Toronto-based alternative investment management company Integrated Asset Management Corp. announced on Tuesday that it would suspend its dividend after reporting a quarterly loss of $6.4 million.
For the second fiscal quarter ended March 31, Integrated Asset Management saw its assets under management fall $521 million to $2.1 billion from the previous year. The steep drop was a result of market depreciation and net redemptions in retail alternative investments, the company said.
The retail unit has been “negatively affected by the unprecedented events in the global financial markets,” the firm said.
Integrated Asset Management’s total revenues in the quarter were $3.7 million, down sharply from $5.3 million in the same quarter last year. The drop reflected a decrease in management fees in its retail alternative investment activities and fewer transaction fees in its private corporate debt and real estate asset management divisions.
For the quarter, the company posted a net loss of $6.4 million, or 23¢ a share, down from profit of $66,000 in the same quarter of 2008.
Integrated Asset Management’s board of directors decided to suspend the company’s semi-annual dividend of 4¢ a share, which would have been payable in June.
The decision is partially a result of a “constrained” earnings outlook due to the drop in AUM and the company’s operating losses.
In addition, the firm anticipates that acquisition and merger opportunities may arise from the current economic environment. Suspending the dividend will boost the company’s available cash to take advantage of such opportunities, the company said.
Integrated Asset Management shares on the Toronto Stock Exchange plunged in the first hour of trading on Tuesday. At 11:04 am, the shares were at $0.40, down $0.10, or 20%.
News release:
http://www.marketwire.com/press-release/Integrated-Asset-Management-Corp-TSX-IAM-988220.html