TORONTO, November 12, 2012 – Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and nine months ended September 30, 2012. It should be noted that the results for the third quarter of 2012 are directly comparable with the third quarter of 2011, which was the first full quarter of results following the acquisition of Marsulex. The third quarter 2012 financial statements and MD&A will be available on Chemtrade’s website at www.chemtradelogistics.com and on SEDAR at www.sedar.com.
Distributable cash after maintenance capital expenditures for the third quarter was $24.3 million, or $0.58 per unit (2011: $35.6 million, or $0.85 per unit), generated from revenue of $240.9 million (2011: $268.5 million). The International segment was the primary reason for the decrease in revenues due to lower volumes of sulphuric acid and of sulphur. Adjusted cash flow from operating activities for the period was $29.9 million (2011: $40.2 million). EBITDA for the third quarter was $35.9 million (2011: $45.8 million) and net earnings were $10.6 million compared with $7.7 million in the same period in 2011.
For the nine months ended September 30, 2012, distributable cash after maintenance capital expenditures was $72.5 million (2011: $61.0 million) or $1.74 per unit (2011: $1.76 per unit), generated from revenue of $696.3 million (2011: $633.4 million). EBITDA was $106.9 million (2011: $82.2 million). Adjusted cash flow from operating activities was $87.6 million (2011: $71.2 million), and net earnings for the first nine months of 2012 were $23.3 million (2011: $56.7 million, including an income tax recovery of $37.5 million recorded in the second quarter of 2011).
Mark Davis, President and Chief Executive Officer of Chemtrade, said, “Demand for most of our products remained firm in the third quarter and similar to the levels we enjoyed in the first half of this year. Each of our business segments posted stronger operating results than in the second quarter of this year.”
SPPC generated revenue of $158.1 million and EBITDA of $41.5 million for the third quarter of 2012 compared with $163.0 million and $43.0 million, respectively, in 2011. The main reason for the decrease in EBITDA was weakness in SHS products, whereas most other products performed well. Demand and pricing for sulphuric acid were steady, and volumes were higher than the third quarter last year.
Pulp Chemicals reported third quarter 2012 revenue of $13.4 million compared with $12.3 million in 2011. EBITDA for the third quarter was $3.0 million, compared with $3.2 million in 2011. The decrease reflected higher maintenance costs.
International reported revenue of $69.3 million for the third quarter of 2012, compared with $93.2 million in 2011. This reflected primarily lower volume of sulphuric acid and lower volume and lower prices for sulphur. EBITDA for the third quarter of 2012 was $3.0 million compared with $4.8 million in the third quarter of 2011.
Corporate costs during the third quarter of 2012 were $11.7 million, which was approximately $6.5 million higher than the third quarter of 2011. The main reason for the increase was the fair value adjustments for the Long Term Incentive Plan (LTIP), which resulted in an expense of $4.1 million, whereas in the third quarter of 2011 there were reversals of $2.0 million related to LTIP.
Mr. Davis said, “Our businesses and our business model are performing well as evidenced by our strong results through the first nine months of 2012. We expect higher maintenance capital expenditures in the fourth quarter, but still expect to generate strong results for the full year. Looking ahead, despite the prevailing economic uncertainty, we believe that our business model combined with our product, market and geographic diversity will allow us to continue to perform well in the fourth quarter and in 2013. Therefore, we expect to continue to generate “Free Cash” well in excess of that needed to maintain our distribution rate and implement our capital program.”
Distributions declared in the third quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking statements in this news release include statements respecting certain future expectations about: demand for commodities, products and services; capital expenditures; the effectiveness of the Fund’s business model and the sustainability of the Fund’s distributions. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the “RISK FACTORS” section of the Fund’s latest Annual Information Form and the “RISKS AND UNCERTAINTIES” section of the Fund’s most recent Management’s Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding: there being no significant disruptions affecting the operations of the Fund and its subsidiaries, whether due to labour disruptions, supply disruptions, power disruptions, transportation disruptions, damage to equipment or otherwise; the ability of the Fund to obtain products, raw materials, equipment, transportation, services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Fund’s expectations; the ability of the Fund to sell its products at prices in line with the Fund’s expectations; the timely receipt of required regulatory approvals; the cost of regulatory and environmental compliance being consistent with current levels or in line with the Fund’s expectations; the ability of the Fund to successfully access tax losses and tax attributes; the ability of the Fund to obtain financing on acceptable terms; currency, exchange and interest rates being consistent with current levels or in line with the Fund’s expectations; and global economic performance.
The Fund disclaims 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. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.
A conference call to review the third quarter 2012 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca/en/webcast on Tuesday, November 13, 2012 at 10.00 a.m. ET.
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For further information:
President & CEO
Tel: (416) 496-4176
Vice President, Finance & CFO
Tel: (416) 496-4177