TORONTO, August 8, 2013 – Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and six months ended June 30, 2013. The second 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 second quarter was $21.4 million, or $0.51 per unit (2012: $24.0 million, or $0.58 per unit), generated from revenue of $217.5 million (2012: $227.6 million). Adjusted cash flows from operating activities for the period were $30.3 million (2012: $30.3 million). The primary reason for the decrease in revenues was lower revenues in the International segment. EBITDA for the second quarter was $36.0 million compared with $36.8 million in the second quarter of 2012. Net earnings were $10.0 million compared with $8.5 million in the same period in 2012. The increase is primarily due to an income tax recovery in the second quarter of 2013 compared with an income tax expense for the same period of 2012, partially offset by higher levels of depreciation and amortization in the second quarter of 2013 relative to the second quarter of 2012.
For the six months ended June 30, 2013, distributable cash after maintenance capital expenditures was $48.4 million (2012: $48.3 million), or $1.16 per unit (2012: $1.16 per unit) generated from revenue of $427.6 million (2012: $455.5 million). EBITDA was $71.2 million (2012: $71.0 million). Adjusted cash flow from operating activities was $59.9 million (2012: $57.7 million), and net earnings for the first six months of 2013 were $14.3 million (2012: $12.7 million).
Mark Davis, President and Chief Executive Officer of Chemtrade, said, “Our businesses performed well in 2013 and we achieved solid results for the first half of 2013. North American sales volumes for most of our products in 2013 have been higher than 2012. In particular, we are encouraged by demand in North America for our largest product by volume, sulphuric acid. Sulphuric acid is considered to be the most widely used chemical in the world and often regarded as a good indicator of economic activity. On a year-to-date basis, we have realized higher sales volumes for acid in 2013 relative to 2012.”
SPPC generated revenue of $155.3 million and EBITDA of $37.6 million compared with $153.1 million and $39.2 million, respectively, in 2012. The main reason for the increased revenue was higher volumes for several products within the segment relative to 2012. EBITDA declined mainly due to lower sales prices and margins for sulphuric acid. EBITDA was also negatively affected by lower demand for regen services due to operating issues at some refinery customers.
Pulp Chemicals reported second quarter revenue of $13.3 million compared with $11.4 million in 2012, when results were adversely affected by a key customer’s operating issues. EBITDA was $2.7 million which was $0.7 million higher than the level generated during the second quarter of 2012.
International reported revenue of $49.0 million for the second quarter, compared with $63.1 million in 2012. This reduction in revenue reflected lower volumes and lower prices for sulphur caused by the generally weak conditions in international markets. However, EBITDA for the quarter was $2.7 million, which was only slightly lower than the $2.8 million last year.
Corporate costs during the second quarter of 2013 were $6.9 million, which was slightly lower than the second quarter of 2012. LTIP expenses were $1.1 million lower than the second quarter of 2012.
Mr. Davis said, “The effectiveness of Chemtrade’s business model has enabled us to deliver consistent results over time despite differing economic conditions. This stability of earnings makes it possible to invest and focus on long-term initiatives improving operational excellence and supply reliability. We remain confident in our ability to meet our objectives of providing both yield and growth to our unitholders.”
Distributions declared in the second 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 second quarter 2013 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca on Friday, August 9, 2013 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