BNPUF - Bonavista Energy: The Dividend Doesn't Make Sense
Bonavista (OTCPK:BNPUF) released the 2018 annual results and the 2019 guidance. The company generated free cash flow and controlled its costs. Except that, I don't see anything positive.
The production dropped, the total netbacks are low, a big part of the high net debt is due in 2020 and 2021. And the 2019 guidance confirms the difficulties. Management planned a production drop to generate limited free cash flow.
Despite the risks, the company keeps on paying a dividend instead of focusing on reducing the net debt.
The market capitalization is a