Helios Fairfax Partners Reports Second Quarter Financial Results
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
TORONTO, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Helios Fairfax Partners Corporation (TSX: HFPC.U) today announced its financial results for the six months ended June 30, 2023. All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are derived from the interim consolidated financial statements prepared using the recognition and measurement requirements of International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"), except as otherwise noted.
Management Commentary
“In Q2 we advanced our strategy of seeding investments by making notable investments in two new strategies, Helios Seven Rivers Fund and Helios Sports & Entertainment Group, which are expected to contribute to driving excess management fee income and carried interest proceeds,” said Tope Lawani and Babatunde Soyoye, Co-CEO’s of Helios Fairfax Partners. “We also made capital contributions for follow-on investments which will be deployed in the rapidly growing data center sector. Finally, we remain focused on the full and timely exit of our legacy non-core assets in an orderly manner. With $118 million in cash available at the end of Q2, we will continue to deploy our capital in investments that align with the long-term secular trends of demographics & urbanization and technology & innovation which will drive Africa’s economy for years to come.”
Highlights During and Subsequent to the Second Quarter of 2023
Book value per share for the second quarter of 2023 grew $0.04 or 0.8% quarter-over-quarter.
Book value per share for the six months ended June 30, 2023 grew $0.10 or 2.0%.
The company had earnings of $7.0 million in the first quarter of 2023, which grew to $11.0 million in the second quarter of 2023, an increase of 57% during the second quarter.
The company contributed its investment in Other Common Shares and cash of $14.1 million, for a total investment of $30.0 million, to Helios Seven Rivers Fund in exchange for a 93.7% equity interest in Helios Seven Rivers Fund, a strategy developed to apply hedge fund style investment processes to investments made in African public securities markets.
The company invested $6.0 million in Helios Sports & Entertainment Group, a strategy developed to invest in companies, businesses, and opportunities in the African sports and entertainment sector.
The company funded capital contributions of $1.1 million for TopCo LP and $7.2 million for Helios Fund IV to make follow-on investments in IXAfrica, a private company developing and operating hyperscale-ready data centers in Kenya.
The company entered into a Sale and Purchase Agreement whereby it agreed to sell a portion of its investment in its Indirect equity interest in AGH, its equity interest in Philafrica, and the Philafrica facility, all of which are Legacy Investments, subject to certain conditions.
Financial Position and Results of Operations
HFP reported net earnings of $4.0 million in the second quarter of 2023, as compared to a net loss of $36.4 million in the comparable period of 2022. Results from operations include $4.3 million of net gains on its investment portfolio. The gains are principally attributable to unrealized gains on our investment in an alternative asset manager, TopCo LP and realized gains on the sale of Other Common Shares.
HFP reported a book value per share of $5.13 as of June 30, 2023, as compared to $5.09 in the prior quarter. The change in book value per share is primarily attributable to $4.3 million in net gains on investments and $3.5 million in interest income.
Included in book value per share is $118.7 million of cash and cash equivalents as at June 30, 2023, which is available to fund future investments. At June 30, 2023, HFP had 108,329,708 common shares outstanding, as compared to 108,193,971 common shares outstanding at December 31, 2022.
HFP's detailed second quarter report can be accessed at its website www.heliosfairfax.com.
About Helios Fairfax Partners Corporation
Helios Fairfax Partners Corporation is an investment holding company whose investment objective is to achieve long term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in Africa and African businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, Africa.
Contact Information
Neil Weber
LodeRock Advisors
neil.weber@loderockadvisors.com
(647) 222-0574
This press release may contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements may relate to the company's or a Portfolio Investment's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividends, plans and objectives of the company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities of the company, a Portfolio Investment, or the African market are forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved".
Forward-looking statements are based on our opinions and estimates as of the date of this press release and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the following factors that are described in greater detail elsewhere in the company’s annual report: the conflict in Ukraine; financial market fluctuations; pace of completing investments; minority investments; reliance on key personnel and risks associated with the Investment Advisory Agreement; concentration risk in Portfolio Investments, including with geographic concentration and with respect to Class A and Class B limited partnership interests in the Portfolio Advisor; operating and financial risks of Portfolio Investments; valuation methodologies involve subjective judgments; lawsuits; use of leverage; foreign currency fluctuation; investments may be made in foreign private businesses where information is unreliable or unavailable; significant ownership by Fairfax Financial Holdings Limited and HFP Investments Holdings SARL may adversely affect the market price of the subordinate voting shares; emerging markets; South African black economic empowerment; economic risk; climate change, natural disaster and weather risks; taxation risks; MLI; and trading price of subordinate voting shares relative to book value per share. Additional risks and uncertainties are described in the company’s annual information form dated March 22, 2023 which is available on SEDAR at www.sedar.com and on the company’s website at www.heliosfairfax.com. These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the company. These factors and assumptions, however, should be considered carefully.
Although the company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The company does not undertake to update any forward-looking statements contained herein, except as required by applicable securities laws.
GLOSSARY OF NON-GAAP AND OTHER FINANCIAL MEASURES
Management analyzes and assesses the financial position of the consolidated company in various ways. The measure included in this news release, which has been used consistently and disclosed regularly in the company's Annual Reports and interim financial reporting, does not have a prescribed meaning under IFRS and may not be comparable to similar measures presented by other companies. This measure is described below.
Book value per share - The company considers book value per share a key performance measure in evaluating its objective of long-term capital appreciation, while preserving capital. Book value per share is a key performance measure of the company and is closely monitored. This measure is calculated by the company as common shareholders' equity divided by the number of common shares outstanding.
