Chemtrade Logistics Income Fund Reports strong 2012 first quarter results
TORONTO, May 9, 2012 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months ended March 31, 2012. The first 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 first quarter was $24.3 million, or $0.58 per unit (2011: $24.4 million, or $0.80 per unit), generated from revenue of $227.9 million (2011: $169.6 million). During the first quarter of 2012, distributable cash benefited from maintenance capital expenditures being lower than the anticipated run rate. Maintenance capital expenditures during 2012 are expected to be approximately $35.0 million. Adjusted cash flow from operating activities for the period was $27.5 million (2011: $25.9 million). The primary reason for the increase in revenues was the inclusion of revenues of the acquired businesses. Revenues also benefited from increased volume and higher prices for sulphuric acid compared with the first quarter last year. EBITDA for the first quarter was $34.2 million (2011: $28.6 million) and net earnings were $4.2 million compared with $13.4 million in the same period in 2011. The lower earnings for the first quarter of 2012 resulted primarily from higher levels of depreciation and amortization due to the inclusion of depreciation and amortization on the acquired assets. Additionally, a non-cash loss of $8.6 million resulting from the appreciation in the value of Chemtrade's convertible unsecured subordinated debentures was recorded during the first quarter of 2012. Net finance costs in 2012 were also higher due to the additional debt incurred as a result of the acquisition.
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "All of our businesses performed well during the first quarter. Although the economic environment was uncertain during the quarter, demand from our customer base was stable. The positive results from our expanded operations are even stronger than the year-over-year financial comparisons indicate because of a significant insurance recovery included in last year's results. We have substantially integrated the acquired assets and our expanded business portfolio combined with our focus on operational excellence allowed us to deliver strong results in the first quarter. Another contributing factor was our business model that is based on risk-mitigation. It has served us well in the past through differing economic conditions and will continue to do so going forward."
SPPC generated revenue of $148.1 million and EBITDA of $38.2 million for the first quarter of 2012 compared with $96.6 million and $27.7 million, respectively, in 2011. The main reason for the increase in both was the inclusion of the acquired business. Additionally, higher prices and volume for sulphuric acid had a positive impact. EBITDA for the first quarter of 2011 included an $8.3 million business interruption insurance settlement.
Pulp Chemicals reported first quarter 2012 revenue of $13.1 million compared with $12.5 million in 2011, reflecting higher prices for sodium chlorate. This revenue improvement was more than offset by higher input costs, resulting in EBITDA of $3.2 million which was $0.4 million lower than the level generated during the first quarter of 2011.
International reported revenue of $66.7 million for the first quarter of 2012, compared with $60.5 million in 2011. This reflected higher volumes for sulphuric acid and higher prices for sulphur. EBITDA for the quarter of 2012 was $2.6 million, which was lower than last year when results included some shipments at unusually high margins.
Corporate costs during the first quarter of 2012 were $9.8 million, which was approximately $3.0 million higher than the first quarter of 2011. The main reasons for the increase were higher LTIP expenses and increased costs due to additional corporate activities resulting from the acquisition.
Mr. Davis said, "Looking ahead for the balance of 2012, despite an uncertain economic climate, we expect demand for our products to remain stable. We believe 2012 will be another strong year for Chemtrade and that our current distribution rate is sustainable. We will also continue to focus on improving and expanding our business, including investments to improve the quality and reliability of our physical assets and the development of our people."
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: prices and demand for commodities, products and services; capital expenditures; the effectiveness of the Fund's 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 www.sedar.com.
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