Goldman Sachs BDC Inc (GSBD) Reports Mixed Q4 Results; Declares $0.45 Dividend
Net Asset Value (NAV): Slight increase to $14.62 per share as of December 31, 2023, from $14.61 per share on September 30, 2023.
Total Investment Income: Decreased to $115.4 million in Q4 from $120.1 million in the previous quarter.
Net Investment Income: After-tax figure fell to $61.8 million in Q4, down from $72.9 million in Q3.
Adjusted Net Investment Income: Dropped to $60.7 million after adjustments, compared to $69.7 million in the prior quarter.
Net Realized and Unrealized Gains (Losses): Losses narrowed to $(10.1) million in Q4 from $(18.1) million in Q3.
Quarterly Dividend: Maintained at $0.45 per share, consistent with the previous quarter.
Leverage Ratio: Ending net debt to equity leverage ratio improved slightly to 1.11x from 1.13x.
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On February 28, 2024, Goldman Sachs BDC Inc (NYSE:GSBD) released its financial results for the fourth quarter and full year ended December 31, 2023, along with its 8-K filing. GSBD, a non-diversified, closed-end management investment company, focuses on lending to middle-market companies to generate current income and, to a lesser extent, capital appreciation. The company primarily invests in secured and unsecured debt and is managed by Goldman Sachs Asset Management, L.P.
Financial Performance and Portfolio Activity
GSBD's investment portfolio saw a slight decrease in fair value, down to $3,414.3 million from $3,438.7 million in the previous quarter. Total debt outstanding also decreased to $1,832.2 million from $1,884.5 million. Despite a marginal increase in net assets, the company's net asset value per share remained relatively stable at $14.62.
The company's total investment income for Q4 decreased to $115.4 million, primarily due to lower repayments and accretion of discounted positions. Net investment income after taxes also saw a decrease, falling to $61.8 million from $72.9 million in the previous quarter. Adjusted net investment income after taxes, which excludes purchase discount amortization, was $60.7 million, down from $69.7 million in Q3.
GSBD's net realized and unrealized losses improved, with adjusted net losses of $(10.1) million compared to $(18.1) million in the third quarter. The company's investment activity during the quarter included $166.2 million in new investment commitments across fourteen new and four existing portfolio companies, while sales and repayments totaled $224.0 million, driven by full repayments and exits from seven portfolio companies.
Liquidity, Capital Resources, and Portfolio Health
As of December 31, 2023, GSBD had $1,832.2 million in total debt outstanding with a combined weighted average interest rate of 5.45% for the quarter. The company's liquidity position included $724.1 million of availability under its Revolving Credit Facility and $52.4 million in cash. The ending net debt to equity leverage ratio improved slightly to 1.11x.
The health of GSBD's investment portfolio is reflected in the 99.9% of performing debt bearing a floating rate and a weighted average yield on debt and income-producing investments at fair value of 13.8%. However, investments on non-accrual status represented 2.3% of the total investment portfolio at fair value, indicating some areas of concern.
Outlook and Conference Call
GSBD will host an earnings conference call to discuss the quarterly results and provide further insights into the company's performance and strategies. Investors and interested parties are encouraged to participate or access the archived replay on the company's website.
Goldman Sachs BDC Inc's latest earnings report presents a mixed picture, with stable net asset value and maintained dividends but decreased investment income and net investment income. The slight improvement in the leverage ratio and the narrowing of net losses are positive signs, but the decrease in total investment income and the presence of non-accrual investments highlight ongoing challenges. Value investors may find GSBD's steady dividend and efforts to manage its debt profile appealing, while keeping an eye on the company's ability to navigate the complexities of middle-market lending.
For a more detailed analysis of GSBD's financial results, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Goldman Sachs BDC Inc for further details.
This article first appeared on GuruFocus.
