Results Show Strength of Combined Business Following General Chemical Acquisition
TORONTO, Nov. 12, 2014 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three and nine months ended September 30, 2014. 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 a full quarter of contribution from the General Chemical business that was acquired in January 2014. Revenue in the quarter was $324.6 million compared to $206.9 million in 2013. The primary reason for the increase in revenues was the addition of the General Chemical business, as well as higher revenues in the SPPC and International segments due to higher volumes of sulphuric acid and sulphur.
Distributable cash after maintenance capital expenditures for the third quarter was $50.6 million, or $0.83 per unit (2013: $23.7 million, or $0.57 per unit). During the third quarter of 2014, distributable cash benefited from maintenance capital expenditures being lower than the anticipated annual run rate.
Adjusted cash flows from operating activities for the period were $58.3 million (2013: $32.0 million). EBITDA for the third quarter was $72.1 million compared with $37.5 million in the third quarter of 2013. Net earnings were $11.8 million compared with $20.4 million in the same period in 2013. The decrease is primarily due to an unrealized foreign exchange loss in the third quarter of 2014 of $19.6 million, partially offset by the gain on the sale of the Montreal East facility.
For the nine months ended September 30, 2014, distributable cash after maintenance capital expenditures was $102.2 million (2013: $72.1 million), or $1.73 per unit (2013: $1.73 per unit) generated from revenue of $916.7 million (2013: $634.5 million). EBITDA was $159.8 million (2013: $108.8 million). Adjusted cash flow from operating activities was $120.8 million (2013: $91.9 million), and net earnings for the first nine months of 2014 were $31.1 million (2013: $34.7 million).
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "The third quarter results showed the strength and promise of our combined business following the General Chemical acquisition. The new business continues to perform in line with our expectations, and we are pleased with the contribution it is making to our enhanced operations."
Sulphur Products & Performance Chemicals ("SPPC") generated revenue of $159.3 million and EBITDA of $48.2 million compared with $131.7 million and $34.8 million, respectively, in 2013. The main reason for the increased revenue was the inclusion of the newly acquired business, as well as higher volumes of sulphur and sulphuric acid.
Water Solutions & Specialty Chemicals ("WSSC") reported third quarter revenue of $112.9 million compared with $31.8 million in 2013, and EBITDA of $33.0 million which was $23.9 million higher than the third quarter of 2013, due primarily to the inclusion of the acquired business.
International reported revenue of $52.4 million for the third quarter, compared with $43.4 million in 2013. EBITDA for the quarter was $4.3 million, which was $2.4 million higher than last year, due to improved conditions for sulphuric acid and sulphur in certain international markets.
Corporate costs during the third quarter of 2014 were $13.4 million. This was $5.1 million higher than the third quarter of 2013, due primarily to higher costs associated with the increased scale of the business and LTIP expenses that were $1.4 million higher than the third quarter of 2013.
Mr. Davis said, "In general, our combined businesses performed well during the third quarter. Additionally, during the quarter we strengthened our balance sheet by reducing senior debt with the proceeds of the sale of the Montreal East business. We remain confident that our portfolio of businesses, business model and our strong balance sheet will continue supporting our ability to provide 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.
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 effectiveness of our business model. 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