TORONTO, May 15, 2013 – Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months ended March 31, 2013. The first quarter 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 first quarter was $27.0 million, or $0.65 per unit (2012: $24.3 million, or $0.58 per unit), generated from revenue of $210.0 million (2012: $227.9 million). During the first quarter of 2013 and the comparable period of 2012, distributable cash benefited from maintenance capital expenditures being lower than the anticipated annual run rate. Maintenance capital expenditures during 2013 are expected to be approximately $35.0 – $40.0 million. Adjusted cash flows from operating activities for the period were $29.6 million (2012: $27.5 million). The primary reason for the decrease in revenues was lower revenues in the International segment. EBITDA for the first quarter was $35.2 million compared with $34.2 million in the first quarter of 2012. The improvement in EBITDA was mainly due to higher sales volumes of sulphuric acid and slightly improved margins for several products within the SPPC segment. Net earnings were $4.3 million compared with $4.2 million in the same period in 2012. From a net earnings perspective, the positive effects of higher EBITDA and lower finance costs in 2013 were offset by an unrealized foreign exchange loss of $3.1 million in 2013 compared with a gain of $2.7 million in 2012.
Mark Davis, President and Chief Executive Officer of Chemtrade, said, “Chemtrade had a good start to the year. Although business conditions appeared to be more unsettled in the first quarter of 2013 than throughout 2012, we posted steady results. We continue to benefit from the diversity of our business portfolio, operational excellence initiatives and our risk-sharing business model. We also continue to benefit from the relatively stable North American economy which is the source of the majority of our earnings.”
SPPC generated revenue of $145.0 million and EBITDA of $39.3 million compared with $148.1 million and $38.2 million, respectively, in 2012. The higher EBITDA for the quarter was primarily due to higher sales volumes of sulphuric acid and slightly improved margins for several products within this segment. The main reason for the decreased revenue was lower prices for sulphuric acid and for sulphur relative to 2012.
Pulp Chemicals reported first quarter revenue of $14.2 million compared with $13.1 million in 2012, reflecting increased volumes of sodium chlorate. EBITDA was $3.6 million which was $0.4 million higher than the level generated during the first quarter of 2012.
International reported revenue of $50.8 million for the first quarter, compared with $66.7 million in 2012. This significant reduction in revenue reflected lower volumes and lower prices for sulphuric acid. However, EBITDA for the quarter was $2.4 million, which was only slightly lower than the $2.6 million last year. Chemtrade was able to effectively maintain margins despite the top line decreases because its business model mitigates the effects of typical chemical commodity price risk.
Corporate costs during the first quarter of 2013 were $10.1 million, which was slightly higher than the first quarter of 2012. Of these costs LTIP expenses were $0.7 million higher than the first quarter of 2012.
Mr. Davis said, “Although we continue to be concerned about the strength of the economy, our operating results over the past several years are proof that our business model works in mitigating the effect of differing economic conditions on our results. We will continue to focus on the key building blocks that have made us successful, namely, operational excellence, supply reliability and an engaged and active work force. We will also continue to optimize our existing assets while seeking opportunities to expand the size, scale and scope of our business with new businesses that complement our business model.”
Distributions declared in the first 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: capital expenditures; and the effectiveness of the Fund’s business model. 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 first quarter 2013 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca on Thursday, May 16, 2012 at 8:30 a.m. ET.
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For further information:
President & CEO
Tel: (416) 496-4176
Vice President, Finance & CFO
Tel: (416) 496-4177