MONTREAL, Nov. 15, 2015 /CNW Telbec/ - HNZ Group Inc. (TSX: HNZ.A, HNZ.B) (the "Corporation"), an international provider of helicopter transportation and related support services, announced today that the Board of Directors has made the decision to suspend the monthly dividend, effective January 1, 2016. Dividends previously declared will be paid including the dividend payment for shareholders of record at the close of business on December 31, 2015, which will be paid on January 15, 2016.
"While the Corporation continues to be profitable and generates free cash flow, the headwinds caused by low resource activity do not now appear to be short term, as initially thought," said Don Wall, President and Chief Executive Officer of HNZ Group. "Preserving cash and protecting the strong balance sheet to weather the current economic environment is our foremost priority. We do not make this decision lightly, knowing that many of our investors have invested in us for yield, but do so as we are now facing longer term cost resets from our resource based customers which are forcing us to work at all forms of cash savings, including regretfully our dividend. For fiscal 2015, the dividend payment totals $14.4 million."
"Our positive cash flows from operations and the suspension of the dividend will help provide a buffer and will enable us to invest in growth opportunities. As part of our quarterly dividend review, our Board felt strongly that the priority must remain on the preservation of the balance sheet. The alternative of drawing down the credit facility in order to continue the dividend payment is not prudent. We believe that this decision maintains the Corporation's position of financial strength and allows us to further our strategic objectives in funding our growth opportunities which we believe will ultimately increase long-term shareholder value," concluded Mr. Wall.
The Corporation sold excess assets in the third quarter and is continuing its cost reduction initiatives including reducing crew complement, support costs and discretionary spending, while employing greater use of contract crew to align the business with the current market climate. As of September 30, 2015 year to date, mining and oil and gas revenues comprise over 47.1% of the total Corporation revenues. Significant contracts remain in place for 2016 and HNZ Group is compliant with all of its financial covenants.
ABOUT HNZ GROUP INC.
HNZ Group is an international provider of helicopter transportation and related support services with operations in Canada, New Zealand, Australia, Norway, Southeast Asia and Antarctica. The Corporation operates in excess of 120 helicopters to support offshore and onshore charter activities. Offshore operations worldwide are provided through HNZ Global and partner Norsk Helikopterservice while onshore charter operations are managed by Canadian Helicopters in Canada, Asia-Pacific and Antarctica. Clients consist of multinational companies and government agencies including offshore and onshore oil and gas, mineral exploration, military support, hydro and utilities, forest management, construction, air ambulance and search and rescue. In addition to charter services, it provides ancillary services which include primarily third-party repair and maintenance services and flight training, including the internationally recognized HNZ Topflight advanced training centre in Penticton, British Columbia. HNZ Group is a publically traded company on the Toronto Stock Exchange (TSX: HNZ.A, HNZ.B) and is headquartered near Montreal, Canada employing approximately 700 personnel from 34 locations around the world.
Certain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Examples of such statements include, but are not limited to, the financial position, results of operations, objectives, dividend policy, participation in bidding processes, continuing business relationship with actual or potential key clients (in particular Rio Tinto and Shell), expected revenues from contracts with key clients, seasonal levels of activity, maintenance of contractual relationships, impact of any economic uncertainty, the Corporation's ability to reduce operating costs, expected competition, use of available funds, maintenance of strategic relationships with aboriginal groups and regulations (in particular environmental and transportation regulations) and legislation (including tax legislation) applicable to the Corporation.
Although the forward-looking statements contained in this press release are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The assumptions on which the forward-looking statements are based include, but are not limited to, general economic trends, industry trends, current contractual and business relationships, capital markets and current competitive, governmental, regulatory and legal environment.
These statements are not based on historical facts but instead reflect current expectations of management regarding future events and operating performance and speak only as of the date of this press release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed in this press release or referred to under "Risk Factors". These forward-looking statements are made as of the date of this press release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, unless required by applicable laws.
SOURCE HNZ Group Inc.
For further information: HNZ Group Inc., Matthew Wright, CFA, MBA, Vice President and Chief Financial Officer, Tel.: 780-429-6903