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TORONTO, March 28, 2025 (GLOBE NEWSWIRE) -- Helios Fairfax Partners Corporation (TSX: HFPC.U) today announced its financial results for the year ended December 31, 2024. All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are derived from the consolidated financial statements prepared using the recognition and measurement requirements of International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"), except as otherwise noted.
Management Commentary
"In 2024, we further advanced our strategy by deploying $55 million across high-growth sectors and divesting a key Legacy Non-Core asset for $16.3 million," said Tope Lawani and Babatunde Soyoye, Co-CEOs of Helios Fairfax Partners. "Our investments contributed to the advancement of a number of new and exciting businesses including PFL Africa, a new regional league of the rapidly-growing Professional Fighters League; SeamlessHR, a Cloud-based HR and payroll platform digitizing employee lifecycle management; M2P Solutions, a rapidly expanding provider of infrastructure API and Banking-as-a-Service technology; and Moment, which offers integrated payments and other financial services to businesses and consumers. In the four years since the start of HFP's relationship with Helios, the Helios Managed Investments have achieved an IRR of 14%. We remain committed to investment strategies that will enhance shareholder value while delivering on our mission to generate competitive returns through profitable, value-creating, and socially responsible businesses across Africa."
Highlights During the Fourth Quarter of 2024
- Book value per share for the fourth quarter of 2024 was $3.84, compared to $4.23 in the third quarter of 2024.
- HFP reported a net loss of $41.6 million for the fourth quarter of 2024, compared to net earnings of $4.0 million in the third quarter of 2024.
- The decrease in book value per share compared to the third quarter of 2024 and the net loss in the fourth quarter were due to unrealized losses from the company's investment in TopCo LP. These losses were offset by unrealized gains related to the Helios Managed Investments as well as interest and dividend income. Also contributing to the decrease in book value per share and net loss for the quarter was a loss on the forgiveness of the GP and management company loans and other expenses.
- HFP deployed $5.1 million under the loan facility with Digital Ventures during the quarter.
- HFP disposed of $16.3 million of Legacy Non-Core investments during the quarter, comprising $2.4 million for the sale of Indirect equity interest in AGH, $4.4 million for the sale of the AGH Loan, and $9.5 million for the sale of the Philafrica Facility.
Financial Position and Results of Operations
HFP reported a net loss of $41.6 million in the fourth quarter of 2024 as compared to a net loss of $80.9 million in the comparable period of 2023. The net loss includes $30.6 million of net losses on its investment in TopCo LP, partially offset by $12.8 million of net gains on its investment in Helios Managed Investments, and a $22.0 million loss on the forgiveness of the GP and management company loans and other expenses.
The company reported a net loss of $58.8 million for the year ended December 31, 2024 compared to a net loss of $71.7 million for the year ended December 31, 2023. The net losses in 2024 and 2023 were driven primarily by unrealized losses on the company's investment in TopCo.
These unrealized losses were driven primarily by a decrease in carried interest expected to be received from TopCo Class A and by lower management fees for the Helios Strategies, which reduced the excess management fees to TopCo Class B. The unrealized losses were offset by unrealized gains related to Helios Managed Investments, due to the strong performance of the underlying investments in Helios Fund IV and Helios Sports and Entertainment Group.
Also included in the net loss are expenses of $40.6 million, partially offset by interest income and dividends of $9.2 million. The increase in expenses compared to expenses incurred in 2023 primarily reflects the company's business decision to forgive loans extended to the entities acting as general partners and management companies of certain new Helios strategies and certain Helios expenses absorbed by TopCo LP Class B in excess of the management fees received, which represents a realized loss to the company.
The decrease in book value per share to $3.84 as of December 31, 2024, as compared to $4.39 as of December 31, 2023 was primarily from the unrealized losses on the company's investment in TopCo LP.
Included in book value per share is $38.3 million of cash and cash equivalents as at December 31, 2024. At December 31, 2024, HFP had 108,179,127 common shares outstanding, as compared to 108,169,817 common shares outstanding at December 31, 2023.
HFP's detailed fourth quarter report can be accessed at its website www.heliosinvestment.com/helios-fairfax-partners.
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: geopolitical risks; inflation and fluctuating interest rates; tariffs; 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 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; cybersecurity and technology; reliance on third parties; 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 ("Fairfax") and HFP Investments Holdings SARL ("Principal Holdco") may adversely affect the market price of the subordinate voting shares; emerging markets; South African black economic empowerment; South Africa's grey-listing; 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 28, 2025 which is available on SEDAR+ at www.sedarplus.ca and on the company's website at www.heliosinvestment.com/helios-fairfax-partners. 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.
Information on
CONSOLIDATED BALANCE SHEETS
as at December 31, 2024 and December 31, 2023
(US$ thousands)
| December 31, 2024 | December 31, 2023 | |||
| Assets | ||||
| Cash and cash equivalents | 38,320 | 95,913 | ||
| Portfolio Investments | 394,949 | 386,002 | ||
| Total cash and investments | 433,269 | 481,915 | ||
| Interest receivable | 762 | 412 | ||
| Income taxes refundable | 437 | 2,874 | ||
| Other receivables from related parties | 126 | 991 | ||
| Other assets | 1,347 | 1,167 | ||
| Property and equipment | 1,176 | 974 | ||
| Total assets | 437,117 | 488,333 | ||
| Liabilities | ||||
| Accounts payable and accrued liabilities | 6,594 | 1,601 | ||
| Payable to related parties | 846 | 1,096 | ||
| Lease liability | 471 | 548 | ||
| Deferred income taxes | 13,265 | 10,492 | ||
| Total liabilities | 21,176 | 13,737 | ||
| Equity | ||||
| Common shareholders' equity | 415,941 | 474,596 | ||
| 437,117 | 488,333 | |||
| Book value per basic share | 3.84 | 4.39 | ||
Information on
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
for the three and twelve months ended December 31, 2024 and 2023
(US$ thousands except per share)
| (Unaudited) | |||||||||||||||
| Fourth quarter | Year ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Income | |||||||||||||||
| Interest and dividends | 1,964 | 2,303 | 9,245 | 12,036 | |||||||||||
| Net losses on investments | (18,169 | ) | (68,728 | ) | (29,164 | ) | (53,143 | ) | |||||||
| Net foreign exchange gains (losses) | (1,733 | ) | 816 | (305 | ) | (4,816 | ) | ||||||||
| (17,938 | ) | (65,609 | ) | (20,224 | ) | (45,923 | ) | ||||||||
| Expenses | |||||||||||||||
| Investment and advisory fees | 729 | 1,104 | 4,055 | 3,492 | |||||||||||
| Loss on loan forgiveness and other expenses | 21,979 | - | 21,979 | - | |||||||||||
| Loss on uncollectible accounts receivable | 441 | - | 441 | - | |||||||||||
| General and administration expenses | 4,013 | 3,522 | 10,585 | 12,153 | |||||||||||
| Transaction costs | - | - | 1,725 | - | |||||||||||
| Interest expense | 463 | 668 | 1,799 | 3,372 | |||||||||||
| 27,625 | 5,294 | 40,584 | 19,017 | ||||||||||||
| Earnings (loss) before income taxes | (45,563 | ) | (70,903 | ) | (60,808 | ) | (64,940 | ) | |||||||
| Provision for (recovery of) income taxes | (3,949 | ) | 9,996 | (2,018 | ) | 6,747 | |||||||||
| Net earnings (loss) and comprehensive income (loss) | (41,614 | ) | (80,899 | ) | (58,790 | ) | (71,687 | ) | |||||||
| Net earnings (loss) per share | $ | (0.38 | ) | $ | (0.75 | ) | $ | (0.54 | ) | $ | (0.66 | ) | |||
| Shares outstanding (weighted average) | 108,179,127 | 108,216,246 | 108,152,501 | 108,258,852 | |||||||||||
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 Accounting Standards 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.
Internal rate of return - The company uses this measure to assess the performance of its investments. This measure represents the annualized rate of return calculated for the company's portfolio investments, taking into account (i) the timing of cash flows (including cash consideration of purchases, cash proceeds on sales, cumulative interest and dividends received, and return of capital distributions) over the period of the company's investment, and (ii) the fair value at the end of the reporting period for existing investments.
