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Press release from Marketwire

Canexus Corporation's Fourth Quarter and Year-End Results Exceed Expectations

Cash Operating Profit Increases 78% over Prior Year Driven by Strong Chlor-alkali Performance at North Vancouver Facility

Thursday, March 08, 2012

Canexus Corporation's Fourth Quarter and Year-End Results Exceed Expectations17:05 EST Thursday, March 08, 2012CALGARY, ALBERTA--(Marketwire - March 8, 2012) - Canexus Corporation (TSX:CUS) (the "Corporation" or "Canexus") today announced its financial results for the fourth quarter and year ended December 31, 2011. Unless otherwise noted, the Corporation is reporting the 100% results of Canexus Limited Partnership ("Canexus LP"). Highlights:Canexus LP delivered record cash operating profit (after cash general and administrative expense of the Corporation) for the year ended December 31, 2011 of $123.4 million, 78% higher than for the same period in 2010 and ahead of our guidance for the year of $120 to $122 million. For the fourth quarter, cash operating profit was $36.7 million, 84% higher than for the same period in the prior year and well ahead of our guidance for the quarter of $30 to $35 million. Distributable cash was $20 million for the fourth quarter 2011 ($0.17 per share), resulting in a payout ratio of 81% for this three-month period. Full year distributable cash was $73.7 million for a payout ratio of 86%. Canexus set record production levels at both its flagship Brandon sodium chlorate plant (301,600 metric tonnes ("MT")) and its North Vancouver chlor-alkali facility (195,300 metric electrochemical units ("MECU") or 93% of practical capacity) for the year. In Brazil, we set record production levels at both our sodium chlorate and chlor-alkali plants contributing to record cash operating profit of $24.2 million in 2011. Our recently announced hydrochloric acid expansion (by 111,000 wet metric tonnes ("WMT")) is on track for completion in late 2012. We are currently evaluating a second expansion of our hydrochloric acid capacity that could see us add an additional 111,000 WMT in late 2013. The Board declared the regular quarterly dividend of $0.1368 per common share payable April 16, 2012 to shareholders of record on March 31, 2012. "Canexus' results for the fourth quarter and the year ended December 31, 2011 exceeded expectations and set the stage for a very solid 2012," said Gary Kubera, President and CEO. "Led by the strong performance of our chlor-alkali facility at North Vancouver, these results continue to reflect the benefits of the strategic investments we have made in our business and our commitment to drive future growth while delivering sustainable returns to our shareholders. We continue to be very excited by the demand for services of our North American Terminal Operations ("NATO") business at Bruderheim, which is the strategic link to competitively deliver Canexus' hydrochloric acid and caustic soda to our oil and gas industry customer base, as well as a key facility to move oil and other hydrocarbon products in and out of Alberta by rail."Distributable Cash Distributable cash available to Canexus Corporation was $20.0 million ($0.17 per share) for the fourth quarter resulting in a payout ratio of 81%.Three Months Ended December 31Year Ended December 31CAD thousands2011201020112010Cash Operating Profit37,41220,132125,33769,937Interest Expense(5,546)(6,963)(23,365)(15,491)Realized Currency Translation Gains1432923,43525,204Maintenance Capital Expenditures(7,628)(5,073)(19,438)(14,146)Provision for Current Income Taxes(2,390)(511)(5,705)(4,715)TCP Severance Costs Paid-(428)(2,133)(2,381)Other(1,327)(751)(1,738)2,614Distributable Cash of Canexus LP20,6646,69876,39361,022Cash General and Administrative Expense of the Corporation(694)(126)(1,936)(459)DTU Plan Settlement on Conversion--(1,505)-Other(7)-711-Distributable Cash19,9636,57273,66360,563Distributable Cash Per Share$0.17Dividends Declared Per Share$0.1368Payout Ratio81%Below is a reconciliation of net cash generated from operating activities to Distributable Cash of the Corporation for the three months and year ended December 31, 2011.CAD thousandsThree Months Ended December 31, 2011Year Ended December 31, 2011Net Cash Generated from Operating Activities (1)31,533100,710Changes in Non-Cash Operating Working Capital and Due to/from Affiliates, Net(9,343)(17,229)Non-Cash Change in Income Tax Payable and Interest Payable879(83)Interest Income1271,230Maintenance Capital Expenditures(7,628)(18,938)Realized Foreign Currency Translation Gains on Cash146238TCP Severance Costs Paid-(748)Amortization of the Purchase Cost of Foreign Exchange Options(371)(872)Expenditures on Decommissioning Liabilities(311)(608)Operating Non-Cash Items4,9314,584Corporation's Share of Canexus LP's Distributable Cash (1)-1,703Distributable Cash of the Corporation (1)19,96369,987(1) The consolidated financial statements of Canexus Corporation include the Corporation's share of the results of operations of Canexus LP for the period January 1, 2011 to February 6, 2011 (prior to the indirect acquisition of Nexen's entire interest in Canexus LP on February 7, 2011), and 100% thereafter.Segmented Information for the Three- and Twelve-Month Periods Ended December 31, 2011 and 2010Canexus 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. Below is our fourth quarter and full year performance by segment.CAD thousands, except as notedNorth AmericaThree Months Ended December 31, 2011Sodium ChlorateChlor-alkali (2)South AmericaOtherTotalSales Revenue58,31159,16826,324-143,803Cost of Sales34,76230,95220,8834086,637Distribution, Selling and Marketing7,51714,58037249522,964General and Administrative (1)2,4603,1171,0191,0367,632Operating Profit (Loss)13,57210,5194,050(1,571)26,570Add:Depreciation and Amortization included in Cost of Sales3,1985,7271,576-10,501Depreciation and Amortization included in General and Administrative--14231245Share-based Compensation1420105296Cash Operating Profit (Loss)16,78416,2665,650(1,288)37,412Cash Operating Profit Percentage29%27%21%-26%CAD thousands, except as notedNorth AmericaThree Months Ended December 31, 2010Sodium ChlorateChlor-alkali (2)South AmericaOtherTotalSales Revenue53,41341,08325,782-120,278Cost of Sales32,66830,37822,9474286,035Distribution, Selling and Marketing7,16510,98230647818,931General and Administrative (1)2,3442,8681,0201,0657,297Operating Profit (Loss)11,236(3,145)1,509(1,585)8,015Add:Depreciation and Amortization included in Cost of Sales3,4946,5811,481-11,556Depreciation and Amortization included in General and Administrative---433433Share-based Compensation1624187128Cash Operating Profit (Loss)14,7463,4602,991(1,065)20,132Cash Operating Profit Percentage28%8%12%-17%CAD thousands, except as notedNorth AmericaYear Ended December 31, 2011Sodium ChlorateChlor-alkali (2)South AmericaOtherTotalSales Revenue221,990210,613106,988-539,591Cost of Sales133,835121,16482,879(41)337,837Distribution, Selling and Marketing28,03557,1611,3672,13688,699General and Administrative (1)9,49812,0344,4244,70030,656Operating Profit (Loss)50,62220,25418,318(6,795)82,399Add:Depreciation and Amortization included in Cost of Sales13,25723,0105,827-42,094Depreciation and Amortization included in General and Administrative--47933980Share-based Compensation3(17)(20)(102)(136)Cash Operating Profit (Loss)63,88243,24724,172(5,964)125,337Cash Operating Profit Percentage29%21%23%-23%CAD thousands, except as notedNorth AmericaYear Ended December 31, 2010Sodium ChlorateChlor-alkali (2)South AmericaOtherTotalSales Revenue211,266147,94498,147-457,357Cost of Sales131,613110,04577,551172319,381Distribution, Selling and Marketing27,92842,7971,3122,01974,056General and Administrative (1)8,76610,4654,2055,80429,240Operating Profit (Loss)42,959(15,363)15,079(7,995)34,680Add:Depreciation and Amortization included in Cost of Sales15,60813,0614,381-33,050Depreciation and Amortization included in General and Administrative---1,6951,695Share-based Compensation777380282512Cash Operating Profit (Loss)58,644(2,229)19,540(6,018)69,937Cash Operating Profit (Loss) Percentage28%(2%)20%-15%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.Highlights for each business unit are as follows:North America Sodium Chlorate:Year Ended December 31, 2011 versus 2010: Annual sales revenue for this segment increased 5% to $222.0 million from $211.3 million for the year ended December 31, 2010. This increase resulted from a 5% increase in realized netback prices despite being negatively affected by the stronger Canadian dollar relative to the US dollar (US$1.01 for 2011 vs. US$0.97 for 2010). Sales volumes were consistent year over year. Cash operating profit increased from $58.6 million to $63.9 million as a result of higher realized netback prices, partially offset by higher electricity rates and salt costs, slightly higher fixed costs and higher corporate general and administrative expense allocated to this business segment for the year. Price increases (about 4% higher in local currency terms than 2011 average netback prices) were implemented at the beginning of 2012. Q4 2011 versus Q3 2011: Fourth quarter sales revenue for this segment compared to the third quarter increased 7% to $58.3 million from $54.6 million. Sales volumes increased 3% between periods. Realized netback prices, which were positively affected by the weaker Canadian dollar relative to the US dollar in the fourth quarter (US$0.98 in Q4 vs. US$1.03 in Q3), increased 3%. Cash Operating Profit Percentage remained constant at 29.0% as a result of the higher sales volumes and realized netback prices and higher production volumes, being offset by slightly higher electricity costs and higher salt and fixed costs. Q4 2011 versus Q4 2010: Sales revenue increased 9% to $58.3 million compared to $53.4 million in 2010. Sales volumes increased 2% between periods and realized netback prices increased 6% (the average exchange rate was the same in both quarters). Cash Operating Profit Percentage increased to 29% compared to 28% for the same period in 2010 as a result of the higher realized netback prices being partially offset by slightly higher electricity costs and fixed costs, due to higher maintenance, in the quarter. North America Chlor-alkali:Year Ended December 31, 2011 versus 2010: Annual sales revenue for the North America chlor-alkali segment compared to the same period in 2010 increased 42% to $210.6 million from $147.9 million due to higher sales volumes of all products (hydrochloric acid 75%; chlorine 37%; and caustic soda 15%) and 12% higher MECU realized netback prices. Higher sales volumes were due to the startup and ramp up of the Technology Conversion Project ("TCP") during 2010. Cash Operating Profit (Loss) increased from a loss of $2.2 million for 2010 to a profit of $43.2 million as a result of higher sales volumes, higher MECU realized netback prices and lower fixed costs, partially offset by higher electricity rates and salt costs. Electricity consumption per MECU decreased 15% with the new membrane technology but was offset somewhat by higher electricity rates. Production for the year ended December 31, 2011 was 195,300 MECUs, 70,000 MECUs higher than the prior year due to the TCP transition. Price increases of approximately $70/WMT and $60/MT were implemented at the beginning of 2012 for hydrochloric acid and caustic soda, respectively. Q4 2011 versus Q3 2011: Fourth quarter sales revenue for the North America chlor-alkali segment increased 3% to $59.2 million from $57.4 million, due to higher sales volumes of caustic soda purchased for resale, partially offset by lower sales volumes of chlorine (13%) and 2% lower MECU realized netback prices. Hydrochloric acid price increases were more than offset by lower realized netback prices for chlorine. Cash Operating Profit decreased from $16.5 million in Q3 to $16.3 million in Q4 as a result of lower MECU realized netback prices and lower production (4%) and sales volumes (apart from higher resale caustic soda volumes in Q4), partially offset by lower fixed costs. Q4 2011 versus Q4 2010: Fourth quarter 2011 sales revenue for the North America chlor-alkali segment increased 44% to $59.2 million compared to $41.1 million in Q4 2010 due to significantly higher MECU sales volumes (38%) and 17% higher MECU realized netback prices. Cash Operating Profit increased from $3.5 million in Q4 2010 to $16.3 million in the same period in 2011 as a result of higher MECU sales volumes and realized netback prices and lower fixed costs, partially offset by higher electricity rates and salt costs. Higher fixed costs in 2010 of $1.8 million were a result of costs incurred for tank cleaning and associated treatment and disposal of waste, and inventory impairment charges recorded on obsolete Freon inventory and salt inventory resulting from the performance of a physical survey. South America:Year Ended December 31, 2011 versus 2010: Annual sales revenue for the South America segment increased 9% to $107.0 million in 2011 from $98.1 million in 2010. Higher sales volumes of sodium chlorate (6%) and hydrochloric acid (20%) and higher realized netback prices for sodium chlorate (4%), hydrochloric acid (5%) and caustic soda (6%) were partially offset by lower sales volumes (18%) and lower realized netback prices (6%) for chlorine. Higher electricity costs for the year ended December 31, 2011 also added to sales revenue due to the nature of our fixed US dollar margin contract with our major customer. Cash Operating Profit Percentage increased from 20% in 2010 to 23% in 2011 as a result of higher sales volumes and higher realized netback prices on merchant sales and higher production volumes (chlor-alkali 13% and sodium chlorate 7%). The increase in sodium chlorate sales volumes was due to higher plant capacity (from the 4,400 MT capacity expansion completed in mid-2010) and strong demand from our major customer. The increase in both production and sales volumes in chlor-alkali was due to the improved reliability of our plant. Q4 2011 versus Q3 2011: Fourth quarter sales revenue for the South America segment compared to Q3 2011 decreased 4% to $26.3 million from $27.3 million, primarily due to lower sales volumes of sodium chlorate (4%) and chlorine (27%) and lower caustic soda realized netback prices (3%), partially offset by higher sales volumes (13%) and higher realized netback prices (2%) for hydrochloric acid. Cash Operating Profit decreased from $6.1 million for the three months ended September 30, 2011 to $5.7 million due to lower sales volumes partially offset by lower fixed costs in the fourth quarter of 2011. Q4 2011 versus Q4 2010: Fourth quarter 2011 sales revenue for South America increased 2% to $26.3 million compared to $25.8 million in Q4 2010. Higher sales volumes (24%) and higher realized netback prices (23%) for hydrochloric acid were partially offset by lower sales volumes (24%) and lower realized netback prices for chlorine. Cash Operating Profit increased from $3.0 million in 2010 to $5.7 million due to higher MECU sales volumes, higher realized netback prices for hydrochloric acid and significantly lower fixed costs. Fixed costs were higher in 2010 due to higher maintenance costs and costs incurred to purchase product to supply customers resulting from an unplanned shutdown of the chlor-alkali plant in October 2010. Market FundamentalsNorth America Sodium Chlorate: The fourth quarter of 2011 saw a continued deterioration in global pulp markets. Pulp prices have declined for the fifth consecutive month, erasing all of the gains accumulated in 2011. However, at 34 days, producer inventories (December) are much lower than the July 2011 peak of 41 days, and are just above their historical average (33 days), suggesting pulp markets may soon stabilize. Despite the challenging conditions for the pulp and paper industry, only a few producers announced temporary downtime due to economic conditions. Global pulp shipments for the year are nonetheless up nearly 4% compared to the same period in 2010, primarily due to the impressive growth in shipments to China of nearly 30% year over year. Pulp prices are expected to stabilize in the first quarter of 2012 and recover modestly over the remaining part of the year. Demand for sodium chlorate remained strong in the fourth quarter of 2011 as the majority of North American bleached pulp mills continued to operate at high rates. Also, exports from North America were up approximately 2.5% (through October) over the same period last year. As a result, the chlorate industry continued to operate at rates near 95%. Price increases were implemented effective January 1, 2012. Forecasts for bleach pulp production and exports suggest overall sodium chlorate demand in 2012 will be similar to 2011 levels. North America Chlor-alkali: The North American chlor-alkali industry operated at an estimated 77% of capacity in the fourth quarter of 2011, compared with 83% in the prior quarter and 84% in the fourth quarter of 2010. The reduction in industry capacity utilization compared to the third quarter is consistent with the seasonal downturn in construction materials and water treatment. Chlorine demand from derivative exports to Asia remained weak with the expectation of a modest rebound in the first quarter of 2012 resulting in industry operating rates increasing above 80%. North American hydrochloric acid supply was again restricted due to the reduction in chlorine derivative production which generates by-product supply. Urethane and fluorocarbon producers operated at lower rates in the fourth quarter adjusting for demand levels and year-end inventories. Hydrochloric acid demand continued to outpace supply due to the dramatic increase in the acid fracturing of horizontal oil and gas wells. This supply shortfall is expected to improve in the first quarter of 2012 with higher production of chlorine derivatives. North American caustic soda production declined in the fourth quarter of 2011 consistent with reduced chlorine operating rates. North American domestic demand was strong in the fourth quarter due to continued high operating rates from the pulp and paper sector. North America MECU prices increased modestly during the fourth quarter of 2011 as rising caustic soda prices offset a decline in chlorine values. Similar dynamics are expected in the first quarter of 2012. Hydrochloric acid prices are also forecasted to increase in 2012 as demand will continue to outstrip supply. South America: Brazilian pulp exports in 2011 were an estimated 14.2 million tonnes according to Bracelpa (Brazilian Pulp Producers Association), consistent with 2010 levels. Estimated industry revenue of US $7.2 billion was 6.4% higher than 2010. Europe was the main destination for exports representing 46%, followed by China and the US, at 25% and 19% respectively.Canexus Brazil's major sodium chlorate customer met their 2011 pulp production target but due to their efficiencies, sodium chlorate usage was slightly lower than expected. This was offset by higher sales to other Canexus Brazil pulp customers. Accordingly, Canexus Brazil's sodium chlorate plant operated close to capacity in 2011.During the January to November 2011 period, Brazilian chlorine capacity utilization was 82% (6% lower than the same period of 2010). The decreased production rate was the result of demand reduction associated with a power outage and planned outages at several chlor-alkali facilities throughout the year. The majority of chlorine supply or demand changes that disrupted the Brazilian chlorine market during the first half of 2011 were associated with captive chlorine consumers that are not part of the market segments into which Canexus Brazil sells. Canexus Brazil's chlorine sales were not impacted. In contrast to the Brazilian market as a whole, Canexus Brazil's chlor-alkali capacity utilization was 95% for the year ended December 31, 2011. Western Canadian Oil & Gas: Crude oil markets remain strong and prices have increased over the course of the past six months. Price differentials between Western Canadian grades and other key benchmarks have widened due to several channel-to-market issues, including oversupply of oil in mid-continent North American markets. This trend has stimulated demand for oil transportation services based on rail to higher priced markets.Drilling activity in Western Canada has increased significantly with the majority of rigs in oil service. Increased drilling activity continues to support growing hydrochloric acid demand in the region.Financial Updates Long-term Debt and Finance Income (Expense): 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 fourth quarter of 2011, we recorded an unrealized currency translation gain of $5.9 million as a result of the strengthening of the Canadian dollar at the end of the quarter compared to the end of Q3 2011 (Q4/10 - $10.7 million unrealized gain). These amounts are included in finance income (expense). Interest expense in the quarter was $5.5 million (Q4/10 - $7.0 million). Interest capitalized on major projects was $0.2 million in Q4 2011 (Nil in Q4/10) and $0.6 million for the full year ($7.2 million in 2010). We stopped capitalizing interest associated with TCP capital expenditures on August 1, 2010. Other Income (Expense):In the fourth quarter, mark-to-market fair value gains of $0.1 million (Q4/10 - $0.4 million losses) and realized losses of $0.1 million (Q4/10 - $0.7 million gains) were recorded on foreign exchange option contracts. In the fourth quarter of 2011, we recorded mark-to-market fair value gains of $0.4 million (Q4/10 - $0.6 million) on interest rate swaps and realized losses of $0.4 million (Q4/10 - $0.4 million). Other income also includes $0.2 million of foreign currency translation losses on working capital in Q4 2011 (Q4/10 - $1.0 million). In the fourth quarter we recorded mark-to-market fair value gains on a cross currency swap of $0.7 million as a result of the strengthening of the Canadian dollar at the end of the quarter compared to the end of Q3 2011. In Q3 2011 we entered into a cross currency swap to effect the payment of interest on the Series IV Convertible Debentures issued on June 30, 2011 in US dollars. Capital Expenditures: Capital expenditures for the three months ended December 31, 2011 were $26.6 million, of which $7.6 million was spent on maintenance projects and the balance on continuous improvement ($3.8 million) and expansion projects ($15.2 million). Expansion capital was spent on the continued development of our NATO site, the rail yard and hydrochloric acid expansions at our North Vancouver facility and the power line upgrade at our Brandon plant. Provision for Income Taxes: Provision for income taxes is higher in the fourth quarter of 2011, as compared to the same period in 2010, due to higher earnings in foreign subsidiaries. As of December 31, 2011, Canexus LP has approximately $382 million of future tax deductions resulting from capital expenditures which can be used to shelter future taxable income in Canada. DTU Settlement: The conversion to a Corporation on July 8, 2011 triggered the settlement of the Director's Trust Unit Compensation Plan ("DTU"). Following payment on July 21, 2011, each of the Directors has reinvested the after-tax proceeds received in shares of the Corporation. Liquidity: As of December 31, 2011, total borrowings under committed credit facilities were $281 million with remaining available undrawn capacity of approximately $151 million. Cash on hand at December 31, 2011 was $2.6 million. We expect to be within our target debt-to-EBITDA range of 2.5 to 3.0 times (inclusive of convertible debentures) by the end of Q1 2012. Operating Results for the Periods Ended December 31, 2011 and 2010Three Months Ended December 31Year Ended December 312011201020112010Sales Revenue143,803120,278539,591457,357Cost of Sales (1)86,63786,035337,837319,381Gross Profit57,16634,243201,754137,976Distribution, Selling and Marketing22,96418,93188,69974,056General and Administrative (2)7,6327,29730,65629,240Operating Profit26,5708,01582,39934,680Finance Income (Expense)(652)3,304(33,481)(7,323)Income before Other Income (Expense) and Income Taxes25,91811,31948,91827,357Other Income (Expense)459(802)(1,547)3,899Income before Income Taxes26,37710,51747,37131,256Provision for (Recovery of) Income TaxesCurrent2,3905115,7054,715Deferred(590)4011,7571,3841,8009127,4626,099Net Income24,5779,60539,90925,157Notes:(1) Depreciation and amortization included for the three months and year ended December 31, 2011 of $10.5 million and $42.1 million respectively; depreciation and amortization included for the three months and year ended December 31, 2010 of $11.6 million and $33 million respectively. (2) Depreciation and amortization included for the three months and year ended December 31, 2011 of $0.2 million and $1 million respectively; depreciation and amortization included for the three months and year ended December 31, 2010 of $0.4 million and $1.7 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 March 9, 2012, to discuss the results. A Q4 2011 presentation will be available on our website to facilitate the conference call. Please call 416-644-3415 or 1-877-974-0445. The conference call will also be accessible via webcast at www.canexus.ca. A replay of the conference call will be available until midnight March 16, 2012. To access the replay, call 416-640-1917 or 1-877-289-8525, followed by passcode 4510969#.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. Readers should consult the Corporation's 2011 MD&A filed on SEDAR for a complete explanation of how the Corporation calculates each such non-GAAP measure. 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 the timing of completion of the current hydrochloric acid expansion and potential further expansion opportunities, including the potential volumes associated therewith, Canexus' corporate performance, pulp market stabilization and recovery, sodium chlorate demand and industry operating rates, MECU and hydrochloric acid prices, chlorine demand increases and its impact on industry capacity utilization, North American hydrochloric acid supply and the production of chlorine derivatives and the ability of Canexus to meet debt-to-EBITDA targets. 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 Corporation's Annual Information Form filed on the Corporation'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) 571-7300