August 12, 2008 / 12:03 PM / 10 years ago

UPDATE 1-Arctic Glacier cuts distribution by 18 percent

TORONTO, Aug 12 (Reuters) - Arctic Glacier Income Fund AG_u.TO said on Tuesday it temporarily cut its distributions by 18 percent due to increased legal costs related to an antitrust investigation in the United States, and softening economic conditions it says are likely to cut into demand.

The packaged-ice company said it would temporarily reduce its distributions to an annualized 90 Canadian cents, from C$1.10 annualized, starting with its August distribution payable on Sept. 15.

“Arctic Glacier’s increasing cost base in the context of current economic conditions led the Fund to examine its ability to finance operations while paying monthly distributions at current levels,” said Keith McMahon, president and chief executive of Arctic Glacier

Winnipeg-based Arctic Glacier said it earned C$7.8 million, or 20 Canadian cents a unit, in the second quarter, down from C$11.7 million, or 29 Canadian cents a unit, a year earlier.

It said the costs related to the investigation into the U.S. packaged ice industry by the Antitrust Division of the U.S. Department of Justice came to C$2.1 million for the second quarter.

Revenue was C$77.6 million, down 4 percent from C$97.8 million a year earlier, which the company said was due to the stronger Canadian dollar.

Arctic Glacier said the acquisition of Koldkist Ice of Portland, Oregon during the quarter would add US$8.5 million in annual revenues. ($1=$1.07 Canadian) (Reporting by John McCrank; editing by Janet Guttsman)

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