An anonymous director reports

FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2023

Helios Fairfax Partners Corp. has released its financial results for the year ended Dec. 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 annual consolidated financial statements prepared using the recognition and measurement requirements of international financial reporting standards (IFRS) as issued by the International Accounting Standards Board, except as otherwise noted.

Management commentary

"Two thousand twenty-three was a pivotal year for Helios Fairfax Partners, as we successfully exited the majority of our legacy non-core assets, generating $62.7-million of liquidity that we will deploy in investments that benefit from the long-term secular trends of demographics and urbanization and technology and innovation that are driving growth in African economies. In furtherance of that strategy, in the fourth quarter, we funded additional investments in Digital Ventures and Helios Sports and Entertainment Group. While challenging market conditions have temporarily moderated the pace of fundraising for private equity funds globally, we remain extremely optimistic about the wealth of innovative and value-creating opportunities that will drive Africa's economy and contribute to long-term capital appreciation for HFP through growing cash flow streams from excess management fees and carried interest."

Highlights during the fourth quarter of 2023

• Book value per share for the quarter was $4.39, compared with $5.11 in the third quarter of 2023 and $5.03 in the fourth quarter of 2022. Net loss for the quarter was $80.9-million, compared with a net loss of $1.8-million in the third quarter of 2023 and net earnings of $17.5-million in the fourth quarter of 2022. The decrease in book value compared with that of the third quarter and the net loss in the fourth quarter were due to unrealized losses from the company's investment in TopCo LP, which was driven by lower cash flow expectations. These unrealized losses were offset by unrealized gains related to the Helios managed investments, which increased by 7.9 per cent, as well as interest and dividend income;
• Deployed $5.1-million of capital in Digital Ventures and $26.1-million in Helios Sports and Entertainment Group, composed of $5-million of cash and the transfer of the Event Horizon loan of $21.1-million;
• Received full repayment of the Fairfax loan, generating $20-million of liquidity to finance new investment strategies;
• Redeemed the Helios 3.0 per cent debentures ahead of its maturity date, which reduced borrowings by $100-million.

Financial position and results of operations

Helios reported a net loss of $80.9-million in the fourth quarter of 2023, as compared with net earnings of $17.5-million in the comparable period of 2022. The net loss was driven primarily by unrealized losses on the company's investment in TopCo. The unrealized losses related to excess management fees were driven by the impact of lower forecasted management fees for the Helios funds, which reduces the excess management fees to TopCo Class B. The lower forecasted fees were driven by the adverse effect of the rising interest rate environment, which impacts financing for private equity funds globally. Also contributing to the loss in the fourth quarter were unrealized losses related to carried interest expected to be received from TopCo Class A. These losses were driven by a combination of reduced expectations of the value that is to be realized from various investments (in particular those in the financial services sector) and expected delays in the timing of certain exits for investments in the telecom and electronic payments sectors. The valuation of TopCo Class A is particularly sensitive to the expected value and timing of exits when the overall fund returns are projected to be close to the 8-per-cent preferred investor return, as is the case for two of the Helios funds. Results for the fourth quarter also include $5.3-million of expenses, offset by interest income and dividends of $2.3-million.

For the year ended 2023, Helios incurred a net loss of $71.7-million, of which $58.0-million represents unrealized losses on its investment portfolio and foreign exchange. The unrealized losses were driven by similar factors that led to the unrealized losses in the fourth quarter. Also included in the net loss are expenses of $19.0-million, offset by interest income and dividends of $12.0-million.

Helios reported a book value per share of $4.39 as of Dec. 31, 2023, as compared with $5.03 in the prior year. The increase in fair value of the company's investment in Helios Managed Investments contributed 16 cents to the book value per share for the year. The unrealized loss in the company's investment in TopCo reduced the book value per share by 65 cents while the unrealized losses which were crystallized on the sale of certain legacy non-core investments reduced it by nine cents.

Additional investments in the Helios managed investments contributed to the TopCo LP fee streams and supported the company's strategy of seeding Helios Strategies. In addition, the sale of certain legacy non-core investments continued to support the company's strategy on exits.

Included in book value per share is $95.9-million of cash and cash equivalents as at Dec. 31, 2023, which is available to finance future investments. At Dec. 31, 2023, Helios had 108,169,817 common shares outstanding, as compared with 108,193,971 common shares outstanding at Dec. 31, 2022.

A material weakness was identified in the company's internal control over financial reporting for the year ended Dec. 31, 2023. Please refer to the company's management discussion and analysis for further information, including the company's proposed remediation plan in respect thereof.

Consolidated balance sheets, earnings (loss) and comprehensive income (loss) information follow and form part of this news release. Helios's detailed 2023 report can be accessed at its website.

About Helios Fairfax Partners Corp.

Helios is an investment holding company, the investment objective of which 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.

Glossary of non-GAAP (generally accepted accounting principles) 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 accounting standards and may not be with 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.

We seek Safe Harbor.