FS KKR Capital Corp Reports Solid Annual ROE and Distributes $2.95 Per Share in 2023
Annual Return on Equity: FSK reported a 10% annual return on equity for 2023.
Total Distributions: Shareholders received $2.95 per share in total distributions for 2023.
First Quarter 2024 Distribution: A distribution of $0.75 per share has been declared for Q1 2024.
Portfolio Value: The total fair value of investments stood at $14.649 billion as of December 31, 2023.
Net Increase in Net Assets: FSK saw a net increase in net assets resulting from operations of $696 million for the year ended December 31, 2023.
Net Asset Value: The net asset value per share of common stock at year-end was $24.46.
On February 26th, 2024, FS KKR Capital Corp (NYSE:FSK) released its 8-K filing, announcing its financial and operating results for the fourth quarter and full year ended December 31, 2023. FSK, a leading business development company in the United States, focuses on providing customized credit solutions to private middle market U.S. companies. With a portfolio primarily composed of senior secured loans and second lien secured loans, FSK is dedicated to supporting the financial needs of private upper middle-market companies.
Performance and Challenges
FSK's CEO, Michael C. Forman, highlighted the success of 2023 with an annual return on equity of 10% and total distributions amounting to $2.95 per share. Despite a few portfolio companies facing challenges due to inflationary pressures and a higher interest rate environment, Forman expressed confidence in KKR's experienced workout team to manage these investments effectively. The company's focus on portfolio rotation over the past years has been a key factor in its solid performance.
Financial Highlights
The company's financial achievements, including the 10% annual return on equity and the distribution of $2.95 per share, underscore its ability to generate shareholder value in the asset management industry. These accomplishments are significant as they reflect the company's operational efficiency and strategic investment decisions.
FSK's investment income for the year 2023 was $1.83 billion, with net investment income before taxes at $914 million. The company's operating expenses totaled $916 million, resulting in a net investment income of $892 million after excise taxes. The net increase in net assets from operations was reported at $696 million for the year.
The balance sheet showed total assets of $15.469 billion and total liabilities of $8.620 billion as of December 31, 2023. The net asset value per share of common stock at year-end was $24.46.
"2023 was another successful year for FSK as we generated an annual return on equity of 10% and provided shareholders with $2.95 per share of total distributions," said Michael C. Forman, Chief Executive Officer & Chairman.
Analysis of Company Performance
FSK's performance in 2023 demonstrates resilience and strategic foresight in an environment marked by economic challenges. The company's ability to maintain a strong portfolio and deliver consistent distributions to shareholders is indicative of its robust business model and effective management. Looking ahead to 2024, FSK expects to see an increase in private market transaction activity and anticipates a minimum total distribution of $2.90 per share.
For more detailed information and to view the full financial statements, interested parties can access FSK's annual report on Form 10-K for the year ended December 31, 2023, which was filed with the U.S. Securities and Exchange Commission on February 26, 2024.
FSK's commitment to delivering value to its shareholders and its positive outlook for the coming year positions it as a noteworthy company in the asset management sector. Investors and stakeholders can look forward to the company's continued performance and strategic initiatives in 2024.
Explore the complete 8-K earnings release (here) from FS KKR Capital Corp for further details.
This article first appeared on GuruFocus.
