TORONTO, Nov. 13, 2013 /CNW/ - Chemtrade Logistics Income Fund (TSX:
CHE.UN) today announced results for the three months and nine months
ended September 30, 2013. The third quarter financial statements and
MD&A will be available on Chemtrade's website at www.chemtradelogistics.com and on SEDAR at www.sedar.com.
Distributable cash after maintenance capital expenditures for the third
quarter was $23.7 million, or $0.57 per unit (2012: $24.3 million, or
$0.58 per unit), generated from revenue of $206.9 million (2012: $240.9
million). Adjusted cash flows from operating activities for the period
were $32.0 million (2012: $29.9 million). The primary reason for the
decrease in revenues was lower revenues in the International segment.
EBITDA for the third quarter was $37.5 million compared with $35.8
million in the third quarter of 2012. Net earnings were $20.4 million
compared with $10.6 million in the same period in 2012. The increase in
net earnings is primarily due to fair value adjustments on the
convertible unsecured subordinated debentures and an income tax
recovery.
For the nine months ended September 30, 2013, distributable cash after
maintenance capital expenditures was $72.1 million (2012: $72.5
million), or $1.73 per unit (2012: $1.74 per unit) generated from
revenue of $634.5 million (2012: $696.3 million). EBITDA was $108.8
million (2012: $106.8 million). Adjusted cash flow from operating
activities was $91.9 million (2012: $87.6 million), and net earnings
for the first nine months of 2013 were $34.7 million (2012: $23.3
million).
Mark Davis, President and Chief Executive Officer of Chemtrade, said,
"In the third quarter, our North American businesses generated earnings
that were similar to the same period in 2012. Revenue was lower than
last year, due to a combination of lower volumes of sulphur and of
sulphuric acid and lower prices, particularly for sulphur. This
weakness was partially offset by higher prices of other products in our
SPPC group. Despite lower revenue, our risk-sharing business model and
diversity of our portfolio enabled us to maintain consistent results
for our North American operations. Although North American acid prices
are moderately lower than last year, our customers' demand for product
supports our belief that economic activity in North America remains
firm."
SPPC generated revenue of $151.5 million and EBITDA of $41.2 million
compared with $158.1 million and $41.5 million, respectively, in 2012.
The main reasons for the decrease in revenue were lower volumes of
sulphur and sulphuric acid and lower prices of sulphur. This was
partially offset by higher prices for certain other products within the
segment relative to 2012. Despite the decrease in revenue, EBITDA was
steady with last year.
Pulp Chemicals reported third quarter revenue of $12.0 million compared
with $13.4 million in 2012 and EBITDA of $2.7 million compared with
$3.0 million last year. This was due to lower sales volumes of sodium
chlorate.
International reported revenue of $43.4 million for the third quarter,
compared with $69.3 million in 2012. This reduction in revenue
reflected lower prices and volumes of sulphur and sulphuric acid caused
by the generally weak conditions in international markets. EBITDA for
the quarter was $1.9 million, compared with $3.0 million last year.
Excluding unrealized foreign exchange gains and losses, Corporate costs
during the third quarter of 2013 were $8.3 million, which was $3.4
million lower than the third quarter of 2012. LTIP expenses for the
third quarter were $2.9 million lower than the third quarter of 2012.
Mr. Davis said, "Our plants operated well during the quarter and we
continue to make the investments necessary for the long-term
reliability of our operations. We remain confident in our ability to
meet our objectives of providing both yield and growth to our
unitholders."
Distributions
Distributions declared in the third quarter totalled $0.30 per unit,
comprised of monthly distributions of $0.10 per unit.
Potential Acquisition Discussions
Chemtrade confirms that it is in discussions with American Securities
LLC regarding a potential acquisition of General Chemical Corp. While
discussions are ongoing, no assurance can be given that a transaction
will be completed or if completed, as to the terms or conditions which
might apply to any such transaction.
Mr. Davis said, "Chemtrade has a history of growing by acquisition. We
have successfully acquired and integrated a number of businesses, but
have backed away from many others. In evaluating transactions, we
consider accretion to our unitholders, sustainability of earnings and
the maintenance of our balance sheet strength."
Chemtrade does not intend to make further comment unless or until there
is a transaction to announce.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking statements within the meaning of certain securities
laws, including the Securities Act (Ontario). Forward-looking
statements can be generally identified by the use of words such as
"anticipate", "continue", "estimate", "expect", "expected", "intend",
"may", "will", "project", "plan", "should", "believe" and similar
expressions. Specifically, forward-looking statements in this news
release include statements respecting certain future expectations
about: capital expenditures; the effectiveness of the Fund's business
model; the Fund's ability to grow and provide yield to unitholders; the
level of North American economic activity; and the possibility of a
transaction, its terms and any announcement regarding a transaction.
Forward-looking statements in this news release describe the
expectations of the Fund and its subsidiaries as of the date hereof.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking statements
for a variety of reasons, including without limitation the risks and
uncertainties detailed under the "RISK FACTORS" section of the Fund's
latest Annual Information Form and the "RISKS AND UNCERTAINTIES"
section of the Fund's most recent Management's Discussion & Analysis.
Although the Fund believes the expectations reflected in these
forward-looking statements and the assumptions upon which they are
based are reasonable, no assurance can be given that actual results
will be consistent with such forward-looking statements, and they
should not be unduly relied upon. With respect to the forward-looking
statements contained in this news release, the Fund has made
assumptions regarding: there being no significant disruptions affecting
the operations of the Fund and its subsidiaries, whether due to labour
disruptions, supply disruptions, power disruptions, transportation
disruptions, damage to equipment or otherwise; the ability of the Fund
to obtain products, raw materials, equipment, transportation, services
and supplies in a timely manner to carry out its activities and at
prices consistent with current levels or in line with the Fund's
expectations; the timely receipt of required regulatory approvals; the
cost of regulatory and environmental compliance being consistent with
current levels or in line with the Fund's expectations; the ability of
the Fund to successfully access tax losses and tax attributes; the
ability of the Fund to obtain financing on acceptable terms; currency,
exchange and interest rates being consistent with current levels or in
line with the Fund's expectations; and global economic performance.
The Fund disclaims any intention or obligation to update any
forward-looking statement even if new information becomes available, as
a result of future events or for any other reason. The forward-looking
statements contained herein are expressly qualified in their entirety
by this cautionary statement.
Further information can be found in the disclosure documents filed by
Chemtrade Logistics Income Fund with the securities regulatory
authorities, available at www.sedar.com.
A conference call to review the third quarter 2013 results will be
webcast live on www.chemtradelogistics.com and www.newswire.ca on Thursday, November 14, 2013 at 10:00 a.m. ET.
SOURCE Chemtrade Logistics Income Fund
