Chemtrade Logistics Income Fund Reports 2015 First Quarter Results

TORONTO, May 14, 2015 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months ended March 31, 2015.  The first quarter financial statements and MD&A will be available on Chemtrade's website at chemtradelogistics.com and on SEDAR at sedar.com.

Revenue in the first quarter of 2015 was $326.0 million compared with $266.1 million in the first quarter of 2014.  The primary reasons for the revenue increase were the additional month of revenues from the recently acquired General Chemical business and the positive impact of the stronger US dollar on US dollar denominated revenues.  Adjusted cash flows from operating activities for the first quarter were $45.4 million (2014:  $18.0 million).  

Distributable cash after maintenance capital expenditures for the first quarter was $41.7 million, or $0.61 per unit (2014:  $14.3 million, or $0.26 per unit).  During the first quarter of 2015 and the comparable period of 2014, distributable cash benefited from maintenance capital expenditures being lower than the respective anticipated annual run rates.  Maintenance capital expenditures during 2015 are expected to be approximately $50.0 million. 

Adjusted EBITDA for the first quarter was $58.1 million compared with $23.8 million in the first quarter of 2014.   

Net loss from continuing operations for the first quarter of 2015 was $9.0 million compared with $23.0 million in the same period in 2014.  The improvement is partially due to higher net finance costs in 2014 due to the fair value adjustments on the convertible unsecured subordinated debentures and the write-down of previously deferred financing costs related to the former credit facilities that were repaid in the first quarter of 2014.  The higher Adjusted EBITDA and lower net finance costs in 2015 were partially offset by higher levels of depreciation and amortization in the first quarter of 2015 relative to the same period of 2014.

Mark Davis, President and Chief Executive Officer of Chemtrade, said, "Chemtrade had a strong start to the year.  The first quarter results reflect the full quarter contribution of the General Chemical business that was acquired in late January 2014.  Additionally, we benefited from the strong US dollar and from strength in sulphuric acid."

The Sulphur Products and Performance Chemicals segment generated revenue of $160.8 million and Adjusted EBITDA of $40.4 million compared with $137.8 million and $30.6 million, respectively, in 2014.  The main reason for the increased revenue was the inclusion of the General Chemical business for the full quarter.  The higher revenue also reflects the positive impact of foreign exchange of approximately $3.6 million due to the stronger US dollar.

The Water Solutions and Specialty Chemicals segment reported first quarter revenue of $108.3 million compared with $87.8 million in 2014.  EBITDA was $29.2 million compared with $24.9 million in 2014.  The higher revenue and EBITDA generated in this segment is primarily due to the inclusion of results for the acquired business for the full three months compared with only two last year and the impact of the stronger US dollar.   

The International segment reported revenue of $57.0 million for the first quarter, compared with $40.5 million in the first quarter of last year.  EBITDA for the quarter was $4.8 million, compared with $3.4 million last year.  The higher level of revenue and EBITDA reflects the impact of the stronger US dollar as well as higher volumes and prices of sulphuric acid in international markets.   

Corporate costs during the first quarter of 2015 were $16.3 million, which was $18.8 million lower than the first quarter of 2014.  The primary reasons for the lower costs are $17.7 million of acquisition costs and associated foreign exchange losses incurred in the first quarter last year.  Additionally, accruals for Chemtrade's long term incentive plans were $3.7 million lower than the first quarter of 2014. 

Mr. Davis said, "Our businesses are all performing well and we are very pleased with the integration of the General Chemical business and the potential for additional organic growth that is emerging.  Business conditions continued to be stable during the quarter and demand for most of our products remains consistent.  We remain confident that successful execution of our strategy will enable us to continue providing our unitholders with the growth and yield they have come to expect."

Distributions

Distributions declared in the first quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.

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:  the demand for our products; the effectiveness of our business model; and the sustainability of the Fund's distributions.  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 sedar.com.

A conference call to review the first quarter 2015 results will be webcast live on chemtradelogistics.com and newswire.ca on Friday, May 15, 2015 at 8:30 a.m. ET.

SOURCE Chemtrade Logistics Income Fund