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Chemtrade Logistics Income Fund Reports 2009 Third Quarter Results

Further Improvements Over First and Second Quarters This Year

TORONTO, November 11, 2009 – Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and nine months ended September 30, 2009.  The Fund reported further improvements in operating earnings compared to the first and second quarters of 2009.  Demand for most of Chemtrade’s products improved in the third quarter, including demand for sulphuric acid, Chemtrade’s largest product by volume.

Comparing the third quarter 2009 results with the second quarter this year, cash flow from operating activities was $18.9 million (Q2 2009:  $6.8 million) and Distributable cash after maintenance capital expenditures for the period was $11.6 million, or $0.38 per unit (Q2 2009:  $11.0 million, or $0.36 per unit), generated from revenue of $127.0 million (Q2 2009:  $124.6 million) and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $21.5 million (Q2 2009:  $17.5 million).  Net earnings for the third quarter were $19.5 million (Q2 2009:  $13.6 million).

For the nine months ended September 30, 2009 cash flows from operating activities were $15.8 million (2008:  $53.7 million), and Distributable cash after maintenance capital expenditures was $32.2 million (2008:  $72.0 million), or $1.04 per unit (2008:  $2.14 per unit).  EBITDA was $57.3 million (2008:  $94.7 million), and revenue was $413.4 million (2008:  $886.0 million).  Net earnings for the first nine months of 2009 were $34.4 million (2008:  $42.8 million).

Mark Davis, President and Chief Executive Officer of Chemtrade, said, “Our ongoing focus on operating efficiencies, diversified customer base and multiple supply sources continue to position us for success.  The strength of our business portfolio is evident in our results.  Despite lower economic activity this year and a labour disruption at a major supply source, the Fund continues to generate Distributable cash after maintenance capital expenditures comfortably in excess of our distribution rate and maintain its strong balance sheet.”

Sulphur Products & Performance Chemicals (SPPC) generated revenue of $77.7 million, which was similar to the level of $77.9 million generated in the second quarter of 2009.  EBITDA for the third quarter was $21.3 million, compared with $15.2 million in the second quarter of 2009.  The improvement over the second quarter reflected higher volumes for most product lines as well as lower distribution and operating costs.  EBITDA for the quarter also benefited from insurance recoveries of $3.8 million related to the incident at the Beaumont plant in 2008, compared with recoveries of $2.3 million in the second quarter this year.

Pulp Chemicals reported third quarter revenue of $13.8 million compared with $13.2 million in the second quarter of 2009.  EBITDA achieved during the third quarter of $4.5 million was also similar to the level achieved during the second quarter of 2009.

International reported revenue of $35.5 million for the third quarter, which was slightly higher than the level of $33.5 million reported for the second quarter of 2009.  EBITDA for the quarter was $3.2 million on lower volumes versus the $4.9 million earned in the second quarter of 2009.

Mr. Davis said, “We remain focused on pursuing the right initiatives to ensure long term sustainability of earnings while at the same time positioning ourselves for maximum benefit when demand for our products increases.  For example, we recently added new product sources that potentially could create as much as 10% more volume of sulphuric acid than we have traditionally marketed.  Despite the economic challenges that we and our customers have been facing in 2009, the nature of our business model, coupled with our strong balance sheet and ample liquidity are more than sufficient to sustain our current distribution rate.”


Distributions declared in the third 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 volume of sulphuric acid that may be available from new sources; and
  • The Fund’s ability to sustain its current distribution rate.

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 third quarter 2009 results will be webcast live on and on Thursday, November 12, 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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