Will Continue to BUY and HOLD__And Continue to DRIP
VIA ScotiaItrade "DRIP" Feature While 2023 is unlikely to represent a new Adjusted EBITDA run-rate, Chemtrade believes that its business has undergone a step-change improvement from the pre-COVID levels. In light of the improved sustainable long-term outlook for Chemtrade’s cash flow, Chemtrade’s Board increased its monthly distribution by 10%, from 5-cents per month to 5.5-cents per month on January 15, 2024, effective with the distribution declared during the month of January 2024. This distribution represents a Payout ratio of 45% based on the mid-point of Chemtrade’s guidance for 2024.
In addition, as part of its updated capital structure and capital allocation strategy, Chemtrade also announced the suspension of its DRIP”, initiated during the COVID pandemic. The suspension of the DRIP is effective with the distribution declared in January 2024 and payable in February 2024, at which time all distributions of the Fund will be paid only in cash.
The increase in the level of cash distributions is expected to have minimal impact on Chemtrade’s leverage and is not expected to impede Chemtrade’s ability to execute growth initiatives while maintaining a healthy balance sheet.