Barings BDC Announces Conference Call to Discuss Fourth Quarter and Full Year 2024 Results

Barings BDC, Inc. (NYSE: BBDC), a publicly traded, externally managed investment company, has announced that it will hold a conference call to discuss its financial results for the fourth quarter and full year of 2024. The call is scheduled for Thursday, November 7, 2024, at 9:00 a.m. ET. Investors and other interested parties can dial 800-715-9871 or 646-307-1963 approximately 10 minutes prior to the start of the call. A taped replay will be available approximately two hours after the conclusion of the call and will remain available until November 14, 2024. To access the replay, please dial 877-660-6853 or 201-612-7415 and enter conference ID 13749495.



The conference call will provide an opportunity for investors to hear from Barings BDC's management team about the company's financial performance for the fourth quarter and full year of 2024. The company's financial results for the third quarter of 2024, which were released on November 6, 2024, showed a net increase in net assets resulting from operations of $22.0 million, or $0.21 per share. The company's net asset value per share as of September 30, 2024 was $11.32, as compared to $11.36 as of June 30, 2024. The decrease in NAV per share from June 30, 2024 to September 30, 2024 was primarily attributed to a net realized loss on investments, foreign currency transactions and forward currency contracts of $0.10 per share, partially offset by net investment income exceeding the company’s third quarter dividend by $0.03 per share, net unrealized appreciation on the company’s investment portfolio, credit support agreements, foreign currency transactions and forward currency contracts of approximately $0.02 per share and the accretive impact of share repurchases of $0.01 per share.



During the three months ended September 30, 2024, the company made 11 new investments totaling $88.4 million and made investments in existing portfolio companies totaling $36.6 million. The company had 11 loans repaid totaling $94.3 million and received $17.6 million of portfolio company principal payments, recognizing a net realized loss on these repayments of $13.2 million. The company received $2.9 million of return of capital from joint ventures, equity and royalty rights investments. Lastly, the company received proceeds related to the sale of equity investments totaling $5.9 million and recognized a net realized gain on such sales totaling $4.3 million.

Barings BDC's portfolio composition has evolved over the past year, with a focus on originating more investments internally. As of the IIQ 2024, Barings had originated 90% of its investments, which is expected to continue to increase. This trend is driven by the BDC's strategy to focus on Barings-originated, senior secured loans to competitively advantaged middle market companies. This shift is likely to continue in the future, as Barings BDC aims to grow its portfolio while maintaining its disciplined investment strategy. Additionally, the BDC has been reducing its non-core positions, providing capital to recycle into attractively structured and priced, first lien, middle market loans. This trend is expected to continue, as the BDC seeks to take advantage of an accelerating deal environment in the second half of the year.



The key drivers of Barings BDC's earnings are net investment income, net realized gains/losses, and net unrealized appreciation/depreciation. In 2023, net investment income was the primary driver of earnings, with a significant increase of 31.98% compared to the previous year. Net realized gains/losses and net unrealized appreciation/depreciation had a lesser impact. In 2024, net investment income continued to be the primary driver, but the impact of net realized gains/losses and net unrealized appreciation/depreciation became more pronounced. For instance, in the first quarter of 2024, net unrealized appreciation contributed significantly to earnings, while in the second quarter, net unrealized depreciation had a more significant impact.

Barings BDC's dividend payout and coverage have been stable over the past year, with the company maintaining a quarterly cash dividend of $0.26 per share. The dividend payout ratio, which is the percentage of earnings paid out as dividends, has been consistent, indicating that the company is distributing a stable portion of its earnings to shareholders. Looking at the financial statements provided, we can see that the company's net investment income has been higher than the dividend paid out in the past year. For example, in the second quarter of 2024, the company reported net investment income of $42.1 million, or $0.40 per share, which was $0.14 per share higher than the dividend paid out. This trend has continued into the third quarter, with net investment income of $30.2 million, or $0.29 per share, which was $0.03 per share higher than the dividend paid out. This consistent dividend payout and coverage indicate that the company is generating sufficient earnings to maintain its dividend and has the potential to grow it in the future. However, it is important to note that the company's dividend payout and coverage can be affected by changes in its earnings, which can be influenced by various factors such as interest rates, the economy, and the performance of its portfolio.



In the future, investors can expect Barings BDC to continue paying a stable dividend, as the company has a history of consistent dividend payouts and has maintained a strong balance sheet. However, it is always important for investors to monitor the company's financial performance and any changes in its dividend payout and coverage, as these can indicate changes in the company's earnings and financial health. As Barings BDC continues to grow its portfolio and maintain its disciplined investment strategy, investors can expect the company to deliver strong financial performance and a stable dividend payout.