TSX:CHE.DB.E - Post by User
Post by
incomedreamer11on May 11, 2021 11:31am
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Post# 33173651
first comments from Scotia
first comments from ScotiaOUR TAKE: Negative vs. the Street.
While the stock should underperform near-term on the meaningful EBITDA miss, investor sentiment is beginning to turn more positive as early signs of eventual green shoots are emerging for Chemtrade.
EBITDA of $55M fell 16% short of the Street's $66M, largely due to the impact of COVID on SPPC, as well as the winter storm on the WSSC segment. Full note to follow the 8:30am call.
POSITIVE SURPRISES • None.
NEGATIVE SURPRISES • SPPC. Travel restrictions continue to curb gasoline demand, and therefore regen acid. Reduced economic activity resulted in poor demand for merchant acid. •
WSSC. Severe winter weather disrupted operations and CHE.un customers. The outlook for the segment warned of near-term margin compression, as it takes time to pass on higher raws to customers. •
EC. Lower sales volume of sodium chlorate, 14% decline in the price of caustic, and a 30% drop in the price of HCl. • $3M negative impact from Winter Storm Uri + another $3M negative impact from a strengthening C$.
Also, corporate costs were $22M vs. $12M y/y, largely due to LTIPs + the retirement of the former CEO.