Rise in NII
Prospect Capital (PSEC) generated NII (net investment income) per share of $0.20 in its fiscal 2Q18, which ended on December 31, 2017. However, during the same period, it generated NII amounting to $73.2 million.
The company’s NII per share in fiscal 2Q18 rose $0.02 compared to fiscal 1Q18 mainly due to a fall in administrative overhead costs. Some of the company’s loans are now in the income accrual category, which also contributed to the rise in its NII per share.
Prospect’s fiscal 2Q18 represented the third consecutive quarter in which its repayments exceeded its originations.
Total investment income
Prospect capital generated total investment income of $162.4 million in fiscal 2Q18, reflecting a substantial fall from its fiscal 2Q17 results. Its total investment income was $183.4 million in fiscal 2Q17. Of the three components of the company’s total investment income, its total interest and its dividend income witnessed year-over-year falls in fiscal 2Q18.
Prospect Capital witnessed a fall in its distributions from $81.6 million in fiscal 1Q18 to $64.9 million in fiscal 2Q18, representing a substantial decline. This fall could create a negative picture in the eyes of the market participants. However, the company witnessed a substantial rise in its net asset value per share from $9.12 in fiscal 1Q18 to $9.28 in fiscal 2Q18.
On February 8, 2018, Prospect’s market cap stood at $2.2 billion. Its peers (XLF) FS Investment (FSIC), BlackRock Capital Investment (BKCC), and Apollo Investment (AINV) had market caps of $1.8 billion, $0.42 billion, and $1.2 billion, respectively.