Chemtrade Logistics Income Fund reports exceptionally strong 2011 third quarter operating results

Marsulex acquisition and favourable market conditions provide boost

TORONTO, Nov. 9, 2011 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and nine months ended September 30, 2011.  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.

The results for the third quarter include the first full quarter of contribution from the acquisition of Marsulex Inc. (Marsulex) that was completed on June 24, 2011.  Revenue in the quarter was $268.5 million compared to $142.6 million in 2010. The main driver of the revenue increase in the quarter was the Sulphur Products & Performance Chemicals (SPPC) segment, which benefitted from the contribution of the former Marsulex assets as well as from higher prices and volume for sulphuric acid. Aggregate cash flow from operating activities for the period was $38.1 million (2010:  $19.2 million).

Distributable cash after maintenance capital expenditures for the third quarter of 2011 was $35.6 million, or $0.85 per unit.  The comparable numbers for third quarter 2010 were $8.7 million or $0.28 per unit. Aggregate EBITDA for the third quarter of 2011 was $45.8 million compared with $19.5 million in 2010.

For the nine months ended September 30, 2011, distributable cash after maintenance capital expenditures was $61.0 million (2010:  $30.0 million), or $1.76 per unit (2010:  $0.98 per unit) generated from revenue of $633.4 million (2010: $406.8 million).  EBITDA was $82.2 million (2010:  $57.2 million).  Cash flow from operating activities was $39.1 million (2010: $53.9 million), and net earnings for the first nine months of 2011 were $56.7 million (2010:  $20.2 million).

Mark Davis, President and Chief Executive Officer of Chemtrade, said, "All of Chemtrade's businesses, including our newly acquired ones, performed well in the third quarter. The strong demand for our products and services in the first half of the year continued into the third quarter. Our SPPC segment was again the main driver of the improved results, with the newly acquired businesses accounting for the majority of the increase. Higher volumes and prices for SPPC's legacy products also contributed to the improvement."

SPPC generated revenue of $163.0 million in the third quarter compared with $83.8 million in 2010. The main reason for the increase in revenue was the inclusion of the Marsulex businesses, but higher prices and volumes for sulphuric acid and sulphur also contributed to the improvement. EBITDA for the third quarter was $43.0 million compared with $17.1 million in 2010.  While the higher EBITDA relative to the third quarter of 2010 was mainly due to the inclusion of the new assets, most products in the segment performed better than last year.  In addition to the positive factors affecting the latest results the third quarter of 2010 was adversely impacted by the Beaumont plant being offline for the entire quarter.

Pulp Chemicals reported third quarter revenue of $12.3 million compared with $13.4 million in 2010, reflecting lower volume of sodium chlorate. EBITDA for the third quarter was $3.2 million compared with $4.0 million in 2010, reflecting the lower volume as well as higher maintenance costs.

International reported revenue of $93.2 million for the third quarter compared with $45.4 million in 2010.  This reflected higher prices for sulphuric acid and sulphur.  EBITDA for the third quarter was $4.8 million, which is higher than normal course business for International, but $2.0 million lower than the exceptionally strong results reported in 2010.

Corporate costs during the third quarter of 2011 were $5.2 million, which was $3.3 million lower than the third quarter of 2010.  The main reason for the decrease was lower long-term incentive plan accruals, which were $5.4 million less than the third quarter in 2010. 

Mr. Davis said, "The integration of the Marsulex businesses is proceeding very smoothly.  We are pleased with the proven contribution and strength the new assets and people have added to Chemtrade. Consistent with our multi-year program, we will continue to invest in our capital and human resources to ensure that our businesses remain strong, continue to improve and remain resilient through differing economic climates.  Demand for our products and services remains stable.  The quality, scope and scale of our business combined with our business model and strong balance sheet, are more than sufficient to continue making investments to improve our business and to sustain our current distribution rate."

Distributions
Distributions declared in the third 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; 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 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 2011 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca/en/webcast on Thursday, November 10, 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

 


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890