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
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
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 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 |