Far East Orchard is a relatively unknown company on the SGX. However, what I noticed is that it has been constantly declaring a dividend of 6 cents annually. At a current price of $1.27 per share, this translates to a yield of 4.65%.
Far East Annual Declared Dividends Is the 6 cents dividend sustainable?
This is the first question I had in mind. While delving into Far East’s cash flow, I did not use the reported figure under ” net cash from operating activities” but instead “Cash before working capital changes”; this eliminates the chance of companies using trade receivables or trade payables to juice up their operating cashflow. Below is what I found for Far East Orchard:
FY14: $50.9 Million
FY15: $36.2 Million
FY16: $24.7 Million
FY17: $27.2 Million
FY18: $28.9 Million
Far East Orchard has a constant interest expense of $5.5-6.0 Million. So netting it off, it leaves about $22 Million. To sustain Far East’s Dividends,