Chemtrade Logistics Income 6 50 Convertible Unsecured Subordinated Debentures CGIFF

Scotia comments

[incomedreamer11]

Textbook Q3 Beat/Raise; But Street Still Calling for a Q4 Miss; '24 Could Be Softer Than '23

OUR TAKE: Mixed. CHE posted a well-rounded Q3 beat ($142M vs. $111M), and increased its ‘23 guide to >$490M. This implies >$72M for Q4 vs. the Street already at $90M (we recently noted how a pull forward of EBITDA could disappoint at the end of the year). The tone of the call could be a little downbeat, with ‘24 EBITDA unlikely to beat or match ‘23, while CHE’s core verticals (caustic soda and merchant acid) soften.

• EC EBITDA beat by 33% ($84M vs. $63M), with higher selling prices for chlorate, chlorine, and HCl continuing to offset lower caustic prices, as well as reduced sodium chlorate volume. MECU netbacks are now expected to be $90/MECU higher y/y vs. CHE’s previous assumption of $60 lower.
• SWC EBITDA beat by 16% ($84M vs. $72M), with regen acid strength (price + volume) and higher selling prices of water solutions products more than offsetting weakness in merchant acid (price + volume). Given lower raws for water solutions, it’s possible we see margins weaken in ‘24 vs. Q3.
• LTM payout of 22%. If sub-40% is sustainable, how long will it be until investors push for a distribution increase? Recall, the distribution was halved when COVID started – March ‘20.
• Leverage improved to 1.7x, from 1.8x q/q.
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[JosephM1]

Think that was Scotia's take last quarter, this analist seems to not be on the ball.!

[bttmfischer]

I saw nothing Iin the report could get exited about. Hopefully the distribution is safe for the near future. BTW, it was scotia to talk me int buying CHE, when they thoght the sun was rose and set on the "brilliant" management of that company. I bought some(sorry to say over 10k), north of $14/ unit. Hope to say I live long enough to brake even, but the odds are against it, I fear.

[JosephM1]

sounds like they  are as bitter as you are. LOL. Distirbution safe,  at 22 percent payout ratio, how is it at risk. LOL

[bttmfischer]

Not bitter Jpseph, only realistic. I could have sold them and deduct the loss from capital gains, but kept them as a reminder of the unreliable recommendations of analysts in general..

[JosephM1]

but you did not answer the question about the distirubtion safety?

[biketrader98]

Market sees differently.   Not sure I would talk down my losing investment especially with misinformation like an at risk distribution when it's covered nearly 5x.