Chemtrade Logistics Income Fund Reports Fourth Quarter and Solid Full Year 2012 Operating Results
TORONTO, February 21, 2013 – Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and year ended December 31, 2012. The financial statements and MD&A will be available on Chemtrade’s website at chemtradelogistics.com and on SEDAR at sedar.com.
The results for 2012 include the full year’s contribution from the acquisition of Marsulex Inc. (“Marsulex”) that was completed on June 24, 2011. For the year ended December 31, 2012, distributable cash after maintenance capital expenditures was $86.4 million or $2.07 per unit. The comparable numbers for 2011 were $73.2 million and $2.01 per unit. Revenue for the year was $919.4 million (2011: $880.6 million). EBITDA of $141.6 million was $26.8 million higher than the level generated in 2011. Cash flow from operating activities was $108.3 million (2011: $77.1 million). Net earnings for 2012 were $39.0 million compared with $60.3 million in 2011. The main reason for the decrease was a large income tax recovery of $25.6 million in 2011 versus only $3.5 million in 2012.
For the fourth quarter of 2012, revenue was $223.0 million, which was $24.2 million lower than the fourth quarter of 2011, mainly due to lower revenue in the International segment. Aggregate cash flow from operating activities was $39.6 million, up by $1.6 million from the level generated during the fourth quarter of 2011.
Distributable cash after maintenance capital expenditures for the fourth quarter of 2012 was $13.8 million or $0.33 per unit. The comparable numbers for the fourth quarter of 2011 were $12.3 million or $0.29 per unit. The fourth quarter results for both 2012 and 2011 included the impact of higher than normal spending on capital projects. Aggregate EBITDA for the fourth quarter of 2012 was $34.7 million compared with $32.6 million in 2011. The improvement in EBITDA was due to strength in the SPPC segment and lower corporate costs in 2012.
In the fourth quarter SPPC generated revenue of $147.0 million and EBITDA of $36.4 million compared with $150.1 million and $34.6 million, respectively, in 2011. The main reason for the decrease in revenue was lower prices for sulphur relative to 2011. The higher EBITDA during the fourth quarter of 2012 reflected improvements in most products in the segment.
Pulp Chemicals reported fourth quarter revenue of $13.1 million compared with $12.7 million in 2011. The segment generated EBITDA of $3.1 million, virtually the same as the fourth quarter of 2011.
International reported revenue of $62.9 million for the fourth quarter, compared with $84.5 million in 2011 and EBITDA of $3.8 million compared with $4.8 million in 2011. The reduced revenue and EBITDA were primarily due to lower volumes and lower prices for sulphuric acid.
Corporate costs during the fourth quarter of 2012 were $8.6 million, which was $1.3 million lower than the fourth quarter of 2011. The main reason for the decrease was a reduction in LTIP accruals.
Mr. Davis said, “The successful integration of the Marsulex businesses and our continuing focus on operational excellence through investment in our assets and our people were key factors in our strong performance in 2012. We will continue to pursue a strategy of optimizing our existing assets while expanding the size, scale and scope of Chemtrade with new businesses that complement our business model. We expect demand for most of our products and services to remain stable in 2013 and believe the combination of our diversified customer base, our long-term risk-sharing contracts and strong balance sheet, are more than sufficient to sustain our current distribution rate.”
Distributions declared in the fourth 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: prices and demand for commodities, products and services; future business strategy; 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 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 fourth quarter and full year 2012 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca/en/webcast on Friday, February 22, 2013 at
10:00 a.m. ET.
* * * *
For further information:
President & CEO
Tel: (416) 496-4176
Vice President, Finance & CFO
Tel: (416) 496-4177