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Press release from Marketwire

Canexus Corporation Announces Second Quarter Results

Second Quarter Results Benefit from Solid North America Chlor-Alkali Performance

Thursday, July 28, 2011

Canexus Corporation Announces Second Quarter Results17:56 EDT Thursday, July 28, 2011CALGARY, ALBERTA--(Marketwire - July 28, 2011) - Canexus Corporation (TSX:CUS) (the "Corporation" or "Canexus") today announced the second quarter ended June 30, 2011 financial results for its predecessor, Canexus Income Fund (the "Fund"). Unless otherwise noted, the Corporation is reporting the 100% results of Canexus Limited Partnership ("Canexus LP").Highlights:-- The Board of Directors of Canexus declared the regular quarterly dividend of $0.1368 per common share payable October 17, 2011 to shareholders of record on September 30, 2011.-- Canexus LP recorded cash operating profit for the second quarter of $29.0 million, the upper end of our guidance for the quarter, which was $25 - $30 million, resulting in a payout ratio of 77%. Our guidance for Q3 of $35 - $40 million and Q4 of $30 - $35 million is unchanged.-- North America sodium chlorate sales volumes increased 3% over Q2 2010 and were lower than Q1 2011 by 2% (1,700 metric tonnes ("MT")). We lost 3,600 MT's of sodium chlorate production in June at our Brandon plant as a result of severe weather which affected Manitoba Hydro equipment. All of our sodium chlorate plants are now running at capacity which is expected to continue through 2011 and into 2012. Realized netback prices, despite being negatively affected by the stronger Canadian dollar relative to the US dollar (Q2/11 - US$1.03; Q1/11 - US$1.00; Q2/10 - US$0.98), increased 2% over Q1 2011 and 8% over Q2 2010. Price increases of $50/MT took effect Q2 2011 where contracts allowed. Our cash operating profit (after allocation of general and administrative expense to the business unit) was $15.1 million compared to $12.3 million in Q2 2010 and $16.0 million in Q1 2011. The decrease in cash operating profit from Q1 2011 was due to higher general and administrative costs being allocated to this business unit and higher fixed costs as a result of a planned maintenance shutdown in the quarter at our Brandon facility. North American sodium chlorate industry operating rates are currently estimated to be 96%, which should allow for continued pricing momentum in 2011 and 2012. The power line capacity upgrade to our Brandon plant is expected to be completed in 2012, setting the stage for further possible expansion opportunities.-- Sales revenue for the North American chlor-alkali business was 54% higher than the prior year as a result of the technology conversion project ("TCP") at our North Vancouver plant in Q2 2010. The old diaphragm plant was shutdown on April 30, 2010 and the new membrane plant commenced initial production on June 25, 2010. Sales revenue for this business increased 17% in Q2 2011 over Q1 2011. Sales volumes increased for all products compared to the prior quarter (caustic soda 6%; chlorine 39%; hydrochloric acid 23%). Realized metric electrochemical unit ("MECU") netback prices were down 1% from the prior quarter with higher realized caustic soda netback prices more than offset by lower realized netback prices for both chlorine and hydrochloric acid. We have announced a $120/MT price increase for caustic soda commencing in the third quarter as contracts allow, which is expected to result in significantly higher realized MECU netback prices in Q3 2011. Production volumes were 52,400 MECU, up 37% from Q1 2011 and the plant is running at capacity. Our cash operating profit (after allocation of general and administrative expense to the business) improved to $9.7 million from $0.8 million in the prior quarter. Plant fixed costs were $1.7 million lower than the prior quarter due to the planned maintenance shutdown we took in March which added about $1.4 million. We expect to continue to see lower plant fixed costs as we achieve the remaining cost reduction benefits of TCP over the balance of 2011.-- Cash operating profit in our Brazil business was $5.6 million, up from $4.6 million in Q2 2010 on stronger sales volumes of sodium chlorate as a result of our 4,400 MT expansion completed in Q2 2010, and down from $6.9 million in Q1 2011. We had a planned shutdown of our sodium chlorate plant in the quarter to coincide with a planned shutdown by our major customer. Sodium chlorate sales volumes were down 9% compared to the prior quarter and chlor-alkali sales volumes were down about 3% reflecting the planned shutdown by our major customer. We expect demand from our major customer to remain strong for the balance of 2011, keeping our plants running at or close to capacity.-- Today, our Board of Directors approved a $5.5 million project to expand our hydrochloric acid terminal capacity at our North American Terminal Operations ("NATO") site at Bruderheim to address expected ongoing significant demand from the oil and gas industry. This project is expected to be completed early in the fourth quarter. Mechanical integrity re-verification of our two 800,000 barrel salt caverns has been completed with positive results. This will support the potential large-scale development of the site to service the oilsands region.-- Canadian dollar foreign exchange call option contracts were acquired at rates between US$1.02 and US$1.026, to protect US$5 million per month commencing July 1 until December 31, 2011.-- On June 30, 2011, the Fund completed its previously announced convertible debenture bought deal financing. At closing, the Fund issued $60,000,000 aggregate principal amount of 5.75% Series IV Convertible Unsecured Subordinated Debentures (the "Series IV Debentures") at a price of $1,000 per Debenture that mature December 31, 2018. The net proceeds of the offering were used to repay long-term debt and resulted in a realized currency translation gain of $2.9 million.-- As of June 30, 2011, total borrowings under committed credit facilities were $288.4 million with remaining available undrawn capacity of approximately $150.0 million. Cash on hand at June 30, 2011 was $6.9 million.-- The previously announced plan of arrangement (the "Arrangement") was closed on July 8, 2011 resulting in the successful conversion of the Fund from an income trust to a corporate entity, Canexus Corporation. In connection with the Arrangement, all of the assets of the Fund were transferred to Canexus and Canexus assumed all of the liabilities of the Fund, including all of the obligations of the Fund with respect to convertible debentures outstanding."Canexus' financial and operating performance in the second quarter of 2011 was very solid, generating cash operating profit of $29.0 million, the top end of our previous guidance, with significant improvement in our sales revenue and gross profit driven primarily by our North America chlor-alkali business unit," said Gary Kubera, President and CEO. "These results are starting to reflect the value of the strategic investments made over the past few years. With our corporate conversion now complete, we are firmly committed to building future growth and sustaining reliable returns for our shareholders in the second half of 2011 and beyond.""Global pulp markets remained strong and pulp prices remained at or near record highs in the second quarter, following further softwood price increases during the quarter. Global pulp inventory levels increased slightly during the quarter, closing in June at 34 days of supply, with softwood pulp inventories remaining tight at 28 days and hardwood pulp inventories holding at 42 days. Pulp shipments to China began to slow during the quarter as a result of paper mill maintenance and shortages of electricity and water in China. The weakening in China does not appear to be a result of weaker fundamental demand for pulp fiber and long-term demand growth is expected to continue. With limited global pulp capacity growth expected during the next 12 - 18 months, pulp market fundamentals are expected to remain sound. The majority of market pulp produced in North America is softwood. As a result of ongoing strong pulp market conditions, further announcements of pulp mill re-starts in 2012 were made during the quarter. Mill re-starts are expected to add approximately 30,000 MT of sodium chlorate demand to the North American market over this period. All our sodium chlorate plants are running at capacity and we expect this to continue through the remainder of 2011 and into 2012. And, with the power line capacity upgrade to our Brandon plant expected to be completed in 2012, we are increasingly confident about further possible expansion opportunities.""The North America chlor-alkali industry operated at an estimated 90% of capacity in the quarter, as high industry capacity utilization continues to be supported by chlorine derivative exports to Asia from the US Gulf Coast. North American hydrochloric acid supply became more balanced with demand due to increased oil and gas drilling activity and acid consumption. Domestic and export demand for North American caustic soda remained strong due to high demand from the pulp and paper sector and lower export volume available from Japan, China and Taiwan. North American caustic soda supply is expected to increase in the third quarter of 2011 due to capacity expansions in Texas and Louisiana, and export demand is forecast to decline as production issues in Asia are resolved and Chinese capacity expansions are brought on line later this year.""Significantly higher realized MECU netbacks are expected in the third quarter as a result of the $120/MT price increase announced for caustic soda as contracts allow. Caustic soda prices are expected to soften somewhat in Q4 with the increased supply discussed previously. With our North Vancouver chlor-alkali plant expected to run at or near capacity in the third quarter, we expect to realize the benefits of higher prices and lower costs as we continue to see the additional cost saving benefits from our technology conversion project.""Brazilian pulp exports in the first half of 2011 were 1% lower when compared to 2010, as higher exports to Europe offset lower exports to China. Canexus Brazil's major sodium chlorate customer is on track to meet their 2011 pulp production targets, as are our other Brazilian pulp customers. Accordingly, Canexus Brazil's sodium chlorate and chlor-alkali plants are projected to operate at or near capacity rates for the duration of 2011.""We continue to pursue opportunities to expand our NATO site at Bruderheim, Alberta. Our Board of Directors has approved a $5.5 million project slated for completion in the fourth quarter to expand our hydrochloric acid terminal capacity to meet the growing demand from the oil and gas industry. Mechanical integrity re-verification of our two 800,000 barrel salt caverns at the site was completed in the second quarter with positive results in further support of the potential large scale development of the site to service the oilsands region.""Our payout ratio guidance for 2011 continues to be in the 90 to 95% range assuming a US$1.02 exchange rate and is expected to improve to about 70% in 2012. Today, the Board of Directors declared our first regular quarterly dividend as Canexus Corporation of $0.1368 per common share payable October 17, 2011 to shareholders of record on September 30, 2011," said Mr. Kubera.Statement of Distributable Cash Three Months Ended Six Months Ended June 30 June 30 ----------------------------------------CAD thousands, except as noted 2011 2010 2011 2010---------------------------------------------------------------------------Net Income (Loss) 11,789 (16,537) 20,718 2,757---------------------------------------------------------------------------Realized Currency Translation (Gains) Losses on Cash (568) (131) (707) 440---------------------------------------------------------------------------Provision for Current Income Taxes 1,178 2,297 2,312 3,601---------------------------------------------------------------------------Income Taxes Paid (435) (1,102) (595) (2,033)---------------------------------------------------------------------------Interest Expense 5,615 1,868 11,844 3,439---------------------------------------------------------------------------Interest Paid and not Capitalized (7,840) (3,207) (12,767) (3,207)---------------------------------------------------------------------------Interest Income (137) (15) (229) (63)---------------------------------------------------------------------------Charges and Credits to Income Not Involving Cash --------------------------------------------------------------------------- Depreciation, Amortization and Accretion 11,585 7,986 23,185 15,918--------------------------------------------------------------------------- Deferred Income Taxes 558 3,589 1,378 3,039--------------------------------------------------------------------------- Unrealized (Gains) Losses on Currency Translation 817 16,733 (6,096) 9,389--------------------------------------------------------------------------- Change in Fair Value of Foreign Exchange Options 71 1,159 476 1,746--------------------------------------------------------------------------- Change in Fair Value of Interest Rate Swaps (7) 560 (390) 1,070--------------------------------------------------------------------------- Other 1,480 1,808 2,995 2,847---------------------------------------------------------------------------Contributions to / Payments for Defined Benefit Plans (504) (671) (1,093) (1,241)---------------------------------------------------------------------------Purchase Cost of Foreign Exchange Options (731) (451) (731) (451)---------------------------------------------------------------------------Changes in Non-Cash Operating Working Capital and Due from/to Affiliates, Net (6,690) 5,308 (8,481) 5,958---------------------------------------------------------------------------Cash Generated From Operating Activities 16,181 19,194 31,819 43,209---------------------------------------------------------------------------Changes in Non-Cash Operating Working Capital and Due from/to Affiliates, Net 6,690 (5,308) 8,481 (5,958)---------------------------------------------------------------------------Non-Cash Changes in Income Tax Payable and Interest Payable 1,482 143 (794) (1,801)---------------------------------------------------------------------------Interest Income 137 15 229 63---------------------------------------------------------------------------Maintenance Capital Expenditures (3,798) (4,448) (7,482) (6,888)---------------------------------------------------------------------------Amortization of the Purchase Cost of Foreign Exchange Options (82) (741) (293) (1,798)---------------------------------------------------------------------------Realized Currency Translation Gains (Losses) on Cash 568 131 707 (440)---------------------------------------------------------------------------TCP Severance Costs Paid (566) (576) (2,133) (576)---------------------------------------------------------------------------Operating Non-Cash Items (67) (440) (505) (929)---------------------------------------------------------------------------Distributable Cash within Canexus LP 20,545 7,970 30,029 24,882---------------------------------------------------------------------------Fund Cash General and Administrative Expense (208) (84) (623) (259)---------------------------------------------------------------------------Distributable Cash 20,337 7,886 29,406 24,623---------------------------------------------------------------------------Distributions Declared 15,753 13,892 31,414 27,466---------------------------------------------------------------------------Payout Ratio 77% 176% 107% 112%---------------------------------------------------------------------------Segmented Information for the Three Month Periods Ended June 30, 2011 and2010CAD thousands, except as noted North America ---------------------------- Three Months Ended Sodium South June 30, 2011 Chlorate Chlor-alkali (2) America Other Total----------------------------------------------------------------------------Sales Revenue 54,392 50,732 25,410 - 130,534----------------------------------------------------------------------------Cost of Sales 33,780 28,495 19,857 (23) 82,109----------------------------------------------------------------------------Distribution, Selling and Marketing 6,629 15,264 297 477 22,667General and Administrative (1) 2,393 3,031 1,149 1,158 7,731----------------------------------------------------------------------------Operating Profit (Loss) 11,590 3,942 4,107 (1,612) 18,027----------------------------------------------------------------------------Add: ----------------------------------------------------------------------------Depreciation and Amortization included in Cost of Sales 3,503 5,807 1,458 - 10,768----------------------------------------------------------------------------Depreciation and Amortization included in General and Administrative - - 11 229 240----------------------------------------------------------------------------Cash Operating Profit (Loss) 15,093 9,749 5,576 (1,383) 29,035----------------------------------------------------------------------------Cash Operating Profit Percentage 28% 19% 22% 22%----------------------------------------------------------------------------CAD thousands, except as noted North America ---------------------------- Three Months Ended Sodium South June 30, 2010 Chlorate Chlor-alkali (2) America Other Total----------------------------------------------------------------------------Sales Revenue 49,105 32,975 22,244 - 104,324----------------------------------------------------------------------------Cost of Sales 32,347 29,446 17,439 84 79,316----------------------------------------------------------------------------Distribution, Selling and Marketing 6,834 10,683 316 641 18,474----------------------------------------------------------------------------General and Administrative (1) 1,896 2,319 1,073 1,126 6,414----------------------------------------------------------------------------Operating Profit (Loss) 8,028 (9,473) 3,416 (1,851) 120----------------------------------------------------------------------------Add: ----------------------------------------------------------------------------Depreciation and Amortization included in Cost of Sales 4,309 1,505 1,168 - 6,982----------------------------------------------------------------------------Depreciation and Amortization included in General and Administrative - - - 422 422----------------------------------------------------------------------------Cash Operating Profit (Loss) 12,337 (7,968) 4,584 (1,429) 7,524----------------------------------------------------------------------------Cash Operating Profit (Loss) Percentage 25% (24%) 21% 7%----------------------------------------------------------------------------Notes:1. General and administrative expenses are for functional areas such as human resources, finance, information technology and legal and are allocated to the operating segments based on production volumes.2. Revenues and costs for NATO are included in North America Chlor-alkali.Operations HighlightsCanexus has a total of six manufacturing plants - four in Canada and two at one site in Brazil - organized into three business units. Canexus also provides fee-for-service hydrocarbon transloading at its terminal in Alberta. NATO results are included in the North America Chlor- alkali results. Highlights for each unit are as follows:-- North America Sodium Chlorate: -- Second quarter sales revenue for this segment compared to the same period in 2010 increased 11% to $54.4 million from $49.1 million. Sales volumes increased 3% over Q2 2010 benefiting from continued strength in pulp markets. Realized netback prices (net of freight), despite being negatively affected by the stronger Canadian dollar relative to the US dollar (Q2/11 - US$1.03; Q2/10 - US$0.98), increased 8% over Q2 2010. Our cash operating profit percentage increased from 25% for the three months ended June 30, 2010 to 28% as a result of higher realized netback prices and higher sales volumes, partially offset by lower production volumes, higher salt and electricity costs, slightly higher fixed costs and higher general and administrative expense allocated to this segment. Production volumes were lower due to unplanned downtime in June 2011 at our Brandon plant resulting from severe weather that affected Manitoba Hydro equipment. -- Second quarter sales revenue for this segment compared to the first quarter of 2011 decreased 1% to $54.4 million from $54.7 million. Sales volumes decreased 2% over Q1 2011 as Q2 is typically when our customers schedule annual maintenance downtime. Realized netback prices, despite being negatively affected by the stronger Canadian dollar relative to the US dollar (Q2/11 - US$1.03: Q1/11 - US$1.00), increased 2% over Q1 2011. Our cash operating profit decreased from $16.0 million in Q1 2011 to $15.1 million in the current quarter. The decrease in cash operating profit from Q1 2011 was due to higher general and administrative costs being allocated to this business unit and higher fixed costs as a result of a planned maintenance shutdown in the quarter at our Brandon facility. North American sodium chlorate industry operating rates are currently estimated to be 96%, which should allow for continued pricing momentum in 2011 and 2012. Sodium chlorate production in the quarter was 87,500 MT's.-- North America Chlor-alkali: -- Second quarter sales revenue for this segment compared to the same period in 2010 increased 54% to $50.7 million from $33.0 million, as a result of the technology conversion project at our North Vancouver plant in Q2 2010. The old diaphragm plant was shutdown on April 30, 2010 and the new membrane plant commenced initial production on June 25, 2010. Higher sales volumes of chlorine (67%), caustic soda (24%) and hydrochloric acid (78%) combined with higher MECU realized netback prices of 9.5% contributed to the increase in sales revenues in Q2 2011 compared to Q2 2010. Cash operating profit (loss) increased from a loss of $8.0 million for the three months ended June 30, 2010 to a profit of $9.7 million for the three months ended June 30, 2011. During the three months ended June 30, 2010, our North Vancouver chlor-alkali facility was shutdown for a two-month period for the TCP transition discussed above, $1.6 million of additional costs were incurred to source product for our customers and $2.6 million of planned maintenance expense was incurred. -- Sales revenue for this business increased 17% in Q2 2011 to $50.7 million from $43.3 million in Q1 2011. Our cash operating profit improved to $9.7 million from $0.8 million in the prior quarter. Sales volumes increased for all products compared to the prior quarter (caustic soda 6%; chlorine 39%; hydrochloric acid 23%). Realized MECU netback prices were down 1% from the prior quarter with higher realized caustic soda netback prices more than offset by lower realized netback prices for both chlorine and hydrochloric acid. The strong Canadian dollar has the biggest impact on chlorine and hydrochloric acid realized netback prices as over 90% of our chlorine and over 50% of our hydrochloric acid is sold into the United States. In contrast, about 90% of our caustic is sold in Canada, where we have announced a $120/MT price increase commencing in the third quarter, as contracts allow. The most significant factor affecting chlorine realized netback prices in Q2 was higher transportation costs on certain US routes, which we intend to vigorously challenge. Production volumes were 52,400 MECU, up 37% from Q1 2011. We had a short unplanned shutdown in the quarter to fix a faulty valve. The plant has been running at capacity since. Plant fixed costs were $1.7 million lower than the prior quarter due to the planned maintenance shutdown we took in March which added about $1.4 million. We expect to continue to see lower plant fixed costs as we achieve the remaining cost reduction benefits of TCP over the balance of 2011.-- South America: -- Second quarter sales revenue for this segment compared to the same period in 2010 increased 14% to $25.4 million from $22.2 million primarily as a result of higher sales volumes of sodium chlorate (16%), hydrochloric acid (17%) and sodium hypochlorite (17%), partially offset by slightly lower caustic soda and chlorine sales volumes. The increase in sodium chlorate sales volumes was due to higher plant capacity (from our 4,400MT annual capacity addition completed in Q2 2010) and strong demand from both our major customer and other pulp customers. Our cash operating profit increased from $4.6 million for the three months ended June 30, 2010 to $5.6 million as a result of higher sales volumes, partially offset by higher plant fixed costs. -- Second quarter sales revenue for this segment decreased 9% to $25.4 million from $28.0 million in the first quarter of 2011. Cash operating profit decreased from $6.9 million in Q1 2011 to $5.6 million in Q2 2011. We had a planned shutdown of our sodium chlorate plant in the quarter to coincide with a planned shutdown by our major customer. Sodium chlorate sales volumes were down 9% compared to the prior quarter and chlor-alkali sales volumes were down about 3% reflecting the planned shutdown by our major customer. We expect demand from our major customer to remain strong for the balance of 2011, keeping our plants running at or close to capacity.Financial Updates-- Long-term Debt and Finance Income (Expense): -- As of June 30, 2011, total borrowings under committed credit facilities were $288.4 million with remaining available undrawn capacity of approximately $150.0 million. Cash on hand at June 30, 2011 was $6.9 million. -- We borrow in US dollars, which creates unrealized currency translation gains as the Canadian dollar strengthens. A substantial portion of our revenues are denominated in or referenced to the US dollar. During the second quarter of 2011, we recorded an unrealized currency translation loss of $1.5 million (Q2/10 - $18.4 million unrealized loss as a result of the weakening of the Canadian dollar at the end of the second quarter of 2010 from March 31, 2010, and realizing $3.7 million of foreign currency gains discussed below) on our US dollar denominated long-term debt as a result of realizing foreign currency translation gains of $2.9 million (Q2/10 - $3.7 million) on repayments of US dollar denominated loans combined with the further strengthening of the Canadian dollar from March 31, 2011 to June 30, 2011. These amounts are included in finance income (expense). -- Interest expense in the quarter was $5.6 million (Q2/10 - $2.1 million) and is included in finance income (expense). Interest capitalized on major projects was $0.1 million in Q2 2011 ($3.5 million in Q2 2010). We stopped capitalizing interest associated with TCP capital expenditures on August 1, 2010.-- Other Income (Expense): -- In the second quarter, mark-to-market fair value losses of $0.1 million (Q2/10 - $1.2 million) and realized gains of $Nil (Q2/10 - $0.7 million) were recorded on foreign exchange option contracts for a net loss of $0.1 million. -- In the second quarter of 2011, we recorded mark-to-market fair value losses of $Nil (Q2/10 - $0.6 million) on interest rate swaps and realized losses of $0.4 million (Q2/10 - $0.4 million). -- Other income also includes $0.8 million of currency translation gains on working capital in Q2 2011 ($1.6 million - Q2 2010) and the hydrogen settlement of $7.3 million in Q2 2010.-- Capital Expenditures: Capital expenditures for the three months ended June 30, 2011 were $8.7 million, of which $3.8 million was spent on maintenance projects and the balance on continuous improvement and expansion projects.-- Provision for Income Taxes: Current income taxes are lower in the second quarter as compared to the same period in 2010 due to the hydrogen settlement recorded in Q2 2010 in Brazil. Deferred income taxes are lower in the second quarter of 2011, as compared to the same period in 2010, due to lower earnings in foreign subsidiaries. As of June 30, 2011, Canexus LP has approximately $406 million of future tax deductions resulting from capital expenditures which can be used to shelter future taxable income.Operating Results for the Periods Ended June 30, 2011 and 2010 Three Months Ended Six Months Ended June 30 June 30 ------------------------------------------- 2011 2010 2011 2010----------------------------------------------------------------------------Revenues 130,534 104,324 256,510 218,039----------------------------------------------------------------------------Cost of Sales (1) 82,109 79,316 169,327 150,838----------------------------------------------------------------------------Gross Profit 48,425 25,008 87,183 67,201----------------------------------------------------------------------------Distribution, Selling and Marketing 22,667 18,474 43,168 36,865----------------------------------------------------------------------------General and Administrative(2) 7,731 6,414 15,036 14,033----------------------------------------------------------------------------Operating Profit 18,027 120 28,979 16,303----------------------------------------------------------------------------Finance Expense (5,211) (17,774) (5,207) (11,358)----------------------------------------------------------------------------Income (Loss) before Other Income and Income Taxes 12,816 (17,654) 23,772 4,945----------------------------------------------------------------------------Other Income 709 7,003 636 4,452----------------------------------------------------------------------------Income (Loss) before Income Taxes 13,525 (10,651) 24,408 9,397----------------------------------------------------------------------------Provision for Income Taxes---------------------------------------------------------------------------- Current 1,178 2,297 2,312 3,601---------------------------------------------------------------------------- Deferred 558 3,589 1,378 3,039---------------------------------------------------------------------------- 1,736 5,886 3,690 6,640----------------------------------------------------------------------------Net Income (Loss) 11,789 (16,537) 20,718 2,757----------------------------------------------------------------------------Notes:1. Depreciation and amortization included for the three and six months ended June 30, 2011 - $10.8 million and $21.5 million respectively; depreciation and amortization included for the three and six months ended June 30, 2010 of $7 million and $13.9 million respectively.2. Depreciation and amortization included for the three and six months ended June 30, 2011 - $0.2 million and $0.5 million respectively; depreciation and amortization included for the three and six months ended June 30, 2010 of $0.4 million and $0.8 million respectively.Financial Statements, Conference Call and WebcastFinancial Statements and Management's Discussion and Analysis will be posted on the Canexus web site at www.canexus.ca and filed on SEDAR when available. Management will host a conference call at 10 a.m. ET on July 29, 2011, to discuss the results. A Q2 2011 presentation will be available on our website to facilitate the conference call. Please call 416-644-3414 or 1-800- 814-4859. The conference call will also be accessible via webcast at www.canexus.ca. A replay of the conference call will be available until midnight August 5, 2011. To access the replay, call 416- 640-1917 or 1-877-289-8525, followed by passcode 4453364#.Non-GAAP MeasuresCash operating profit, cash operating profit percentage, payout ratio, distributable cash and gross profit are non-GAAP financial measures, but management believes they are useful in measuring the Corporation's performance. Readers are cautioned that these measures should not be construed as alternatives to net income or loss or other comparable measures determined in accordance with GAAP as an indicator of the Corporation's performance or as a measure of the Corporation's liquidity and cash flow. The Corporation's method of calculating non-GAAP measures may differ from the methods used by other issuers and accordingly, the Corporation's non-GAAP measures are unlikely to be comparable to similarly titled measures used by other issuers.Forward-Looking StatementsThis news release contains forward-looking statements and information relating to expected future events relating to Canexus and its subsidiaries, including with respect to sodium chlorate industry operating rates and their impact on pricing for sodium chlorate, the timing of completion of power line capacity upgrades at Brandon, MECU netbacks, reduced fixed operating costs as a result of completion of the TCP, demand from Canexus' major Brazilian customer, demand from the oil and gas industry for hydrochloric acid terminal capacity at Bruderheim and the timing of completion of a facility expansion in relation thereto, fundamentals and demand in the global pulp market and pulp capacity growth in relation thereto, caustic soda supply and demand and the impact on prices, facility utilization and operating rates in relation to demand expectations and expectations regarding payout ratios. The use of the words "expects", "anticipates", "continue", "estimates", "projects", "should", "believe", "plans", "intends", "may", "will" or similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including market and general economic conditions, future costs, treatment under governmental regulatory, tax and environmental regimes and the other risks and uncertainties detailed under "Risk Factors" in the Fund's Annual Information Form filed on the Fund's SEDAR profile at www.sedar.com. Management believes the expectations reflected in these forward-looking statements are currently reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Due to the potential impact of these factors, Canexus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. Financial outlook information contained in this press release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Such financial outlook information should not be used for purposes other than those for which it is disclosed herein.About CanexusCanexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Our four plants in Canada and two at one site in Brazil are reliable, low-cost, strategically-located facilities that capitalize on competitive electricity costs and transportation infrastructure to minimize production and delivery costs. Canexus also provides fee- for-service hydrocarbon transloading services to the oil and gas industry from its terminal at Bruderheim, Alberta. Canexus targets opportunities to maximize shareholder returns and delivers high-quality products to its customers. Canexus' common shares (CUS) and debentures (Series I - CUS.DB; Series III - CUS.DB.A; Series IV - CUS.DB.B) trade on the Toronto Stock Exchange. More information about Canexus is available at www.canexus.ca.FOR FURTHER INFORMATION PLEASE CONTACT: Gary KuberaCanexus CorporationPresident and CEO(403) 571-7300ORRichard McLellanCanexus CorporationCFO(403) 571-7300www.canexus.ca