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CSE Global commits to keeping FY18 dividend at 2.75 cents per share
CSE Global on Thursday reiterated that it is "willing to ride through this difficult period with its shareholders by maintaining the absolute dividend at 2.75 cents per share per year", its cash position permitting.
This, it said, is higher than the approximately 40 per cent dividend payout ratio before "this downturn".
CSE normally generates 70 per cent of operating profit after tax as cash over a three- to five- period.
It had earlier made this dividend pledge to its major shareholder Quarz Capital Management at a meeting on March 5.
"However, CSE presently only has net cash of S$15.5 million as at the end of 2017 and does not intend to borrow to pay dividends. Consequently, it is only willing to commit to pay 2.25 cents per share for FY2018," CSE said in its statement on Thursday.
"CSE will review its cash position at the end of Q1 2018 and Q2 2018 and the outlook of cash generation for the full year of FY2018 to determine whether an additional 0.5 cents per share may be declared for FY2018," it added.
The global oil and gas industry downturn and the end of mining boom in Australia had impacted CSE business from FY2014.
In February this year, activist fund Quarz wrote an open letter to the company's management and board, blaming investors' lack of confidence in CSE on the leadership team's inadequate cost and operational discipline and suggesting that CSE immediately distribute S$18 million of its net cash position as a special dividend to shareholders.
Shares of CSE added half a cent to finish at S$0.375 on Thursday.