EDIT Announces Interim Financial Results, Change to Monthly Distribution and 2009 Annual Redemption
CALGARY, ALBERTA--(Marketwire - Aug. 18, 2009) - NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA.
EnerVest Diversified Management Inc., the Administrator of EnerVest Diversified Income Trust (TSX:EIT.UN) ("the Fund"), today announced the following:
- Financial results for the six month period ended June 30, 2009
- Reduction in monthly distribution to $0.10 per unit
- 2009 voluntary redemption date will be October 7, 2009
- Conference call and webcast to be held Wednesday, August 19 at 11:30 a.m. MST (1:30 p.m. EST)
FINANCIAL RESULTS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009
- Generated a total return of 18.9% on a net asset value basis for the period, outperforming the benchmark S&P/TSX Income Total Return Trust Index by 4.4%. On a market price basis, the Fund generated a 46.4% total return for the period
- Achieved an Increase in Net Assets From Operations of $188.2 million. This is a decrease from $236.2 million in the prior period, and is mainly the result of lower distribution rates from income trusts held by the Fund. These lower distribution rates were caused by significant reductions in commodity prices and the impact of the general economy over the past 12 months
- Distributed $0.96 per unit, on a consolidated basis, for the period. This was derived from portfolio Net Investment Income and capital returns, with approximately half of the amount distributed being funded by distribution income received
- Reduced leverage to 9% of total assets as at June 30, 2009 from 12% as at December 31, 2008
- Implemented the following initiatives of the Value Enhancement Plan introduced in March 2009:
- Reduced the discount to net asset value (NAV) from 26.3% on January 2, 2009 to 13.8% on August 17, 2009 and completed a three to one unit consolidation in April 2009 enhancing unitholder flexibility
- Continued to enhance the investment portfolio. Approximately 55% of total assets are currently invested in securities that will not be affected by the federal income trust tax changes coming into effect in 2011. During the reporting period the Fund increased its weighting in fixed income products to 13.0% from 0.3% and common shares to 29.7% from 13.6% of total assets
"Overall the Fund has performed well during the past six months. Our returns were strong. We lowered the Fund's risk profile, reduced its use of leverage during a difficult financial period and continued to reposition the portfolio for the changing environment approaching in 2011," said Jacob Roorda, President and CEO. "While the initial recovery from the economic downturn experienced last fall has been positive, we remain cautious and have positioned the portfolio defensively given ongoing economic uncertainty."
The semi-annual Management Report of Fund Performance (MRFP), financial statements and notes will be available on SEDAR and at http://www.enervest.com.
MONTHLY DISTRIBUTION REDUCTION
EnerVest announces a reduction of the Fund's monthly distribution to $0.10 per unit from $0.15 per unit effective with the August monthly distribution. This change will result in a distribution yield of approximately 10% based on the current NAV per unit. This yield is consistent with the Fund's 10 year total return on NAV of approximately 10%. The record date for this distribution is August 31, 2009 and the payment date will be September 15, 2009. The ex-distribution date for this payment is August 27, 2009.
The Fund's monthly distribution amount is consistently measured against the following objectives:
- Maximize investment returns and unitholder distributions, while pursuing a lower investment risk profile than that of the general equity markets
- Ensure the long-term viability and sustainability of the Fund by aligning distributions with total returns
- Provide distribution stability to our unitholders, by ensuring that payout levels remain consistent and by minimizing payout changes
The Administrator, in consultation with the Investment Manager, believes that after weighing these objectives and considering the decline in distributions received on the portfolio's income trust investments, a distribution reduction at this time is prudent. However, should economic factors change and investee companies increase distributions to the Fund, an increase in monthly distributions may be warranted in the future. Each year, the Fund is required to distribute 100% of taxable income to unitholders.
"Despite positive economic indicators and the capital appreciation experienced by the Fund's portfolio year to date, we have reduced the monthly distribution in order to align it with portfolio income and returns and to prevent erosion of the fund value through excessive return of capital," Mr. Roorda said. "We understand that many of our unitholders rely on this distribution and we considered this decision very seriously. However, this decision supports one of our main objectives, which is to protect the long-term viability and sustainability of the Fund for the benefit of all unitholders. We also believe that the resulting yield of 10% of NAV, along with the prospect of capital appreciation, provides a very attractive investment return for our unitholders."
2009 VOLUNTARY ANNUAL CASH REDEMPTION
EnerVest announces that the date of the first voluntary annual cash redemption of the Fund has been set for October 7, 2009 (the "Redemption Date"). The redemption provides unitholders with the ability to redeem their units at a price equal to 95% of the average NAV, based on the three trading days preceding the Redemption Date, less direct costs.
"We introduced this initiative as part of the Value Enhancement Plan to provide our unitholders with additional liquidity at price levels which should be higher than the market price of their units," said Jacob Roorda, President and CEO.
Unitholders wishing to redeem their units must provide notice of their intent to do so no later than September 16, 2009. Unitholders are advised to contact their investment advisor or brokerage office to submit a redemption request to EnerVest's transfer agent, Computershare Trust Company of Canada, via the Canadian Depository for Securities. If unitholders are registered holders (via a physical share certificate in their name) they are advised to contact Computershare directly at 1-800-564-6253 to redeem their units. Full details about the redemption process will be available on our website at http://www.enervest.com or you can contact us at 1-877-434-2796. Units that have been tendered and accepted for redemption will remain eligible for the August and September distribution.
The Fund is offering unitholders the option to redeem up to 10% of the aggregate outstanding units of the Fund. If redemption requests exceed 10% of the aggregate units of the Fund, the Fund will redeem units up to the maximum on a pro rata basis based on the amount tendered.
Key 2009 Redemption Dates:
August 18 to September 16: Unitholders may tender units for redemption
October 7: Redemption Date
October 16: Payment of redemption proceeds on or before this date
CONFERENCE CALL AND WEBCAST
EnerVest will hold a conference call and webcast for unitholders and investment advisors to discuss EnerVest's financial results on Wednesday, August 19, 2009. Management will provide a brief presentation and answer questions. In order to address as many questions as possible, questions will be taken by email. Questions that are not answered during the call will be responded to directly by our investor relations team. Questions may be submitted in advance of the call to ..
Date: Wednesday, August 19, 2009
Time: 11:30 am MST (1:30 pm EST)
Call in number: 1-866-223-7781 or 1-416-340-8018
Webcast: A link to the webcast will be available at http://www.enervest.com
An archived recording of the call will be available from approximately one hour after the call until midnight August 26, 2009 by dialing 1-800-408-3053 or 1-416-695-5800 and entering the replay access code 2642068 followed by the pound (#) sign.
EnerVest Diversified Income Trust is Canada's largest and most liquid closed-end investment fund. Listed on the Toronto Stock Exchange under the symbol EIT.UN, the Fund is an actively managed diversified portfolio of income generating and capital growth securities, designed to maximize distributions and Net Asset Value for the benefit of its unitholders.
Certain statements included in this news release constitute forward-looking statements. The forward-looking statements are not historical facts but reflect EnerVest Management Ltd.'s and its affiliates (the "Administrator") current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Administrator believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Administrator undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.