
1 October 2025 to 30 September 2026 13.6 0.8
1 October 2026 and after 26.4 1.6
------------------------------------ ----------- -----------
Origination activities
The Fund's investment strategy targets assets in both the
primary and secondary debt markets, with each offering unique
advantages. Investing in the primary market allows the Fund to earn
upfront lending fees and tailor its investments to meet specific
requirements. Acquiring assets in the secondary market facilitates
the rapid deployment of capital into seasoned assets with proven
performance records.
Primary market origination
The Fund maintains its focus on the primary loan markets, which
continue to present significant opportunities. The Investment
Adviser actively sources bilateral loans and participates in "club"
deals where a small group of lenders collaborates. In addition, the
Fund has engaged in more widely syndicated infrastructure
loans.
Primary market loans are appealing due to their favourable
economics. As the lender, the Fund benefits from upfront lending
fees and increased flexibility in negotiating terms. As the Fund
has grown, its primary market investment activity has expanded and
now accounts for the vast majority (82.9%) of the portfolio.
Secondary market origination
While the primary market remains a focal point, the Fund also
acquires certain investments from banks or other lenders in the
secondary markets. This approach allows for the swift deployment of
capital, as primary market transactions in infrastructure debt can
often be time-consuming to execute. It also provides the Fund with
more liquid assets, offering flexibility when there's a need for
increased liquidity.
Furthermore, secondary market loans come with a performance
history that enables credit analysis based on actual results rather
than financial forecasts. Research indicates that infrastructure
loans typically see improvements in credit quality over time.
Therefore, in many cases, secondary loans have enhanced credit
quality since their initial origination.
Strong pipeline of opportunities
While the Investment Adviser has primarily concentrated on
monitoring existing positions, it also has a diverse array of
appealing potential investments, some of which are currently under
consideration. The conjunction of weak high yield bond and
leveraged loan markets, combined with the prevailing risk aversion
in bank lending, has resulted in borrowers being more receptive to
the enhanced pricing power wielded by alternative debt providers.
This environment allows for more advantageous terms to be
negotiated compared to what is typically available during periods
of abundant bank lending. These favourable conditions translate
into benefits for investors, including higher interest rates, fees,
improved covenants, and enhanced collateral provision.
Our strategy revolves around capitalising on these advantageous
lending conditions while adhering to the late-cycle strategies
previously mentioned. This approach, in the current market climate,
offers higher yields for assets of the same quality compared to the
previous year or similar yields with improved asset quality. In
line with this approach, we are considering a diverse pool of
investments in our pipeline with yields ranging from 8% to 12%.The
Investment Adviser is content with the current yield composition of
the portfolio, and has a predominant focus on enhancing asset
quality. Preference is therefore given to assets with the following
characteristics:
-- Senior debt, as it offers additional security through collateral backing.
-- Defensive sectors, or borrowers with a high degree of
contractual or predictable income, as opposed to businesses
sensitive to economic cycles.
-- Assets that maintain or improve portfolio diversification.
-- Operational projects, as they provide better visibility into
cash flows compared to construction projects.
-- BB-rated or better implied credit quality.
Given this selective approach to new investments, we find
ourselves declining over 90% of the lending opportunities we
encounter. Nonetheless, our portfolio is well-positioned to provide
security in the face of volatile markets ahead, with our ongoing
commitment to prioritising quality, diversity, and cash
generation.
Allocation of capital in today's market
Since the end of the last financial year, several loans have
been sold or redeemed, the proceeds of which the Fund has used to
fully repay drawings on its RCF. We plan to utilise the resulting
strong balance sheet to explore new lending opportunities that
align with the previously mentioned criteria. Additionally, we aim
to continue our share buy-back program, especially in light of the
continuing discount of our share price to NAV.
Sequoia Investment Management Company Limited
Investment Adviser
23 November 2023
Unaudited condensed interim statement of comprehensive
income
For the period from 1 April 2023 to 30 September 2023
Period Period
ended ended
30 September 30 September
2023 2022
(unaudited) (unaudited)
GBP GBP
---------------------------------------------------------------------------------- ------------ -------------
Income
Net gains on non-derivative financial assets at fair value through profit or loss 17,186,265 212,896,981
Net losses on derivative financial assets at fair value through profit or loss (201,704) (187,934,965)
Investment income/(deficit) 35,188,198 (67,620,134)
Net foreign exchange gains/(losses) 4,231,846 (12,011,438)
----------------------------------------------------------------------------------- ------------ -------------
Total income/(deficit) 56,404,605 (54,669,556)
----------------------------------------------------------------------------------- ------------ -------------
Expenses
Investment Adviser's fees 4,763,410 6,176,304
Investment Manager's fees 199,851 183,668
Directors' fees and expenses 177,806 189,726
Administration fees 201,326 212,125
Custodian fees 113,769 129,013
Audit and related non-audit fees 92,757 97,452
Legal and professional fees 756,445 1,304,816
Valuation fees 345,400 397,400
Listing and regulatory fees 67,623 42,067
Other expenses 228,047 191,039
----------------------------------------------------------------------------------- ------------ -------------
Total operating expenses 6,946,434 8,923,610
Loan finance costs 3,784,731 3,806,112
----------------------------------------------------------------------------------- ------------ -------------
Total expenses 10,731,165 12,729,722
----------------------------------------------------------------------------------- ------------ -------------
Profit/(loss) and total comprehensive income/(loss) for the period 45,673,440 (67,399,278)
----------------------------------------------------------------------------------- ------------ -------------
Basic and diluted earnings/(loss) per ordinary share 2.68p (3.82)p
----------------------------------------------------------------------------------- ------------ -------------
All items in the above statement derive from continuing
operations.
Unaudited condensed interim statement of changes in
Shareholders' equity
For the period from 1 April 2023 to 30 September 2023
Retained
Share capital losses Total
For the period from 1 April 2023 to 30 September 2023 (unaudited) GBP GBP GBP
------------------------------------------------------------------ ------------- ------------- -------------
At 1 April 2023 1,808,622,511 (190,769,209) 1,617,853,302
Total comprehensive income for the period - 45,673,440 45,673,440
Share buy-backs (43,270,931) - (43,270,931)
Dividends paid during the period - (58,803,088) (58,803,088)
------------------------------------------------------------------- ------------- ------------- -------------
At 30 September 2023 1,765,351,580 (203,898,857) 1,564,452,723
------------------------------------------------------------------- ------------- ------------- -------------
Share capital Retained Total
For the period from 1 April 2022 to 30 September 2022 (unaudited) losses
GBP GBP GBP
------------------------------------------------------------------ ------------- ------------- -------------
At 1 April 2022 1,837,390,531 (60,347,699) 1,777,042,832
Total comprehensive loss for the period - (67,399,278) (67,399,278)
Share buy-backs (19,552,003) - (19,552,003)
Dividends paid during the period - (55,181,915) (55,181,915)
------------------------------------------------------------------- ------------- ------------- -------------
At 30 September 2022 1,817,838,528 (182,928,892) 1,634,909,636
------------------------------------------------------------------- ------------- ------------- -------------
Unaudited condensed interim statement of financial position
At 30 September 2023
30 September 31 March
2023 2023
(unaudited) (audited)
GBP GBP
---------------------------------------------------------------------- ------------- -------------
Non-current assets
Non-derivative financial assets at fair value through profit or loss 1,656,388,517 1,861,431,678
----------------------------------------------------------------------- ------------- -------------
Current assets
Cash and cash equivalents 22,343,725 7,363,120
Trade and other receivables 1,129,019 1,605,043
Derivative financial assets at fair value through profit or loss 9,637,161 23,254,199
----------------------------------------------------------------------- ------------- -------------
Total current assets 33,109,905 32,222,362
----------------------------------------------------------------------- ------------- -------------
Total assets 1,689,498,422 1,893,654,040
----------------------------------------------------------------------- ------------- -------------
Current liabilities
Trade and other payables 105,112,786 62,951,554
Derivative financial liabilities at fair value through profit or loss 22,932,913 31,060,322
----------------------------------------------------------------------- ------------- -------------
Total current liabilities 128,045,699 94,011,876
----------------------------------------------------------------------- ------------- -------------
Non-current liabilities
Loan payable - 181,788,862
----------------------------------------------------------------------- ------------- -------------
Total liabilities 128,045,699 275,800,738
----------------------------------------------------------------------- ------------- -------------
Net assets 1,561,452,723 1,617,853,302
----------------------------------------------------------------------- ------------- -------------
Equity
Share capital 1,765,351,580 1,808,622,511
Retained losses (203,898,857) (190,769,209)
----------------------------------------------------------------------- ------------- -------------
Total equity 1,561,452,723 1,617,853,302
----------------------------------------------------------------------- ------------- -------------
Number of ordinary shares 1,681,169,626 1,734,819,553
----------------------------------------------------------------------- ------------- -------------
Net asset value per ordinary share 92.88p 93.26p
----------------------------------------------------------------------- ------------- -------------
The Unaudited Condensed Interim Financial Statements were
approved and authorised for issue by the Board of Directors on 23
November 2023 and signed on its behalf by:
Fiona Le Poidevin
Director
Unaudited condensed interim statement of cash flows
For the period from 1 April 2023 to 30 September 2023
Period ended Period ended
30 September 30 September
2023 2022
(unaudited) (unaudited)
GBP GBP
------------------------------------------------------------------------------------- ------------- -------------
Cash flows from operating activities
Profit/(loss) for the period 45,673,440 (67,399,278)
Adjustments for:
Net gains on non-derivative financial assets at fair value through profit or loss (17,186,265) (212,896,981)
Net losses on derivative financial assets at fair value through profit or loss 201,704 187,934,965
Investment (income)/deficit (35,188,198) 67,620,134
Net foreign exchange (gains)/losses (4,231,846) 12,011,438
Loan finance costs 3,784,731 3,806,112
Increase in trade and other receivables (excluding prepaid finance costs and
investment income) (45,731) (1,896,623)
(Decrease)/increase in trade and other payables (excluding accrued finance costs,
investment
income and ordinary share buy-backs) (632,698) 92,721
-------------------------------------------------------------------------------------- ------------- -------------
(7,624,863) (10,727,512)
Cash received on settled forward contracts 22,177,540 12,016,690
Cash paid on settled forward contracts (16,889,615) (84,890,282)
Cash investment income received 78,497,163 55,914,115
Purchases of investments (212,348,197) (227,862,945)
Sales of investments 434,577,623 272,540,771
-------------------------------------------------------------------------------------- ------------- -------------
Net cash inflow from operating activities 298,389,651 16,990,837
-------------------------------------------------------------------------------------- ------------- -------------
Cash flows from financing activities
Proceeds from loan drawdowns - 118,712,919
Loan repayments (179,836,032) (60,000,000)
Payments of loan finance costs (3,090,540) (2,695,376)
Share buy-backs (43,953,088) (19,552,003)
Dividends paid(1) (58,803,088) (55,181,915)
-------------------------------------------------------------------------------------- ------------- -------------
Net cash outflow from financing activities (285,682,748) (18,716,375)
-------------------------------------------------------------------------------------- ------------- -------------
Net increase/(decrease) in cash and cash equivalents 12,706,903 (1,725,538)
Cash and cash equivalents at beginning of period 7,363,120 8,759,040
Effect of foreign exchange rate changes on cash and cash equivalents during the period 2,273,702 887,298
-------------------------------------------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of period 22,343,725 7,920,800
-------------------------------------------------------------------------------------- ------------- -------------
1. Excludes non-cash transactions.
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END
IR UOSAROKUAUUA
(END) Dow Jones Newswires
November 24, 2023 02:01 ET (07:01 GMT)
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