TORONTO, Feb. 20, 2014 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and year ended December 31, 2013. The financial statements and MD&A will be available on Chemtrade's website at chemtradelogistics.com and on SEDAR at sedar.com.
For the year ended December 31, 2013, distributable cash after maintenance capital expenditures was $75.5 million or $1.81 per unit. The comparable numbers for 2012 were $86.4 million and $2.07 per unit. The decline reflected higher maintenance capital expenditures relative to 2012, increased LTIP accruals, and costs related to the acquisition of General Chemical. Revenue for the year was $836.1 million (2012: $919.4 million). EBITDA was $129.9 million compared with $141.5 million in 2012. Cash flow from operating activities was $107.8 million (2012: $108.3 million). Net earnings for 2013 were $5.5 million, which was lower than the $38.9 million reported in 2012, mainly due to certain non-cash items recorded in 2013. These included higher net finance costs in 2013 as a result of the fair value adjustments on the convertible unsecured debentures, a large unrealized foreign exchange loss in 2013 compared with a gain in 2012 and a write-down of property, plant and equipment. These were partially offset by a higher income tax recovery in 2013.
Chemtrade President and Chief Executive Officer, Mark Davis, said, "Each of our operating segments performed well in 2013 and in the fourth quarter. EBITDA generated by our operating businesses for the year was $175.8 million, which was consistent with $178.8 million generated in 2012, and EBITDA generated by our businesses in the fourth quarter was also similar to the results achieved in 2012."
For the fourth quarter of 2013, revenue was $201.6 million, which was $21.4 million lower than the fourth quarter of 2012, mainly due to lower revenue in the International segment. Aggregate cash flow from operating activities was $29.9 million compared with $39.6 million generated during the fourth quarter of 2012.
Distributable cash after maintenance capital expenditures for the fourth quarter of 2013 was $3.4 million or $0.08 per unit. The comparable numbers for the fourth quarter of 2012 were $13.8 million or $0.33 per unit. The two main reasons for the $0.25 per unit difference in distributable cash were an increase in LTIP costs of $6.9 million, or $0.17 per unit, and costs of $2.9 million, or $0.07 per unit related to merger and acquisition activities that were incurred in fourth quarter. These costs were also reflected in aggregate EBITDA of $21.1 million for the fourth quarter of 2013 compared with $34.7 million in 2012.
In the fourth quarter SPPC generated revenue of $144.3 million compared with $147.0 million in 2012. The main reason for the decrease in revenue was lower prices for sulphur. This was partially offset by higher prices for certain of the segment's other products relative to 2012. EBITDA for the fourth quarter of 2013 was $35.5 million compared with $36.3 million in 2012.
Pulp Chemicals reported fourth quarter revenue of $13.0 million compared with $13.1 million in 2012. The segment generated EBITDA of $2.5 million compared with $3.1 million in 2012. The decline was due to lower production levels of sodium chlorate as well as higher maintenance costs relative to 2012.
International reported revenue of $44.2 million for the fourth quarter, compared with $62.9 million in 2012, reflecting lower prices of sulphur and lower volumes of sulphuric acid due to the generally weak business conditions in international markets. Despite the lower revenue, EBITDA of $3.7 million was virtually unchanged from the $3.8 million reported in 2012.
Corporate costs during the fourth quarter of 2013 were $20.6 million, which was $12.0 million higher than the fourth quarter of 2012. The main reasons for the increase were the higher LTIP accruals and the costs related to merger and acquisition activities.
Mr. Davis said, "It was a good year for Chemtrade, with our operating businesses continuing to perform well. We were also able to effectively deploy our capital plan and further improve the effectiveness of our assets. The highlight of the year was the acquisition of General Chemical and the related $345.0 million equity issue which were announced in December and completed in January 2014. We are now integrating the businesses and are excited about the prospects for the enlarged operations. Each of our acquisitions is dependent on the strength and performance of our businesses so we will continue investing in our assets to optimize efficiency and reliability. We expect demand for most of our products and services to remain stable in 2014 and believe the combination of our diversified customer base, our long-term risk-sharing contracts and strong balance sheet is more than sufficient to sustain our current distribution rate."
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, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite and sodium hydrosulphite. Chemtrade is a leading processor of spent acid as well as a leading regional supplier of sulphur, sodium chlorate, phosphorus pentasulphide, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing hydrogen sulphide and other 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: demand for products and services; investment strategy; 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.
A conference call to review the fourth quarter and full year 2013 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca/en/webcast on Friday, February 21, 2014 at 10:00 a.m. ET.
SOURCE: Chemtrade Logistics Income Fund
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