TORONTO, May 30, 2011 /CNW/ - Chemtrade Logistics Income Fund (TSX:
CHE.UN) today announced results for the three months ended March 31,
2011. Distributable cash after maintenance capital expenditures,
EBITDA (earnings before interest, income taxes, depreciation and
amortization) and net earnings were all higher than in the first
quarter last year. 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 $24.4 million, or $0.80 per unit (2010: $12.5 million, or
$0.41 per unit), generated from revenue of $169.6 million (2010:
$126.8 million). Cash flow from operating activities for the period
was $22.1 million (2010: $29.5 million). The revenue increase in the
quarter reflects the improved business conditions over last year and
higher prices for sulphuric acid in Sulphur Products & Performance
Chemicals (SPPC) and International segments, as well as higher volumes
of sulphuric acid in SPPC. EBITDA for the first quarter was $28.6
million (2010: $22.1 million) and net earnings were $13.4 million
compared with $10.5 million in the same period in 2010. In addition to
strong operating results, the higher earnings also include an insurance
recovery of $8.3 million relating to the business interruption claim
arising out of the fire at the Beaumont plant in May 2010.
Mark Davis, President and Chief Executive Officer of Chemtrade, said,
"Chemtrade's businesses performed well in the first quarter. Demand
levels for our products continue to be firm with increased pricing
enhancing our returns. We continue to be well-positioned to benefit
from the improved market conditions."
SPPC generated revenue of $96.6 million in the first quarter compared
with $73.5 million in 2010. The main reasons for the increase in
revenue were higher prices and volume for sulphuric acid and sulphur.
EBITDA for the first quarter was $27.7 million compared with $16.5
million in the first quarter of 2010. The higher EBITDA relative to the
first quarter last year was due primarily to the $8.3 million business
interruption insurance settlement. SPPC also benefited from generally
improved conditions for all products and lower operating costs.
Pulp Chemicals reported first quarter revenue of $12.5 million compared
with $10.9 million in 2010, reflecting higher volumes of sodium
chlorate. This revenue improvement was offset by higher electricity and
maintenance costs, resulting in EBITDA of $3.6 million compared with
$4.8 million in 2010.
International reported revenue of $60.5 million for the first quarter,
compared with $42.4 million in 2010. This reflected higher prices for
sulphuric acid and sulphur. EBITDA for the quarter was a very solid
$4.1 million. This EBITDA was, however, significantly lower than the
$10.3 million reported last year, which was the result of unique
circumstances in the first quarter of 2010.
Corporate costs during the first quarter of 2011 were $6.9 million,
which was $2.7 million lower than the first quarter of 2010. The main
reason for the decrease was LTIP accruals being $3.4 million lower than
the first quarter of 2010. Additionally, during the first quarter of
2011 expenditures of approximately $1.0 million were incurred on
acquisition related activities compared with $0.8 million last year.
Net finance costs were $2.4 million lower than in 2010, which included
costs associated with the issuance of the convertible unsecured
International Financial Reporting Standards (IFRS)
The first quarter of 2011 is the first quarter that Chemtrade has
reported its financial results in accordance with IFRS.
Since the transition date to IFRS was January 1, 2010, for comparative
purposes, 2010 financial results have been restated to conform with
Marsulex Acquisition and Equity Offering
On May 5, 2011, Chemtrade announced that it had entered into a
definitive arrangement agreement with Marsulex Inc. (TSX: MLX)
(Marsulex) to purchase all of the businesses of Marsulex, other than
Marsulex Environmental Technologies Corporation for an aggregate
transaction value of $419.5 million to be funded by a bought deal
equity offering of subscription receipts and syndicated secured credit
facilities. On May 26, 2011 Chemtrade announced it had completed an
issuance of 10.99 million subscription receipts, including the exercise
in full of the underwriters' over-allotment option, for gross proceeds
of $149.5 million. Marsulex will hold a special meeting of shareholders
on June 22, 2011. The transaction requires the approval of two-thirds
of the votes cast at the meeting. If approved, Chemtrade expects the
final closing to take place by the end of June.
Mr. Davis said, "The Marsulex businesses are highly complementary to
Chemtrade's existing businesses. Further, they extend our business
model of mitigating typical commodity risks through risk-shared
contracts. The transaction will generate value for all of our
Distributions declared in the first quarter totalled $0.30 per unit,
comprised of monthly distributions of $0.10 per unit.
This news release contains certain statements which may constitute
"forward-looking" statements within the meaning of certain securities
laws, including the "safe harbour" provisions of the Securities Act (Ontario). The use of any of the words "anticipate", "continue",
"estimate", "expect", "expected", "intend", "may", "will", "project",
"plan", "should", "believe" and similar expressions are intended to
identify forward-looking statements. These statements are based on a
number of material factors and assumptions and involve known and
unknown risks and uncertainties that may cause actual results or events
to differ materially from those anticipated in such forward-looking
statements. As a result, we cannot guarantee that any forward-looking
statement will materialize. Forward-looking statements in this news
release describe the expectations of Chemtrade as of the date of this
news release. Forward-looking statements do not take into account the
effect that transactions or non-recurring items announced or occurring
after the statements are made may have on our business. We disclaim 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.
This news release contains forward-looking statements about the
objectives, strategies, financial condition, results of operations and
businesses of Chemtrade, including, but not limited to:
- the ability of Chemtrade to close the Marsulex acquisition transaction
and the date thereof; and
- the ability of the Marsulex acquisition transaction to generate value
for Chemtrade stakeholders.
Financial outlook information contained in this news release about
prospective results of operations, financial position or cash flows is
based on assumptions about future events, including economic conditions
and proposed courses of action, based on management's assessment of the
relevant information currently available. Readers are cautioned that
such financial outlook information contained in this news release
should not be used for purposes other than those for which it is
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 first quarter 2011 results will be
webcast live on www.chemtradelogistics.com and www.newswire.ca/en/webcast on Tuesday, May 31, 2011 at 10:00 a.m. ET.
SOURCE Chemtrade Logistics Income Fund
For further information:
| Mark Davis || || Rohit Bhardwaj |
| President and CEO || || Vice-President, Finance and CFO |
| Tel: (416) 496-4176 || || Tel: (416) 496-4177 |