Weak dollar slams Canada's Cinram
EmptyTORONTO -- Canadian-based multimedia product maker Cinram International Income Fund looks set to cut distributions to its shareholders next week, the company said Friday.
Responding to a query from the Toronto Stock Exchange, Cinram said it will "likely" reduce its payback to unitholders because of the surging Canadian dollar.
"Based on preliminary financial information and discussions to date between management and the trustees, it is likely that a decision to cut distributions will be made at the trustees' meeting on Nov. 5, 2007, at which time Cinram will issue a news release to formally communicate its decision," Toronto-based Cinram said in a statement.
Cinram makes prerecorded media products for Hollywood studios and other entertainment customers, and is the latest Canadian media company heavily reliant on foreign sales to be impacted negatively by the high-flying Canadian dollar.
Virtually all of Cinram's sales of DVDs and compact discs are made outside of Canada.
RBC Dominion Securities analyst Steve Arthur, in a report last week, predicted that Cinram will reduce its distributions to unitholders from CAN$3.25 ($3.15) to CAN$2.40 ($2.33) per unit due to currency woes.
The Canadian dollar recently passed the American dollar in value for the first time since 1976.