-
Net Investment Income (NII): Increased to $7.8 million, or $0.13 per share in Q4 2023, from $6.4 million, or $0.11 per share in Q3 2023.
-
Net Asset Value (NAV): Reduced to $2.55 per share on December 31, 2023 from $2.78 per share on December 31, 2022.
-
Allocations: Declared monthly distributions of $0.035 per share for April, May and June 2024.
-
Total investment income: Achieved $51.8 million for the year ended December 31, 2023.
-
Net increase in net assets: The result of operations was $17.2 million for the year ended December 31, 2023.
-
Market Value Total Return: Reported at 9.34% for the year ended December 31, 2023.
-
Net Asset Value Total Return: Reported at 11.51% for the year ended December 31, 2023.
Oxford Square Capital Corp (NASDAQ:OXSQ) published its 8-K filing on March 15, 2024, detailing its financial results for the quarter ended December 31, 2023, and its distributions for the following months. As a closed-end, non-diversified management investment company, OXSQ focuses on investing in corporate debt securities and structured finance investments with collateralized loans (CLOs). Company capital is typically used by corporate borrowers to support growth initiatives, acquisitions, recapitalizations and working capital in a variety of industries.
Financial results and challenges
OXSQ’s net investment income increased significantly in the fourth quarter of 2023, reaching approximately $7.8 million, or $0.13 per share, compared to $6.4 million, or $0.11 per share, in the prior quarter. This performance is significant because it reflects the company’s ability to generate income from its investment portfolio, which is critical to sustaining distributions to shareholders and for reinvestment. However, the company’s net asset value per common share fell from $2.78 at the end of 2022 to $2.55 at the end of 2023, indicating potential challenges in maintaining the value of its investments.
Financial Achievement and Meaning
The company’s total investment income for the year ended December 31, 2023 was $51.8 million, which is a critical metric for OXSQ as it demonstrates the company’s effectiveness in generating income from its investment strategies. The net increase in net assets from operations was $17.2 million for the year, which is a significant indicator of the company’s overall financial health and its ability to enhance shareholder value.
Key financial indicators
From the income statement, a year-over-year comparison shows that total investment income has increased, which is a positive sign for the company’s revenue generation capabilities. The balance sheet reflects a decrease in total assets from $327.9 million in 2022 to $277.7 million in 2023, with a corresponding decrease in net assets from $138.7 million to $151.3 million. Details of the statement of cash flows were not provided, but changes in net assets are indicative of the company’s operating results and financial transactions during the year.
Analysis of the company’s activity
Financial highlights show that OXSQ has been able to maintain a steady stream of revenue, which has translated into consistent distributions to shareholders. Total return based on market value and net asset value suggests that the company has achieved a positive return despite the decline in net asset value per share. The company’s ability to navigate the complexity of the investment landscape, particularly in corporate debt and CLOs, is reflected in these returns.
For value investors, the metrics provided in the earnings report offer a mixed view. An increase in net investment income is promising, but a decrease in net asset value per share could raise concerns about asset valuations and potential market volatility. However, declared distributions may appeal to those looking for regular income from their investments.
Overall, Oxford Square Capital Corp’s latest earnings report presents a company that has successfully generated revenue and delivered shareholder returns in a challenging market environment. Detailed financial results and upcoming distributions are likely to be of interest to current and potential investors seeking information about the company’s performance and strategic direction.
For further details and analysis, investors are encouraged to review the full earnings report and consider the implications for their investment strategies.
Contact information is available for investor inquiries, with Bruce Rubin available at 203-983-5280 for any additional questions regarding Oxford Square Capital Corp.’s financial results.
View the full 8-K earnings release (here) from Oxford Square Capital Corp for additional details.
This article first appeared on GuruFocus.
