Results Show Significant Contribution of General Chemical Acquisition
TORONTO, Feb. 19, 2015 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and year ended December 31, 2014. 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 the fourth quarter and full year include the contribution from the General Chemical business that was acquired in January 2014. Comparative results for 2013 show only the legacy business.
For the year ended December 31, 2014, distributable cash after maintenance capital expenditures was $126.6 million or $2.10 per unit. The comparable numbers for 2013 were $75.5 million and $1.81 per unit. The increase was due primarily to the General Chemical acquisition. Revenue for the year was $1.2 billion (2013: $836.1 million). EBITDA was $221.2 million compared with $129.9 million in 2013. Adjusted cash flow from operating activities was $170.6 million (2013: $109.9 million). Net earnings for 2014 were $21.0 million, which was $15.5 million higher than the $5.5 million reported in 2013. Higher levels of depreciation and amortization and higher net finance costs in 2014 were partially offset by higher income tax recoveries in 2014 compared with 2013.
Chemtrade President and Chief Executive Officer, Mark Davis, said, "By the end of 2014 Chemtrade was a much larger and stronger business than it was a year earlier. The General Chemical acquisition continued the successful execution of our strategic direction of adding size, scale and diversity of earnings to our business. In addition to integrating the new business, we also raised additional capital and sold our Montreal East facility thus ensuring balance sheet strength and flexibility. We are well positioned for future success."
For the fourth quarter of 2014, revenue was $313.3 million, which was $111.7 million higher than the fourth quarter of 2013, mainly due to the revenue from the General Chemical business. Additionally, the International segment posted increased revenue due to higher volumes of sulphuric acid and higher prices of sulphur. Aggregate cash flow from operating activities was $50.1 million compared with $29.9 million generated during the fourth quarter of 2013.
Distributable cash after maintenance capital expenditures for the fourth quarter of 2014 was $24.4 million or $0.38 per unit. The comparable numbers for the fourth quarter of 2013 were $3.4 million or $0.08 per unit. The primary reasons for the increase in distributable cash were the inclusion of the General Chemical business in 2014 and the recording of $10.2 million of settlement gains on changes made to certain post-employment benefit plans during the fourth quarter of 2014. This was partially offset by maintenance capital expenditures of $25.3 million in the fourth quarter of 2014, which were $10.7 million higher than the amount spent during the fourth quarter of 2013.
In the fourth quarter Sulphur Products & Performance Chemicals generated revenue of $154.9 million and EBITDA of $35.1 million compared with $130.2 million and $31.8 million, respectively, in 2013. The main reason for the increase in revenue was the inclusion of the acquired business. This was partially offset by the inclusion of results for the Montreal East business in 2013.
Water Solutions & Specialty Chemicals reported fourth quarter revenue of $101.3 million compared with $27.2 million in 2013 and EBITDA of $26.8 million compared with $6.2 million in 2013. The higher results are due to the inclusion of the acquired business.
International reported revenue of $57.1 million for the fourth quarter, compared with $44.2 million in 2013. This increase in revenue reflected higher volumes of sulphuric acid and higher prices of sulphur. EBITDA for the quarter was $4.6 million, compared with $3.7 million in 2013.
Corporate costs during the fourth quarter of 2014 were $5.0 million, which was $15.6 million lower than the fourth quarter of 2013. The decrease was mainly due to $10.2 million of settlement gains recorded during the fourth quarter of 2014. Additionally, the fourth quarter of 2014 had lower LTIP costs, whereas the fourth quarter of 2013 included acquisition related costs of $2.9 million. These items more than offset higher costs related to the increased scale of corporate services resulting from the acquisition.
Mr. Davis said, "In general, our operating businesses performed well in 2014. Demand for most of our products was stable during the year and we expect demand for our expanded range of products to remain stable in 2015. We will continue to pursue our strategy of growth and operational excellence together with adherence to our risk-mitigating business model and financial prudence. We remain confident that successful execution of this strategy will enable us to continue providing our unitholders with the growth and yield they have come to expect."
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; the effectiveness of our business model; our growth prospects and ability to sustain our distribution rate. 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.
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