TSX:CHE.DB.E - Post by User
Post by
GregC24on Feb 24, 2023 11:00am
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Post# 35303360
Scotia's Comment
Scotia's CommentLatest Research (February 23, 2023):
OUR TAKE: Positive.
We expect the CHE.un shares to continue performing well near-term, following a small Q4 EBITDA beat ($104M vs. $101M), and slightly better ‘23 guidance (upper-end), both largely due to strength in the EC segment.
Key points:
EC beat by 26% ($78M vs. $62M), due to continued support from chlor-alkali price/margin strength. Supply tightness in the EU (the main feedstock for chlor-alkali is electricity) and elsewhere continues to support global caustic soda and chlorine benchmarks. Increased NA fracking activity and reduced chlorine availability has also helped. MECU netbacks improved by $770/mt y/y, 40% from caustic soda, with the remainder from chlorine and hydrochloric acid.
SWC missed by 3% ($57M vs. $59M), as higher sulphur costs more than offset improved acid (merchand/regen) and water solutions selling prices.
CHE is aiming for an incremental $75M of EBITDAover the next five years from growth projects.
Leverage improved to 2.2x from 4.1x y/y.
‘23 Guide of $360M to $400M is now expected to settle in the upper-end.So, the mid-point of $380M to $400M is $390M, which is 4% ahead of the Street.
North Van sale/leasback suspended for now,due to decline in real estate sector