TORONTO, Feb. 18, 2016 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and year ended December 31, 2015. The financial statements and MD&A will be available on Chemtrade's website at chemtradelogistics.com and on SEDAR at sedar.com.
The results for 2015 include the full year's contribution from the General Chemical business that was acquired at the end of January 2014. Comparative results for 2014 include these results for 11 months.
Consolidated revenue for the year ended December 31, 2015 was $1.4 billion compared with $1.2 billion in 2014. The increase was due primarily to the positive impact of the stronger U.S. dollar on U.S. dollar denominated revenues in 2015. The increase was also due to the inclusion of 12 months of results from the General Chemical business in 2015 compared with 11 months in 2014.
For the year ended December 31, 2015, distributable cash after maintenance capital expenditures was $135.7 million or $1.97 per unit. The comparable numbers for 2014 were $126.6 million and $2.10 per unit. The 2014 distributable cash amount included $18.6 million ($0.31 per unit) related to the Montreal East business that was sold in July 2014. Excluding this, distributable cash from ongoing operations increased by $27.7 million, which was primarily due to the positive impact of the stronger U.S. dollar in 2015 and the extra month of earnings from the General Chemical acquisition.
Adjusted EBITDA in 2015 was $237.0 million compared with $202.2 million in 2014. Adjusted cash flow from operating activities was $188.1 million (2014: $170.6 million). Net loss for 2015 was $47.6 million, which was $26.8 million higher than the $20.8 million net loss from continuing operations reported in 2014. Net earnings for 2015 were negatively affected by a non-cash goodwill impairment charge of $88.7 million described below.
Chemtrade President and Chief Executive Officer, Mark Davis, said, "Overall, our businesses performed well in 2015. Our $237.0 million Adjusted EBITDA is the highest ever generated by Chemtrade. Our Sulphur Products & Performance Chemicals (SPPC) segment produced strong results from regenerated sulphuric acid and ultra pure acid, more than offsetting some weakness experienced by certain other products. In Water Solutions & Specialty Chemicals (WSSC), despite some competitive pressures in our water treatment chemicals, our other products in this segment performed better than last year.
"The strategy of adding size, scale and diversity of earnings within our risk-shared business model continues to enable Chemtrade to deliver consistent operating and financial results."
For the fourth quarter of 2015, revenue was $335.7 million, which was $22.4 million higher than the fourth quarter of 2014, mainly due to the positive impact of the stronger U.S. dollar on U.S. dollar denominated revenues. Aggregate cash flow from operating activities was $69.0 million compared with $50.1 million generated during the fourth quarter of 2014.
Distributable cash after maintenance capital expenditures for the fourth quarter of 2015 was $10.1 million or $0.15 per unit. The comparable numbers for the fourth quarter of 2014 were $24.4 million or $0.38 per unit. The primary reason for the decrease in distributable cash was the high maintenance capital expenditure in the fourth quarter of $28.0 million, which was more than half of the total maintenance capital expenditure in 2015.
In the fourth quarter, SPPC generated revenue of $158.7 million and Adjusted EBITDA of $33.2 million compared with $154.9 million and $35.1 million, respectively, in 2014. The main reason for the increased revenue was the positive impact of the stronger U.S. dollar in the fourth quarter of 2015. This positive impact was approximately $3.8 million on Adjusted EBITDA. This benefit was more than offset by a long plant turnaround at a large sulphuric acid regen customer, which resulted in a lower volume of acid being produced and sold.
WSSC reported fourth quarter revenue of $118.8 million compared with $101.3 million in 2014 and Adjusted EBITDA of $27.4 million compared with $26.8 million in 2014. As a result of erosion of margins for some water treatment products, a non-cash goodwill impairment of $88.7 million was recorded during the fourth quarter of 2015. Pursuant to accounting rules, the assessment of goodwill is done at the product level and therefore, new plant initiatives and benefits which arose from the acquisition of General Chemical are not taken into account.
International reported revenue of $58.2 million for the fourth quarter, compared with $57.1 million in 2014. This increase in revenue was primarily due to the positive impact of the stronger U.S. dollar. Adjusted EBITDA for the quarter was $4.6 million, which was the same as the fourth quarter of 2014.
Corporate costs during the fourth quarter of 2015 were $13.5 million, which was $8.5 million higher than the fourth quarter of 2014. The increase was mainly due to $10.2 million of settlement gains on changes made to certain post-employment benefit plans that were recorded in 2014.
Mr. Davis said, "Demand for most of our products was stable during 2015 and we expect this to continue in 2016. We will continue seeking to add size, scale and diversity of earnings to our business consistent with our business model. We are actively executing on the organic growth initiatives previously described in our water treatment and adjuvants businesses and are exploring other organic opportunities. Operationally, we will continue investing in our people and our assets to ensure Chemtrade's ability to deliver long-term sustainable earnings."
Distributions declared in the fourth quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, sodium chlorate, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
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; our intention to add size, scale and diversity of earnings, to execute on organic growth initiatives and opportunities and to invest in our people and assets; and our ability to deliver long-term sustainable earnings. 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 fourth quarter and full year 2015 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca on Friday, February 19, 2016 at 10:00 a.m. ET.
SOURCE Chemtrade Logistics Income Fund
For further information: Mark Davis, President and CEO, Tel: (416) 496-4176; Rohit Bhardwaj, Vice-President, Finance and CFO, Tel: (416) 496-4177