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

Primary Symbol: T.CHE.DB.E Alternate Symbol(s): T.CHE.DB.G | CGIFF | T.CHE.DB.H | T.CHE.UN

Chemicals Basic Materials

Chemtrade Logistics Income Fund is a Canada-based company that operates a diversified business providing industrial chemicals and services to customers in North America and around the world. The Company's segments include Sulphur and Water Chemicals (SWC), and Electrochemicals (EC). SWC segment markets, removes and/or produces merchant, Regen and sulphuric acid, sodium hydrosulphite, elemental sulphur, liquid sulphur dioxide, hydrogen sulphide, sodium bisulphite, and sulphides, and provides other processing services. This segment also manufactures and markets a variety of inorganic coagulants used in water treatment, including aluminum sulphate, and a number of specialty chemicals, including sodium nitrite. EC segment manufactures and markets sodium chlorate and chlor-alkali products including caustic soda, chlorine and HCl, largely for the pulp and paper, oil and gas and water treatment industries. These products are marketed primarily to North American and South American customers.

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Chemtrade Logistics Income 6 50 Convertible Unsecured Subordinated Debentures

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Post by incomedreamer11on Nov 08, 2022 8:52am

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Post# 35081412

Scotia comments on result

mpressive Q3 Beat on Chlor-Alkali; Q4 Should Beat Too

OUR TAKE: Positive. We expect a positive reaction from a >35% Q3 EBITDA beat, which is pretty rare for chemical companies in this market. In fact, we also think Q4 will beat, with the Street at $84M and EBITDA likely to settle close to $100M. One of the reasons why we upgraded CHE to Sector Outperform earlier in the year was due to its businesses being more defensive than many of its peers. While this has been playing out as expected, a chlor-alkali tailwind is what really led to the spectacular results.

Guidance for ‘22 improved by 15% to $420M to $430M vs. $360M to $380M, previously.
EC beat by 42% ($88M vs. $62M) due to higher chlor-alkali prices across the board. Asian caustic soda was supported by EU supply tightness on the back of a higher global energy complex. Increased fracking activity and a reduced chlorine supply also helped. This led to an increase of ~$980 in MECU netbacks
SWC beat by 16% ($69M vs. $60M) led by higher selling prices of merchant acid, water solutions products and regen acid. The segment also saw higher sales volume of merchant acid and water solutions products.
Leverage improved to 2.4x from 6.0x y/y.
Distribution payout ratio of 32% on LTM basis, or 20% on Q3 results.