Chemtrade Logistics Income 6 50 Convertible Unsecured Subordinated Debentures T.CHE.DB.E

Scotia's Comment

[GregC24]

Latest Research (May 10, 2023):OUR TAKE: Positive. We expect CHE to outperform near-term, following a substantial 30% Q1 EBITDA beat ($132M vs. $102M), and a meaningful bump to the ‘23 guide, which accounts for more than just the Q1 results. The beat was due to: (1) an unprecedented recovery in sodium chlorate ASPs; (2) improved water solutions margins; and (3) continued strength in chlor-alkali fundamentals.

Key points: ‘23 guide raised to >$430M from $360M to $400M, and compared to the Street/Scotia at $390M/$387M. If add Q1 actuals to the Street’s estimates, the Street is still coming up short at $418M. Therefore, watch for Q2-Q4 estimates to rise too.
EC beat by 28% ($100M vs. $64M), reflecting continued support from chlor-alkali margin. Robust fundamentals continue on the back of EU-based supply tightness (electricity is the main feedstock for chloralkali). MECU netbacks improved by $550/mt y/y – 60% from chlorine and HCl, 20% from FX, and the remainder from caustic soda.
SWC missed by 6% ($55M vs. $59M), as lower sulphur prices and lower Regen volume more than offset higher pricing. Regen acid demand was low due to a planned turnaround at a major customer.
Leverage unchanged at 2.2x; LTM payout ratio of 28%.

[Aurum1983]

upgrade coming with TP increase. We will be $10 before the next ER. Maybe even a divy increase, who knows. I am a simply man. I buy when I see 7% yield, payout ratio of 20%, strong balance sheet, growing business outlook and recession-proof products.

[Aurum1983]

Divy increase is a real possibilty with the ultrapure project put on hold, increased forecast and payout ratio of 20%.  Would SP go back to $20 as it was in 2018? 

[Kherson]

Chemtrade does not pay a dividend on it's trust units! Let that sink in. Kherson

[bigo24]

I don't care what you call it but  50$ goes in my acct every month  from the 100 shs I bought

[bttmfischer]

You are correct. It is callad cash distribution, on which you get no diviend tax credit. Although Stockhouse does call it a dividend. As they say, the devil is always in the details.

[CanSiamCyp]

Aurum: The problem would be ... as per the wise old saying ... "fool me once shame on you ... fool me twice shame on me!". Investors need time to forget .... like many, many years ... about a catastrophic distribution cut which triggered a major unit price decline. So there is that to consider! GLTA!

[raybay_98]

Correction, 'Investors Do Not forget'. Replacing the present BOD would be good first step in getting the investors to forget but that appears to be unlikely hence CHE is a buy for suckers only. JMHO

[Aurum1983]

The market is forward looking. The market does not hold grudges. I just look at the facts. Forecast has been revised upward twice. Payout ratio of 20% and lower now with the JV project put on hold (great news). Low energy costs. Excellent relations with customers. Strong buy from all analysts. Dividend/cash distribution of ~7% and poised to increase. STRONG BUY from all analysts. You guys are so

[CanSiamCyp]

You assume so much .... you know that others are bitter etc. .... we have over $300k in CHE.un .... so would be VERY happy if the payout is increased. Unlike you however I recognize why investors are suspicious. Use your brain!

[Aurum1983]

You are letting emotions get the best of you. You are "once bitten twice shy" and not using your brain to tell a rope from a snake. Again I am looking at the facts and current outlook. I like the current valuation and the forecast. I have never lost money with chemtrade. Got in post-covid and been trading in and out while holding a core position. It's a long term hold for me. If

[CanSiamCyp]

CHE.un is a long term hold for me as well ... have been in since 2017 ... so there is that. I never sold after the distribution cut ... or during the pandemic hysteria of 2020 ... but added units to reduce the ACB of our position and increase the annual distribution received. You must be confusing me with someone else ... I never posted terms like suckers, POS, etc. on this bulletin board

[raybay_98]

He cann't use what he doesn't have!

[bttmfischer]

Well CSP, it was Scotia that put me into Chemtrade or so  decade ago. Some cost unit, me over $20/per unit, but the distribution was over 11 percent for a while. All-in-all I am not in the "give praise" mode. Right now I am trying to find out about the safety of the cash distribution for the next 2-3 years. If CHE can maintain it(IF, IF, IF) the units may make it back to $10.50-$11

[CanSiamCyp]

Hey BTM! I think CHE is a different entity now ... have left that troublesome legal problem in the rear view mirror ... forward looking with new management and the ultra pure acid initiative (supplying domestic chip production) ... and a stable and growing income stream that is allowing them to pay down debt. So far so good! I doubt that they will ever rush to increase the distribution ... and I