Rogers Sugar to pay $34 million in special dividends for years of free cash flow

MONTREAL – Rogers Sugar says it will pay shareholders nearly $34 million through a 36 cents per share special dividend next month on top of its regular payout as it distributes a portion of free cash flow generated over five years.

The Montreal-based company said the special dividend will be paid by Feb. 28 to shareholders of record on Feb. 8. It’s on top of the regular quarterly dividend of nine cents per share payable by April.

The special dividend will be financed through a line of credit and available cash. Rogers said the payment relates to $64.7 million of undistributed free cash generated between October 2007 and last September.

The extra payout was announced after markets closed Wednesday as Rogers (TSX:RSI) said its profit surged to $16.1 million in the first quarter on derivative gains despite lower export volumes.

Rogers earned 17 cents per share for the seasonally strong period ended Dec. 29, compared to 11 cents a year earlier when net earnings were $9.88 million.

Revenues decreased to $142.4 million from $175.8 million in the year-ago period as total volumes slipped to 156,415 tonnes from 172,754 tonnes in the 2012 quarter.

Higher industrial and consumer volumes were offset by lower exports due to a special quota for sugar sold to the United States.

Excluding gains from the mark to market value of forward contracts and derivatives related to sugar prices, natural gas and currency, profits decreased 24.5 per cent to $14.9 million, or 16 cents per share. That compared to $19.76 million or 22 cents in the prior year.

Lower export volumes suppressed gross margins and pre-tax operating income. Free cash flow also fell to $18.1 million from $21.7 million in the first quarter of 2012.

Rogers said it expects industrial volume will be higher this fiscal year as additional volume has been contracted with new and existing accounts. The company said it has also contracted additional liquid sugar volume with a large bottler in western Canada.

The company operates sugar cane refineries in Montreal and Vancouver and has a sugar beet factory in Taber, Alta.

On the Toronto Stock Exchange, Rogers Sugar shares closed down two cents at $6.07 in Wednesday trading.