CIRTEK Holdings Philippines Corp. has halted the payment of cash dividends, saying the move was needed to keep the business running.
“[I]n a special meeting held on 7 March 2025, upon recommendation of management, [the company’s board] approved the suspension of payment of the declared cash dividends until further notice for all [its] preferred shares,” the firm told the stock exchange on Monday.
The company said that the suspension was meant “to manage liquidity and to preserve its resources to ensure long-term sustainability of its business.”
In January, Cirtek had declared cash dividends for the unlisted preferred A and B-1 shares and preferred B-2 Subseries A, B, C and D shares.
The preferred A share cash dividend was set at $0.000012196 per share or a total of $8,537.01 while that for the preferred B-1 shares was P0.06125 or P4.29 million. The payouts were to go to all shareholders on record as of Feb. 21, to be issued on an unspecified date.
For the preferred B-2 shares, meanwhile, the announced dividends were $0.0228125, $0.025, P1.7678125 and P0.968825 apiece, respectively, for the A, B, C and D subseries, to be paid out over four quarters. The aggregate payouts would total $1.53 million, $500,000, P29.9 million and P27.7 million per dividend period, with the schedule of payments again to be announced.
Cirtek officials were not immediately available for comment. DragonFi Securities Inc. analyst Jarrod Tin, meanwhile, said “we view [Cirtek]’s suspension of cash dividends on its preferred shares as a concerning development, suggesting potential liquidity issues.”
“A closer examination of [Cirtek]’s financials reveals a cash balance of approximately $15.1 million as of [the third quarter of 2024], which is less than half of its [fiscal year 2023] cash position at $36.7 million — an alarming decline,” he added.
“This signals deteriorating cash flow, raising doubts about the company’s ability to meet its dividend obligations.”
“Given these red flags, we recommend that preferred shareholders consider liquidating their holdings, as [Cirtek]’s ability to sustain dividend payments appears to be compromised,” Tin continued.
AP Securities research head Alfred Garcia, meanwhile, said “it’s a rare occurrence for companies to suspend dividend payments on preferred shares, as it is a signal that the company is running on ‘survival mode’.”
“The last time we saw this was with Phoenix Petroleum (PNX) in 2022. Back then, PNX said that dividend payment was deferred to preserve resources to improve operations, and ensure the long-term sustainability of the business,” he noted, similar to the reason stated by Cirtek.
He also said that Cirtek’s cash pile had dropped alarmingly over the past two years from $44 million to $15 million.
“The company has been cash flow negative in 21 out of the past 36 quarters,” Garcia said, adding that “this is a sign of a company in trouble, and if the company has come to the point that it suspends dividends on preferred shares, we are not optimistic that a turnaround will happen in the near future.”
Cirtek’s share price fell by 2 centavos to P1.13 apiece on Monday.
Author: Earl John Alfaro
Source:https://www.manilatimes.net/2025/03/11/business/corporate-news/cirtek-halts-cash-dividend-payments/2070343?fbclid=IwZXh0bgNhZW0CMTEAAR39L9z0eQLE7uJOh78GEDAIBDq2e-NijxXAW_krS_nn0_7wEAUn6PYr6j8_aem_Bm31lqTg2K–MLn2V2gVWA
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