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CALGARY - Inter Pipeline Fund (TSX:IPL.UN) is raising the monthly distributions it pays to unitholders by half a cent after an internal review at the oil and gas pipeline company concluded with a "strong, confident outlook" for the near term.
The Calgary-based income fund said Wednesday it will boost the monthly payout to 7.5 cents from seven cents a unit, raising the distributions on annualized basis to 90 cents from 84 cents, a 7.1 per cent increase. Unitholders of record on Dec. 22 will be eligible for the new rate, with initial payments expected on or about Jan. 15.
"The distribution increase announced today is a clear indication of our strong, confident outlook for the business," president and CEO David Fesyk said in a statement.
"Inter Pipeline's industry fundamentals remain strong and major capital projects under development are advancing according to plan. In the near term, these projects will add significant new cash flow and further enhance the long term sustainability of distributions to unitholders."
Inter Pipeline has petroleum transportation, bulk liquid storage and natural gas liquids extraction businesses in Western Canada, the United Kingdom, Germany and Ireland.
The company recently brought a $1.8-billion capacity expansion project on the Corridor pipeline system to mechanical completion and continues to expand capacity at the Cold Lake oilsands pipeline system, among other projects. It said recent projects are expected to increase pre-tax earnings by about $200 million per year when in service, or a 60 per cent improvement from 2008.
Units of the fund were up 14 cents or 1.4 per cent at $10.29 in morning trading on the Toronto Stock Exchange.
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