Q: CFX Canfor Pulp Products
Yesterday CFX announced that they were suspending their dividend ($0.05) for the quarter. It’s getting punished today. I see that you wrote last month that the market was probably uncertain about the new CEO, pulp prices and the global economic picture. CFX also noted in the last quarter some onetime costs, settling of the labour agreements and the plant outage. I note that in the past when CFX was an income trust, the distributions went from $1.44 in 2008 to $0.48 to $0.12. By 2010 the payout was raised to $3.00. Now in a further two years it has dropped to a $1.60 dividend when they converted to a corporation, then reduced to $1.00, then $0.88, then $0.20 and now ZERO. Based on this pattern, one would hope that within two years the dividend will be back to $1.60! I’ve held CFX for many years and would you agree that in the long run it might be a good bet to hold and expect some better quarters ahead? Or do you think that there’s a fundamental change in the company’s management and business?
Yesterday CFX announced that they were suspending their dividend ($0.05) for the quarter. It’s getting punished today. I see that you wrote last month that the market was probably uncertain about the new CEO, pulp prices and the global economic picture. CFX also noted in the last quarter some onetime costs, settling of the labour agreements and the plant outage. I note that in the past when CFX was an income trust, the distributions went from $1.44 in 2008 to $0.48 to $0.12. By 2010 the payout was raised to $3.00. Now in a further two years it has dropped to a $1.60 dividend when they converted to a corporation, then reduced to $1.00, then $0.88, then $0.20 and now ZERO. Based on this pattern, one would hope that within two years the dividend will be back to $1.60! I’ve held CFX for many years and would you agree that in the long run it might be a good bet to hold and expect some better quarters ahead? Or do you think that there’s a fundamental change in the company’s management and business?
