TORONTO, Nov. 12, 2015 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three and nine months ended September 30, 2015. 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.
Revenue in the quarter was $364.4 million compared to $314.0 million in 2014. The primary reason for the increase was the positive impact of the stronger U.S. dollar on U.S. dollar denominated revenues. Adjusted cash flows from operating activities for the period were $57.7 million (2014: $58.3 million).
Distributable cash after maintenance capital expenditures for the third quarter was $45.1 million, or $0.65 per unit (2014: $50.6 million, or $0.83 per unit). Distributable cash for the third quarter of 2014 included $9.9 million related to the sale of the Montreal East business in the third quarter. Additionally, maintenance capital expenditure was $4.8 million higher this year than in the third quarter last year.
Aggregate Adjusted EBITDA for the third quarter of 2015 was $68.5 million compared with $62.2 million in the third quarter of 2014.
Net earnings from continuing operations for the third quarter of 2015 were $18.5 million compared with a net loss from continuing operations of $5.9 million in the same period in 2014. The improvement is partially due to higher net finance costs in 2014 due to the fair value adjustments on the convertible unsecured subordinated debentures. The higher Adjusted EBITDA and lower net finance costs in 2015 were partially offset by higher levels of depreciation and amortization in the third quarter of 2015 relative to the same period of 2014.
For the nine months ended September 30, 2015, distributable cash after maintenance capital expenditures was $125.6 million (2014: $102.2 million), or $1.82 per unit (2014: $1.73 per unit) generated from revenue of $1,029.2 million (2014: $890.1 million). Adjusted EBITDA was $185.3 million (2014: $140.7 million). Adjusted cash flow from operating activities was $150.1 million (2014: $120.8 million), and net earnings from continuing operations for the first nine months of 2015 were $32.5 million (2014: net loss $10.7 million).
Mark Davis, President and Chief Executive Officer of Chemtrade, said, "Chemtrade had a solid third quarter, and we are pleased with the performance of our businesses during the first nine months of this year. Significantly higher volumes of regenerated sulphuric acid and ultra pure acid in the third quarter this year more than offset some weakness experienced by a few of our other products. Our financial results also benefited from the strong U.S. dollar."
Sulphur Products & Performance Chemicals ("SPPC") generated revenue of $172.4 million and Adjusted EBITDA from continuing operations of $38.6 million in the third quarter of 2015 compared with $148.6 million and $38.3 million, respectively, in 2014. The main reason for the increased revenue was the positive impact of the stronger U.S. dollar in the third quarter of 2015.
Water Solutions & Specialty Chemicals ("WSSC") reported third quarter revenue of $132.3 million compared with $113.0 million in 2014. EBITDA was $33.7 million compared with $33.0 million in 2014. Relative to the third quarter of 2014, EBITDA during the third quarter of 2015 benefitted by $4.4 million as a result of the stronger U.S. dollar. However, this benefit was largely offset by lower margins for aluminum sulphate (known as alum).
The International segment reported revenue of $59.7 million for the third quarter, compared with $52.4 million in the third quarter of last year. The higher level of revenue reflects the impact of the stronger U.S. dollar. EBITDA for the quarter was $3.2 million, compared with $4.3 million last year, which was a strong quarter for the segment.
Corporate costs during the third quarter of 2015 were $7.0 million, which was $6.4 million lower than the third quarter of 2014. The third quarter this year benefitted from the release of a provision of $4.1 million with respect to a lawsuit related to the Marsulex acquisition, and LTIP costs which were $3.4 million lower than the third quarter of 2014.
Mr. Davis said, "In general, business conditions during the third quarter were similar to the conditions we have seen the rest of the year. We expect these business conditions to continue in the fourth quarter. Generally our fourth quarter is weaker than the third as our regen and alum businesses have some seasonality. This year, our fourth quarter results will also be affected by a two-month plant turnaround at one of our largest regen customers that occurs once every five years. The typical seasonal slowdown in the fourth quarter will therefore be larger than normal since the fourth quarter will therefore be affected by both the typical seasonal slowdown and the customer turnaround. Looking forward, the diversity of our product portfolio and end markets, and the geographic spread of our approximately 60 manufacturing sites should continue to mitigate the impact of typical commodity fluctuations. We remain confident that our robust business model will continue to generate strong cash flows."
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: future business conditions; the length, timing and effect of a customer's turnaround; and Chemtrade's ability to mitigate the effects of typical commodity fluctuations; and 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