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Sitnasuak Announces Strong 2015 Dividend, But Forecasts Profits May Be ‘Slightly Down’ in 2016

Photo: Laura Kraegel, KNOM.

Sitnasuak Native Corporation announced its annual dividend late last month: $6.20 a share for nearly 3,000 shareholders and an extra $500 for each of the 450 elders with a stake in the business. CEO Richard Strutz said the total payout comes to about $1.5 million.

“We’ve had a great year — up considerably more than 2014,” said Strutz. “Most business units are doing above planned.”

That includes one of Sitnasuak’s most profitable operations — a fabric manufacturer in Puerto Rico, which Strutz said has shielded the corporation from Alaska’s struggling economy. Bonanza Fuel has also rebounded after a tough 2014, while the corporation’s title companies and real estate investments have held strong.

“We developed one property which is a charter school in Anchorage called Rilke Schule, which is a school within the Anchorage School district but we actually built the building and now we lease it back,” he said. “We completed that last year, and it’s about a $12 million school.”

But with Alaska’s real estate market softening, Strutz said Sitnasuak may see less revenue from those operations in the next fiscal year. He also said the corporation’s 7(j) money — which comes from natural resource revenues distributed by larger regional corporations — may be “adversely affected” in 2016.

While Sitnasuak is forecasting next year’s profits to be “slightly down” from this year’s strong showing, Strutz said the corporation still expects to do well enough to continue providing the extra dividend for elders — a bonus that was announced for just the fourth time this year.

“The corporation hit on this idea which is helping elders and giving them a little bit of extra benefit,” he said. “It’s not a lot — $500 isn’t going to make or break them — but it’s a nice gesture to show how much we really do care about them.”

And Sitnasuak is looking to do more.

“The corporation is doing well, and it wants to do more in Nome to benefit people in the Nome community, which is our base,” Strutz said.

The corporation had hoped to play a role in the proposed expansion of Nome’s port, which has a projected price tag of $210 million. But in October, the U.S. Army Corps of Engineers announced it was putting the project on hold for 12 months in light of the challenging economy and the decision by Royal Dutch Shell to indefinitely suspend its plans to drill for Arctic oil.

Still, Strutz said the proposed port expansion is “a place where we wanted to be a real big presence.”

“Nome is probably still the right place for a port to help with Arctic development,” he said. “It may not be oil, but I think it’s going to continue to open up more and more. And I think Nome is going to be front and center in that development.”

Strutz said Sitnasuak will look to get involved if that development goes forward. In the meantime, he said 2015 dividend checks were mailed last week, so shareholders can expect them soon, if they haven’t arrived already.