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The Board of Directors review dividend distribution on a quarterly basis giving consideration to current financial performance, historical and future trends in the business, the expected sustainability of those trends as well as required long-term debt repayments, maintenance capital expenditures required to sustain performance. It is the long-term intent of the Company to pay quarterly dividends to shareholders.
Current years’ dividends:
Based on the reductions in commodity prices and the resulting decline in industry activity levels in 2015 and 2016 and uncertainties around future expected activity levels, the Board of Directors made the decision to suspend the payment of Cathedral’s quarterly dividend in late 2015. The decision to suspend the dividend was made in order to preserve cash, to manage liquidity, invest selectively in capital asset additions and pursue operational initiatives to better position the Company for improved industry conditions. The Board of Directors will review dividend distributions on a quarterly basis considering current performance, historical and future trends in the business and the expected sustainability of those trends in addition to considering the growth and maintenance capital expenditures required to support the business and other factors impacting the business. It is the long-term intent of the Company to pay quarterly dividends to shareholders.
Dividend payments are subject to a number of factors and considerations noted below (see Note 1 below).
Eligible Dividend Designation – pursuant to subsection 89(14) of the Income Tax Act of Canada (ITA) each dividend paid by Cathedral Energy Services Ltd. qualifies as an eligible dividend for Canadian Income.
For our history of dividend/distribution payments,click here.
Note 1: Cathedral’s ability to make dividend payments to Shareholders is dependent upon the operations and business of Cathedral. There is no assurance regarding the amounts of cash that may be available from Cathedral’s operations and business that could be available to fund future dividends or if dividends will be declared at all. The actual amount of any dividends will depend on a variety of factors, including without limitation, the current performance, historical and future trends in the business, the expected sustainability of those trends and enacted tax legislation which will affect future taxes payable as well as required long-term debt repayments, maintenance capital expenditures required to sustain performance, future growth capital expenditures, effect of acquisitions or dispositions on Cathedral’s business, and other factors that may be beyond the control of Cathedral or not anticipated by management of Cathedral. In the event significant cash requirements are necessary for non-dividend purposes or the profitability of Cathedral declines, there would be a decrease in the amount of cash available for dividends to Shareholders and such decrease could be material.