FS KKR Capital Corp. Reports Q2 2025 Financial Results and Distributions

FS KKR Capital Corp. Celebrates Financial Results for Q2 2025

FS KKR Capital Corp. (NYSE: FSK) has recently disclosed its financial performance and operational highlights for the quarter ending on June 30, 2025. The announcement, made on August 6, 2025, outlines a number of essential metrics that reveal the company's current standing in the investment sector.

Key Financial Highlights

In the recently concluded quarter, FSK reported a net investment income of $0.62 per share, a slight decrease from $0.67 in the previous quarter. This decline is somewhat mirrored in the adjusted net investment income, which fell from $0.65 to $0.60 per share. The net asset value (NAV) also saw a downturn, closing at $21.93, down from $23.37 previously.

The total net realized and unrealized loss jumped from $0.24 per share to $1.36, indicating challenging conditions. The earnings (or losses) per share depicted a deterioration, landing at $(0.75) versus last quarter's earnings of $0.43. This noteworthy shift reflected the effects of specific issues impacting four of FSK’s portfolio companies, which have been elaborated upon in earlier earnings calls.

In terms of transactions, FSK reported total purchases of $1.4 billion while sales and repayments hit $1.65 billion. The significant sales were attributed to FSK's joint venture, Credit Opportunities Partners JV, LLC. Furthermore, the net debt to equity ratio slightly increased to 120% as of June 30, 2025, marking a rise from 114% on March 31, 2025.

Distribution Details

On a positive note, the board of directors has declared a third-quarter 2025 distribution of $0.70 per share. This figure consists of a base distribution of $0.64 and a supplemental distribution of $0.06, scheduled for payment on or about October 2, 2025, for those shareholders recorded prior to the close of business on September 17, 2025. This consistent payout reflects FSK's commitment to returning capital to its investors amidst fluctuating market conditions.

Portfolio Overview

As of June 30, 2025, the total fair value of FSK's investments stood at $13.6 billion, with a significant 64.1% invested in senior secured securities. The weighted average annual yield on accruing debt investments decreased to 10.8% from 11.0% in the previous quarter.

When looking at risk, exposure to the top ten largest portfolio companies has slightly decreased, now representing 19% of the total portfolio compared to 20% before. Investments on non-accrual status accounted for 3.0% of the fair value, highlighting the challenges facing certain segments of the investment portfolio.

Future Projection

Commenting on the quarterly outcomes, Michael C. Forman, Chief Executive Officer and Chairman of FSK, stated, "During the second quarter FSK generated $0.60 per share of Adjusted Net Investment Income. Our operating results and corresponding net asset value were impacted by company-specific issues affecting four portfolio companies, each of which have been discussed on prior earnings calls." Forman also remarked on the company's focus on growth, mentioning that around $1.4 billion in new investments originated in the reported quarter, mostly within first lien structures.

Concluding Remarks

FS KKR Capital Corp. continues to navigate a complex financial landscape while ensuring the effective management of its investment portfolio. The company remains committed to its strategies, even though external factors have posed certain challenges in the short term. Moving forward, stakeholders and potential investors will be keenly observing how FSK adapts to these conditions while sustaining value for its shareholders.

For more detailed financial information, FSK will host a conference call on August 7, 2025, at 9:00 a.m. ET. Interested parties can access the webcast through the Investor Relations section of FSK's website.

For ongoing updates, visit FS KKR Advisor.