Digital 9 Infrastructure Reports Pretax Loss and Suspends Dividend

Shares in Digital 9 Infrastructure have taken a hit after the company announced a swing to a pretax loss. The loss was attributed to a decline in the value of its investments and a decision to prioritize liquidity in light of higher interest rates. As a result, the company has chosen not to declare a dividend.

As of 0758 GMT, shares were down 16% at 46.70 pence, representing a decrease of 8.70 pence.

For the first half of the year, ending June 30, the London-listed internet investor reported a pretax loss of £57.4 million ($69.7 million). This marked a significant contrast from the previous year’s profit of £27.4 million.

The company incurred a loss of £81.5 million on its investments compared to a profit of £30 million. This contributed to a decrease in net asset value, which stood at £866 million on June 30, down from £950 million on December 31. The decline was primarily due to adverse foreign exchange movements, dividend payments, and the rising interest rates that resulted in higher borrowing costs.

In response to these challenges, Digital 9 has announced the withdrawal of its target dividend of 6.0 pence per share for 2023. The company plans to engage in a formal consultation with shareholders to discuss its future dividend policy.