Helios Fairfax Partners Reports First Quarter Financial Results

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TORONTO, May 10, 2023 (GLOBE NEWSWIRE) -- Helios Fairfax Partners Corporation (TSX: HFPC.U) today announced its financial results for the three months ended March 31, 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 International Financial Reporting Standards, except as otherwise noted.

Management Commentary

"The HFP team made significant progress monetizing Legacy Non-Core Investments in the first quarter of 2023, realizing of $28 million in proceeds from two Legacy Non-Core Investments. As of March 31, 2023, HFP had approximately $118 million in Insured and Guaranteed and Other Legacy Non-Core Investments and we remain extremely focused on seeking liquidity for this portfolio in order to redeploy cash into Helios Funds and to seed new investment strategies. With $149 million in cash available at the end of the quarter, the company continues to be well positioned to originate high quality investment opportunities and harness the wealth of investment opportunity in Africa."

Highlights During and Subsequent to the First Quarter of 2023

• Received $28.2 million in proceeds from the exits of the CIG Loan and the AFGRI International Facility as HFP continues the orderly divestment of Other Legacy Non-Core Investments. Other Legacy Non-Core Investments were $25.9 million as at March 31, 2023 as compared to $55.4 million as at December 31, 2022.
• Funded a capital contribution of $1.4 million for Helios Fund IV to make a follow-on investment in a reinsurance company.
• Received $0.4 million in distributions representing carried interest from TopCo LP.
• The company transferred 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 Ltd. ("Seven Rivers") in exchange for a 93.7% equity interest in Seven Rivers; Seven Rivers is a strategy developed to apply hedge fund style investment processes to investments made in African public securities markets.

Highlights Since the Strategic Transaction

• Increase of 39.9% in the fair value of Helios Fund IV based on the strong performance of the Fund's underlying investee companies
• Increase of 31% in the fair value of NBA Africa driven by strong projected revenue growth
• Increase of 14% in the fair value of Trone driven by performance of the underlying operating companies
• Received $9.8 million in returns of capital from investment in Helios Fund IV
• Received $97.3 million in proceeds from the exits of Atlas Mara Bonds, Atlas Mara Facility, Atlas Mara Facility Guarantee, CIG Loan and AFGRI International Facility, including amounts received in the first quarter of 2023
  

Financial Position and Results of Operations

HFP reported earnings before tax of $6.5 million in the first quarter of 2023, as compared to a loss before tax of $2.8 million in the comparable period of 2022. Results from operations include $8.5 million of net unrealized gains on its investment portfolio. The unrealized gains are principally attributable to gains on our investment in an alternative asset manager, TopCo LP. Also included in earnings before tax is interest revenue of $2.7 million, as compared to $0.7 million in the prior year.

HFP reported a book value per share of $5.09 as of March 31, 2023, as compared to $5.03 in the prior quarter. The change in book value per share is primarily attributable to $2.2 million in unrealized gains in the Helios Managed Investments and $6.9 million in other unrealized fair value increases which are principally attributable to gains on our investment in an alternative asset manager, TopCo LP.

Included in book value per share is $149.1 million of cash and cash equivalents as at March 31, 2023, which is available to fund future investments. The company's cash balance includes $28.2 million in repayments of Other Legacy Non-Core Investments that were received during the quarter. At March 31, 2023, HFP had 108,313,207 common shares outstanding, as compared to 108,193,971 common shares outstanding at December 31, 2022.

The implementation of the remediation plan developed to address the material weakness identified in the company's internal control over financial reporting framework for the year ended December 31, 2021 has been completed. Please refer to the company's consolidated financial statements and Management Discussion and Analysis for further information.

HFP's detailed first quarter report can be accessed at its website www.heliosfairfax.com.

Annual and Special Meeting of Shareholders

The Annual and Special Meeting of shareholders of Helios Fairfax Partners Corporation ("HFP" or the "Company") will be held on Thursday, May 11 at 2:00 p.m. ET as a hybrid meeting with a physical location at Lumi, 200 Bay Street, North Tower, Suite 1600, Toronto, Ontario, Canada and the option to participate virtually, via live webcast at web.lumiagm.com/468254283.

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
[email protected]
(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.