NIF income grows, portfolio value slips in 2024

THE NATIONAL Investment Fund Holding Company (NIF) closed 2024 with higher income but a weaker portfolio valuation, as it contended with continued market volatility and falling share prices across key holdings on the local stock exchange.

In its annual report for the year ended December 31, 2024, NIF reported a 72 per cent rise in net income to $145.2 million, driven by an $87.7 million or 27 per cent increase in dividend income, alongside higher interest earnings.

Total dividend income climbed from $324.1 million in 2023 to $411.8 million, bolstered by improved payouts from its investee companies.

Republic Financial Holdings, the largest component of NIF’s portfolio, paid total dividends of $5.70 per share in 2024, a 9.6 per cent increase from $5.20 in the previous year.

Trinidad Generation Unlimited (TGU) raised its dividend from $0.36 to $0.49 per share, while Angostura Holdings declared $0.38 per share, up 8.5 per cent.

West Indian Tobacco paid $0.87 per share, improving from $0.78, and One Caribbean Media distributed $0.21 per share, a marginal increase over the $0.20 paid in 2023.

Despite these gains, the overall value of NIF’s investment portfolio declined to $7.7 billion, down 11 per cent from $8.66 billion a year earlier.

The downturn reflected the broader slide in equity values on the TT Stock Exchange, where the composite index fell by 13 per cent and the all T&T Index by 14 per cent over the same period.

The fair value of the NIF1 investment portfolio dropped from $7.85 billion at the end of 2023 to $6.95 billion at December 31.

The decline was attributed to share price depreciation in Angostura, Republic Financial Holdings, West Indian Tobacco and One Caribbean Media.

Even so, the company maintained an asset-to-debt coverage ratio of 1.8:1, regarded by management as a healthy buffer for bondholders.

Chairperson Jennifer Lutchman, in her annual statement, acknowledged the mixed outcome.

"The NIF1, a well-balanced portfolio, has been experiencing steady dividends which when combined with NIF2 amounted to $411.8 million in 2024, an increase of $87.7 million or 27 per cent from the $324.1 million earned in the prior year," she said.

The launch of the NIF2 bond in January 2024 marked a significant milestone for the company.

The $400 million bond, backed by 6.5 million Republic Financial Holdings shares, was aimed at individual and small business investors and was oversubscribed by 267 per cent.

It was listed on the stock exchange in March 2024, with cumulative trading volumes of $2.6 million by year-end.

NIF2’s investment portfolio, valued at $803.4 million at its launch, declined to $741.7 million by December 31, 2024, mirroring the fall in Republic Financial Holdings’ share price.

Nevertheless, NIF reported a coverage ratio of 1.85: 1 for NIF2, with all coupon payments made on schedule.

Dividend income from NIF2 totalled $37.3 million for the year, based solely on its holding in Republic Financial Holdings.

Combined with interest income of $11.3 million, total group income for NIF reached $426.8 million, up from $333.5 million in 2023.

Operating expenses rose 12 per cent to $6.1 million, driven mainly by consultancy fees for the independent valuation of TGU, audit-related costs, recruitment services and higher investment management and custodian fees.

Finance costs increased by six per cent to $275.5 million, reflecting a full year of the higher 7.1 per cent coupon rate on the Series D bond issued in July 2023, which replaced the 4.5 per cent Series A bond.

A notable development during the year was the updated valuation of Trinidad Generation Unlimited, NIF’s wholly owned subsidiary and the country’s largest electricity supplier.

External consultants valued TGU at between $1.4 billion and $2.2 billion depending on whether its power purchase agreement is extended beyond 2041.

NIF, however, chose to retain its 2023 internal valuation of $1.1 billion until the benefits of TGU’s ongoing capital enhancement programme can be fully assessed.

As of December 31, 2024, NIF’s cash balance, including sinking fund investments, rose to $611 million, up 34 per cent from the prior year.

The company confirmed all coupon payments due in 2024 were met on time and reaffirmed its next scheduled payments for August 9 for Series B, C and NIF2 bonds and July 26 for Series D.