Chemtrade Provides Update on COVID-19 Response
TORONTO, April 2, 2020 – Chemtrade Logistics Income Fund (TSX: CHE.UN) announced today that its operations, which are considered essential under US State and Canadian Provincial orders issued to date, were not significantly affected by COVID-19 in the first quarter. However, because of the general economic uncertainty resulting from the COVID-19 pandemic, Chemtrade has suspended its 2020 Earnings Guidance.
“Our first priority is to protect the health and safety of our employees. Over the last weeks we have taken many precautionary measures, including reducing the number of people on our sites. Accordingly, we are postponing major plant turnarounds, such as the planned second quarter turnaround at our North Vancouver chlor-alkali facility, until later in the year,” Mark Davis, President & CEO, said. “The global economy has become increasingly uncertain, with reduced visibility into the future. As a result, we proactively reduced our monthly distribution rate and took other steps to ensure financial flexibility during this time. We also indicated that the assumptions underlying our guidance were at risk based on the duration of this uncertainty. It has become apparent that this uncertainty will continue for some time. Accordingly, it is now prudent to suspend our previously issued 2020 Guidance.”
Mr. Davis continued, “As noted, our first quarter operations were not materially affected by COVID-19. While we expect demand for many of our products to be unaffected by the virus (for example, our water treatment chemicals sold to municipalities), other segments are likely to experience decreased demand, at least in the second quarter (for example, the regen services we provide to oil refineries). The recent decline in the value of the Canadian dollar relative to the US dollar is, however, materially beneficial to our Guidance assumption.”
Chemtrade maintains ample liquidity. As of today, Chemtrade’s liquidity position includes approximately US$40 million of cash plus US$160 million of undrawn credit under its committed revolving credit facility. The Company does not have any debt maturities in the next twelve months.
Mr. Davis added, “As conditions stabilize and there is more clarity about the general impact on business activity or specific impact on our businesses, we will provide further updates.”
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America’s largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
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: the duration of the effects of the COVID-19 pandemic; the effect of COVID-19 pandemic on Chemtrade’s products, including its water treatment chemicals and regen services; and the effect of foreign exchange on its revenues. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements are based on assumptions and 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 the value of the Canadian dollar relative to the US dollar and its effect on Chemtrade’s revenues
Except as required by law, the Fund does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
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For further information:
President & CEO
Tel: (416) 496-4176
Vice President, Finance & CFO
Tel: (416) 496-4177