Friday, October 2, 2009

DRiP: Pengrowth Cuts Distributions

Pengrowth has announced a 30% reduction of their distribution starting on November 16, as a result of changes to its "value creation strategy".

I own a few trust units of the company in my DRiP portfolio, where it holds a very smal place. This is the third time in less than a year that this income trust has reduced its monthly distributions:
  • From $0.225 to $0.17 starting January 15, 2009;
  • From $0.17 to $0.10 starting March 16, 2009; and now
  • From $0.10 to $0.07 starting November 16, 2009.

So in a year, unitholders have seen their distributions decrease by almost 70%.

On the one hand, I can't say that I'm happy about this, even though this will have only a small impact on my portfolio. It is still a reduction of $12 to my dividends for next year.

On the other hand, I can't blame the board for finally looking to the long-term well-being of the company and its unitholders. I had not been putting much money into that company, and this confirms that it will remain only a small part of my portfolio.

1 comment:

The Rat said...

Nice post. I was totally bummed out from Pengrowth's continued reduction in distributions. A total disappointment.