TORONTO, Nov. 13, 2013 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and nine months ended September 30, 2013. 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.
Distributable cash after maintenance capital expenditures for the third quarter was $23.7 million, or $0.57 per unit (2012: $24.3 million, or $0.58 per unit), generated from revenue of $206.9 million (2012: $240.9 million). Adjusted cash flows from operating activities for the period were $32.0 million (2012: $29.9 million). The primary reason for the decrease in revenues was lower revenues in the International segment. EBITDA for the third quarter was $37.5 million compared with $35.8 million in the third quarter of 2012. Net earnings were $20.4 million compared with $10.6 million in the same period in 2012. The increase in net earnings is primarily due to fair value adjustments on the convertible unsecured subordinated debentures and an income tax recovery.
For the nine months ended September 30, 2013, distributable cash after maintenance capital expenditures was $72.1 million (2012: $72.5 million), or $1.73 per unit (2012: $1.74 per unit) generated from revenue of $634.5 million (2012: $696.3 million). EBITDA was $108.8 million (2012: $106.8 million). Adjusted cash flow from operating activities was $91.9 million (2012: $87.6 million), and net earnings for the first nine months of 2013 were $34.7 million (2012: $23.3 million).
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "In the third quarter, our North American businesses generated earnings that were similar to the same period in 2012. Revenue was lower than last year, due to a combination of lower volumes of sulphur and of sulphuric acid and lower prices, particularly for sulphur. This weakness was partially offset by higher prices of other products in our SPPC group. Despite lower revenue, our risk-sharing business model and diversity of our portfolio enabled us to maintain consistent results for our North American operations. Although North American acid prices are moderately lower than last year, our customers' demand for product supports our belief that economic activity in North America remains firm."
SPPC generated revenue of $151.5 million and EBITDA of $41.2 million compared with $158.1 million and $41.5 million, respectively, in 2012. The main reasons for the decrease in revenue were lower volumes of sulphur and sulphuric acid and lower prices of sulphur. This was partially offset by higher prices for certain other products within the segment relative to 2012. Despite the decrease in revenue, EBITDA was steady with last year.
Pulp Chemicals reported third quarter revenue of $12.0 million compared with $13.4 million in 2012 and EBITDA of $2.7 million compared with $3.0 million last year. This was due to lower sales volumes of sodium chlorate.
International reported revenue of $43.4 million for the third quarter, compared with $69.3 million in 2012. This reduction in revenue reflected lower prices and volumes of sulphur and sulphuric acid caused by the generally weak conditions in international markets. EBITDA for the quarter was $1.9 million, compared with $3.0 million last year.
Excluding unrealized foreign exchange gains and losses, Corporate costs during the third quarter of 2013 were $8.3 million, which was $3.4 million lower than the third quarter of 2012. LTIP expenses for the third quarter were $2.9 million lower than the third quarter of 2012.
Mr. Davis said, "Our plants operated well during the quarter and we continue to make the investments necessary for the long-term reliability of our operations. We remain confident in our ability to meet our objectives of providing both yield and growth to our unitholders."
Distributions declared in the third quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.
Potential Acquisition Discussions
Chemtrade confirms that it is in discussions with American Securities LLC regarding a potential acquisition of General Chemical Corp. While discussions are ongoing, no assurance can be given that a transaction will be completed or if completed, as to the terms or conditions which might apply to any such transaction.
Mr. Davis said, "Chemtrade has a history of growing by acquisition. We have successfully acquired and integrated a number of businesses, but have backed away from many others. In evaluating transactions, we consider accretion to our unitholders, sustainability of earnings and the maintenance of our balance sheet strength."
Chemtrade does not intend to make further comment unless or until there is a transaction to announce.
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: capital expenditures; the effectiveness of the Fund's business model; the Fund's ability to grow and provide yield to unitholders; the level of North American economic activity; and the possibility of a transaction, its terms and any announcement regarding a transaction. 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:
President and CEO
Tel: (416) 496-4176
Vice-President, Finance and CFO
Tel: (416) 496-4177