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Chemtrade Logistics Income Fund Reports 2009 Second Quarter Results

Results Show Solid Improvement over First Quarter 2009

TORONTO, July 28, 2009 – Chemtrade Logistics Income Fund (TSX:  CHE.UN) today announced results for the three months and six months ended June 30, 2009.  The Fund reported solid improvements in operating earnings compared to the first quarter of 2009, primarily reflecting the return to full production of Chemtrade’s Beaumont, Texas plant late in the first quarter following a prolonged shutdown since August 2008.

Cash flow from operating activities for the second quarter was $6.8 million (2008:  $33.7 million) and Distributable cash after maintenance capital expenditures for the period was $11.0 million, or $0.36 per unit (2008:  $24.1 million, or $0.72 per unit), generated from revenue of $124.6 million (2008:  $274.3 million) and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $17.5 million (2008:  $30.3 million).  Net earnings for the second quarter were $13.6 million compared with $13.8 million in the same period in 2008.

For the six months ended June 30, 2009 cash flows from operating activities were negative $3.1 million (2008:  $39.8 million), and Distributable cash after maintenance capital expenditures was $20.6 million (2008:  $42.0 million), or $0.67 per unit (2008:  $1.25 per unit).  EBITDA was $35.7 million (2008:  $53.0 million), and revenue was $286.4 million (2008:  $492.1 million).  Net earnings for the first six months of 2009 were $14.9 million (2008:  $23.3 million).

Mark Davis, President and Chief Executive Officer of Chemtrade, said, “In 2008, our results benefitted from the historically high world prices for sulphuric acid and sulphur.  In 2009, despite a general reduction in demand for most products and lower pricing for sulphuric acid and sulphur, Chemtrade has generated significant Distributable cash after maintenance capital expenditures, improved the results of its operating business segments this quarter compared to the first quarter of 2009 and maintained its strong balance sheet.”  

Sulphur Products & Performance Chemicals (SPPC) generated revenue of $77.9 million compared with $127.0 million in 2008. EBITDA for the second quarter was $15.2 million, $23.9 million in the second quarter of 2008.  Generally weaker demand resulted in lower sales volumes for most products in 2009 and lower margins on sulphuric acid compared with 2008, more than offsetting the benefit of the weaker Canadian dollar on U.S. dollar denominated revenue.  Results for the quarter included a partial payment of $2.3 million for business interruption insurance related to the incident at the Beaumont plant.  Second quarter EBITDA results were $6.1 million better than the first quarter of 2009 reflecting the positive impact of the resumption of operations at the Beaumont plant.

Pulp Chemicals reported second quarter revenue of $13.2 million compared with $14.4 million in 2008, reflecting reduced demand for sodium chlorate.  The negative impact of the lower volume was partially offset by lower costs.  EBITDA was $4.7 million compared with $5.0 million in 2008.

International reported revenue of $33.5 million for the second quarter, compared with $132.9 million in 2008, reflecting reduced volume and prices for sulphur and sulphuric acid due to much weaker global demand.  EBITDA for the quarter was $4.9 million compared with $8.8 million last year.

Mr. Davis said, “In these challenging economic times, Chemtrade will continue to deliver solid results due to our portfolio of businesses and our risk mitigating business model.  Moreover, we will be well positioned to take advantage of an improved economy and pick-up in general industrial demand when that time comes.”  Mr. Davis also noted that Chemtrade will continue supplying sulphuric acid to its customers in North America despite the work stoppage at Vale Inco.  “Although Vale Inco has not produced sulphuric acid since early May, we have secured alternative supply resulting in our inventory levels continuing to be higher than we traditionally carry.  This provides further comfort to our customers.”


Distributions declared in the second quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.

This news release contains certain statements which may constitute “forward-looking” statements within the meaning of certain securities laws, including the “safe harbour” provisions of the Securities Act (Ontario).  The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions are intended to identify forward-looking statements.  Forward-looking statements in this news release describe the expectations of Chemtrade as of the date of this news release.  Our actual results could be materially different from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate.  As a result, we cannot guarantee that any forward-looking statement will materialize.  Forward-looking statements do not take into account the effect that transactions or non-recurring items announced or occurring after the statements are made may have on our business.  We disclaim any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

This news release contains forward-looking statements about the objectives, strategies, financial condition, results of operations and businesses of the Fund, including, but not limited to:

  • the Fund’s financial performance during varying economic conditions; and
  • the expected effect on the Fund’s sulphuric acid supply due to the Vale Inco work stoppage.

Financial outlook information contained in this press release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant information currently available.  Readers are cautioned that such financial outlook information contained in this press release should not be used for purposes other than those for which it is disclosed herein.

Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at

A conference call to review the second quarter 2009 results will be webcast live on and on Wednesday, July 29, 2009 at  10:00 a.m.

To view this entire news release including financial statements, download the PDF.

* * * *

For further information:

Mark Davis
President & CEO 

Tel: (416) 496-4176

Rohit Bhardwaj
Vice President, Finance & CFO 

Tel: (416) 496-4177


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