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Press release from Marketwire

Canexus Corporation Announces Second Quarter Results

Canexus Increases Year-to-Date Cash Operating Profit by 26% Despite Lower Than Expected Quarterly Results

Thursday, August 09, 2012

Canexus Corporation Announces Second Quarter Results18:06 EDT Thursday, August 09, 2012CALGARY, ALBERTA--(Marketwire - Aug. 9, 2012) - Canexus Corporation (TSX:CUS) (the "Corporation" or "Canexus") today announced its financial results for the second quarter ended June 30, 2012. Highlights:Canexus recorded cash operating profit in the quarter of $22.9 million, which was lower than expected. Despite this our full year guidance is unchanged. Demand for both chlorine and hydrochloric acid were down significantly in the quarter, affecting chlorine netback prices and hydrochloric acid sales volumes. Weak demand for chlorine and a prolonged spring breakup affecting hydrochloric acid demand has resulted in lower year-to-date operating rates at North Vancouver, reducing produced caustic soda volumes available for sale. The combined impact of these items had a negative effect on the quarter of about $8.0 million. Metric electrochemical unit ("MECU") realized netback prices were down by 17% from first quarter levels. Higher fixed costs from planned maintenance at all of our plants (sodium chlorate and chlor-alkali) in both North and South America also reduced cash operating profit in the quarter (maintenance costs expensed in the quarter were $7.7 million). Distributable cash was $8.2 million ($0.07 per share) and $35.5 million ($0.29 per share) for the three and six months ended June 30, 2012, resulting in payout ratios of 203% and 93%, respectively. We continue to expect to generate $140.0 million to $145.0 million of cash operating profit for the full year (year-to-date cash operating profit is $63.2 million) for a payout ratio of 75% to 80%. Improved demand for hydrochloric acid and chlorine in the second half of the year should allow us to run our North Vancouver plant above 90% of practical capacity (210,000 MECU's/year), returning us to expected cash flow levels in this business. In July our plant ran at 93% of nameplate capacity (228,000 MECU's/year). The North American sodium chlorate business was slightly behind plan in the quarter due to maintenance outages at customer plants. Demand and pricing are expected to remain strong for the balance of the year. We have one remaining planned maintenance shutdown for four to five days in 2012 in Q3 at our low-cost Brandon sodium chlorate plant to coincide with the tie-in of the upgraded power line. This is expected to increase capacity modestly (2% to 3%) and paves the way for a meaningful future potential expansion. The $30.0 million project at our North American Terminal Operations ("NATO") business unit to increase diluted bitumen and crude oil ("DBCO") transloading capacity from 7,500 bbls/day to 35,000 bbls/day is on track for completion by year-end. By the end of the third quarter we expect DBCO transloading throughput to be 17,500 bbls/day increasing to 35,000 bbls/day in December. We continue to advance detailed engineering, have ordered pipe and commenced civil work at the site to potentially expand our terminal capabilities at Bruderheim to include pipeline connected unit train operations for large scale movements of diluted bitumen shipments from the terminal by rail and for receiving diluent shipments to the terminal by rail. Discussions with MEG Energy Corp. to connect the Canexus Bruderheim terminal with the MEG Energy Stonefell Terminal and potentially with other pipeline systems in the area are progressing. We are also in discussions with a number of potential customers for unit train movements.The Corporation's hydrochloric acid capacity expansion projects at its North Vancouver chlor-alkali facility are on track for start-up in the first and fourth quarters of 2013. These expansions will each add an additional 110,000 wet metric tonnes ("WMT") of capacity increasing our total hydrochloric acid capacity to 370,000 WMT's per year. The output from the first of the two expansions is sold out under multi-year contracts. The Board declared the regular quarterly dividend of $0.1368 per common share payable October 15, 2012 to shareholders of record on September 30, 2012."As expected, Canexus' second quarter results reflected planned maintenance shutdowns at all of our sodium chlorate and chlor-alkali plants in North and South America," said Gary Kubera, President and CEO. "However, we did not anticipate the weaker demand for hydrochloric acid ("HCl" or "acid") resulting from a prolonged spring breakup due to very wet weather affecting drilling and completion activities in the Swan Hills region through the entire second quarter, in addition to any impact on activity from lower oil prices." "Also, due to the tight supply for hydrochloric acid experienced late in 2011 and into the first quarter of 2012, a reasonable volume of expensive HCl was imported by others in tote containers that is currently being worked through. As a result, we have redirected some of our acid into the U.S. where the market has tightened due to reduced byproduct supply. We fully expect acid demand to improve in the oil and gas sector in Western Canada into the third and fourth quarters as drilling and completion activities are continuing to improve. We are also now entering the peak demand period for chlorine for water treatment. Looking ahead to the remainder of the year, and based on solid performance for July, we are on track to meet our full year guidance," he added.To facilitate a meaningful analysis and discussion of the Corporation's financial performance for the six months ended June 30, 2012, the following financial information for the six months ended June 30, 2011 has been prepared on a proforma basis to include the 100% financial results of Canexus Limited Partnership ("Canexus LP") for the period January 1, 2011 to February 6, 2011. On February 7, 2011, the Corporation's predecessor, Canexus Income Fund, indirectly acquired Nexen Inc's interest in Canexus LP and consolidated the 100% financial results of Canexus LP from that date.Distributable Cash Distributable cash of Canexus Corporation was $8.2 million ($0.07 per share) and $35.5 million ($0.29 per share) for the three and six months ended June 30, 2012 resulting in payout ratios of 203% and 93% respectively.Three Months Ended June 30Six Months Ended June 30CAD thousands2012201120122011Cash Operating Profit22,93528,74463,23050,297Interest Expense(4,969)(5,616)(10,639)(11,845)Realized Currency Translation Gains (Losses)(61)3,453(22)3,373Maintenance Capital Expenditures(7,446)(3,798)(11,500)(7,482)Provision for Current Income Taxes(819)(1,194)(2,731)(2,328)TCP Severance Costs Paid-(566)(888)(2,133)Other(1,456)(118)(1,954)92Distributable Cash8,18420,90535,49629,974Distributable Cash Per Share$0.07$0.18$0.29$0.26Dividends Declared Per Share$0.1368$0.1368$0.2736$0.2736Payout Ratio203%76%93%105%Below is a reconciliation of net cash generated from operating activities to Distributable Cash of the Corporation for the three and six months ended June 30, 2012 and 2011.Three Months Ended June 30Six Months Ended June 30CAD thousands2012201120122011Net Cash Generated from Operating Activities18,54614,44433,09829,930Changes in Non-Cash Operating Working Capital and Due to/from Affiliates, Net-8,68618,96910,487Non-Cash Change in Income Tax Payable and Interest Payable(2,131)1,465(3,762)(811)Interest Income138139195233Maintenance Capital Expenditures(7,446)(3,798)(11,500)(7,482)Realized Foreign Currency Translation Gains (Losses) on Cash(10)56725426TCP Severance Costs Paid-(566)(888)(2,133)Amortization of the Purchase Cost of Foreign Exchange Options(531)(82)(909)(293)Expenditures on Decommissioning Liabilities(257)(79)(393)(77)Operating Non-Cash Items(125)129661(306)Distributable Cash8,18420,90535,49629,974Segmented Information for the Three MonthsEnded June 30, 2012 and 2011 Canexus 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 second quarter performance by segment.CAD thousands, except as notedNorth AmericaThree Months Ended June 30, 2012Sodium ChlorateChlor-alkali (2)South AmericaOtherTotalSales Revenue56,11059,65825,368-141,136Cost of Sales33,27440,53721,49831495,623Distribution, Selling and Marketing7,40316,76530157825,047General and Administrative (1)2,9573,7489911,5159,211Operating Profit (Loss)12,476(1,392)2,578(2,407)11,255Add:Depreciation and Amortization included in Cost of Sales3,1965,7001,75535511,006Depreciation and Amortization included in General and Administrative--12176188Share-based Compensation Expense---486486Cash Operating Profit (Loss)15,6724,3084,345(1,390)22,935Cash Operating Profit Percentage28%7%17%-16%CAD thousands, except as notedNorth AmericaThree Months Ended June 30, 2011Sodium ChlorateChlor-alkali (2)South AmericaOtherTotalSales Revenue54,39250,73225,410-130,534Cost of Sales33,78028,49519,857(185)81,947Distribution, Selling and Marketing6,62915,26429741022,600General and Administrative (1)2,3933,0311,1496747,247Operating Profit (Loss)11,5903,9424,107(899)18,740Add:Depreciation and Amortization included in Cost of Sales3,5035,8071,458-10,768Depreciation and Amortization included in General and Administrative--11229240Share-based Compensation Recovery---(1,004)(1,004)Cash Operating Profit (Loss)15,0939,7495,576(1,674)28,744Cash Operating Profit Percentage28%19%22%-22%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.Business Unit HighlightsNorth America Sodium Chlorate:Q2 2012 versus Q1 2012: Sales revenue for the North America sodium chlorate segment decreased 6% to $56.1 million for the three months ended June 30, 2012 from $59.8 million for the three months ended March 31, 2012. Sales volumes decreased 7% and realized netback prices decreased 1% for the three months ended June 30, 2012. Sales volumes were impacted by both planned and unplanned maintenance at customer plants. Cash operating profit percentage decreased from 32% to 28% as a result of lower realized netback prices due to customer weighting, lower production volumes (primarily at our low-cost Brandon plant) and higher fixed costs as a result of planned maintenance shutdowns at all three of our North American sodium chlorate plants and slightly higher electricity costs. Q2 2012 versus Q2 2011: Sales revenue for the North America sodium chlorate segment increased 3% to $56.1 million for the three months ended June 30, 2012 from $54.4 million for the three months ended June 30, 2011 as result of a 5% increase in realized netback prices, partially offset by 3% lower sales volumes. Realized netback prices were positively affected by the weaker Canadian dollar (Q2 2012 - US $1.00 as compared to US $1.03 for Q2 2011). Cash operating profit percentage remained consistent at 28% with higher realized netback prices, slightly higher production volumes and lower salt costs being offset by higher fixed costs and slightly higher electricity costs. Price increases were announced for Q3 which should add modestly to netback prices across our system. We expect our plants to run at capacity for the balance of 2012. North America Chlor-alkali:Q2 2012 versus Q1 2012: Sales revenue for the North America chlor-alkali segment decreased 3% to $59.7 million for the three months ended June 30, 2012 from $61.3 million for the three months ended March 31, 2012. The decrease in sales revenue was primarily due to lower hydrochloric acid sales volumes (33%) and lower realized netback prices for hydrochloric acid (17%) and chlorine (85%), partially offset by higher chlorine sales volumes (45%). Cash operating profit percentage decreased from 26% to 7% for the three months ended June 30, 2012 as a result of lower MECU realized netback prices (17%), lower production volumes, higher fixed costs and slightly higher electricity costs, partially offset by slightly lower natural gas costs. The increase in fixed costs was due to the planned maintenance shutdown for two weeks in April 2012. Q2 2012 versus Q2 2011: Sales revenue for the North America chlor-alkali segment increased 18% to $59.7 million for the three months ended June 30, 2012 from $50.7 million for the three months ended June 30, 2011 due to higher realized netback prices for hydrochloric acid (102%) and caustic soda (25%) and higher caustic soda sales volumes (7%), partially offset by lower hydrochloric acid (27%) and chlorine (7%) sales volumes and lower chlorine realized netback prices (90%). Cash operating profit decreased from $9.7 million for the three months ended June 30, 2011 to $4.3 million for the three months ended June 30, 2012 as a result of lower production volumes (9,600 MECU's). This resulted in lower produced volumes of caustic soda sold, higher fixed costs, higher electricity and salt costs and a higher allocation of general and administrative expenses, partially offset by higher MECU realized netback prices (16%). Production volumes were lower and fixed costs were higher as a result of the planned maintenance shutdown in April 2012. As noted in the highlights section, we expect to operate our North Vancouver plant at higher rates for the balance of the year which should result in higher sales volumes of produced caustic soda and to meet higher acid demand, contributing to cash operating profit and also expect to see a slight to modest improvement in MECU netback prices. South America:Q2 2012 versus Q1 2012: Sales revenue for the South America segment decreased 9% to $25.4 million for the three months ended June 30, 2012 from $27.9 million for the three months ended March 31, 2012 on lower sales volumes for all products primarily as a result of a planned shutdown by our major customer as well as at our plants. Cash operating profit decreased from $6.8 million for the three months ended March 31, 2012 to $4.3 million for the three months ended June 30, 2012 primarily as a result of lower production volumes and higher fixed costs associated with planned maintenance shutdowns at both the sodium chlorate and chlor-alkali plants during the quarter. Q2 2012 versus Q2 2011: Sales revenue for the South America segment was consistent for the three months ended June 30, 2012 and 2011 at $25.4 million. Cash operating profit decreased from $5.6 million for the three months ended June 30, 2011 to $4.3 million for the three months ended June 30, 2012 primarily as a result of lower production volumes and higher fixed costs associated with planned maintenance shutdowns at both the sodium chlorate and chlor-alkali plants during the quarter. We expect our plants to run at or near capacity for the balance of the year. Market FundamentalsNorth America Sodium Chlorate: Pulp markets entered the second quarter building on momentum acquired in the latter part of the first quarter. Global pulp inventories fell to a year low in March at 31 days, and have since slowly climbed back to 34 days (June). Year-to-date global pulp shipments are higher by 0.6% (June) year-over-year supported by the strong shipments to China which are up an impressive 18% for the same period. This favorable environment provided producers with opportunities to promote price increases across most major pulp grades. However, as the quarter progressed, producers' price increase initiatives were met with resistance, due to additional material made available from Europe and lower than expected growth in China. Although June list prices remained unchanged, several major producers have settled on price reductions for the third quarter. Pulp pricing is expected to remain under pressure for the immediate term, but should stabilize later in the quarter and recover in the fourth quarter. Demand for sodium chlorate was relatively stable throughout the quarter, even as several pulp and paper producers took their annual downtime. Industry fundamentals were supportive of price increase initiatives during the quarter. Additional demand for chlorate will materialize in the second half of 2012 with the start-up of new fluff pulp capacity in the US in July and the recently announced restart of an idled NBSK mill in the fourth quarter. As such, chlorate industry operating rates are poised to remain strong, around the 95% level for the remainder of the year. North America Chlor-alkali: The North American chlor-alkali industry operated at an estimated 78% of capacity in the second quarter of 2012, compared with 85% in the prior quarter and 88% in the second quarter of 2011. The decrease in industry capacity utilization was due to significant planned production outages in May combined with reduced demand for PVC. Buyers of PVC reduced purchases in an attempt to push for lower prices after several months of increases. It remains unclear how much of the lower demand was due to the impact of global economic weakness versus PVC inventory destocking. Industry operating rates are expected to improve slightly in the third quarter due to an uptick in seasonal water treatment demand and recovering PVC demand later in the quarter.North American hydrochloric acid production decreased in the second quarter of 2012 due to lower operating rates from by-product supply (Methylene Diphenyl Diisocyanate ("MDI")/Toluene Diisocyanate ("TDI")/Fluorocarbon) which is expected to continue in the third and fourth quarters. Acid demand from oil and gas well fracturing in Western Canada was significantly reduced due to an early and extended spring breakup. Demand in this region is expected to improve significantly in the third quarter. North American caustic soda production decreased in the second quarter of 2012 consistent with lower chlorine operating rates. Demand remained strong from most consuming segments with an increase in demand from export markets taking advantage of the low cost position of US gulf coast production. MECU prices declined during the second quarter of 2012 due to erosion of prices for chlorine, acid and caustic. Price increases for caustic soda and hydrochloric acid have been announced for the third quarter.South America: Brazilian pulp exports were stable during the first five months of 2012 accompanied by an increase in global hardwood pulp inventories. Canexus Brazil`s major sodium chlorate customer's pulp production has been aligned with our estimate and our overall sodium chlorate sales are in line with our 2012 plan.In the first half of 2012, the Brazilian chlor-alkali capacity utilization rate was 84%, approximately 5% higher than the same period last year. Brazilian industry operating rates were lower in 2011 due to power outages and planned outages at several chlor-alkali facilities during the year. Canexus Brazil's chlor-alkali capacity utilization was 95% in the first half of 2012 driven by higher HCl sales as a result of lower spent acid availability in North Eastern Brazil due to the shutdown of a TDI facility in the region.Western Canadian Oil and Gas: Crude oil prices fell during the second quarter as global economies slowed. Production levels have been strong and supported by increasing North American shale oil production. Consequently, oil inventory levels in the U.S. and the Organisation for Economic Co-operation and Development (OECD) regions are above five year averages. Despite overall softening of price levels, price differentials between Western Canadian grades and other key benchmarks remain wide; supporting demand for rail based oil transportation services. Natural gas prices have remained weak as inventories remain well above five year average levels. Natural gas continues to be in oversupply due to new drilling techniques and warm winter conditions. As a result, natural gas drilling activity has fallen in North America. Drilling activity in Western Canada slowed significantly in the second quarter due to the seasonal spring thaw period in Western Canada which limits access to drilling leases with heavy equipment. These conditions were exacerbated in the second quarter due to the heavy rains experienced in Western Canada in addition to the normal thaw period.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 second quarter of 2012, we recorded an unrealized currency translation loss of $6.1 million as a result of the weakening of the Canadian dollar at the end of the quarter compared to the end of Q1 2012 (Q2/11 - $1.5 million unrealized loss and $2.9 million of realized gains on credit facility repayments). These amounts are included in finance income (expense). Interest expense in the quarter was $5.0 million (Q2/11 - $5.6 million). Interest capitalized on major projects was $0.2 million in Q2 2012 ($0.1 million in Q2/11). We recorded mark-to-market changes in fair value of convertible debentures of $0.5 million (gain) in Q2 2012 ($4.5 million gain in Q2/11). Other Income (Expense):In the second quarter, mark-to-market fair value losses of $0.9 million (Q2/11 - $0.1 million losses) and realized gains of $0.4 million (Q2/11 - $nil) were recorded on foreign exchange option contracts. In the second quarter, we recorded mark-to-market fair value gains of $0.3 million (Q2/11 - $nil) on interest rate swaps and realized losses of $0.3 million (Q2/11 - $0.4 million losses). In the second quarter, we recorded mark-to-market fair value losses on a cross currency swap of $0.4 million as a result of the weakening of the Canadian dollar at the end of the quarter compared to the end of Q1 2012. 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 June 30, 2012 were $25.9 million, of which $7.4 million was spent on maintenance projects and the balance on continuous improvement ($1.5 million) and expansion projects ($17.0 million). Expansion capital was spent on the continued development of our NATO site, the hydrochloric acid expansions at our North Vancouver facility and the power line upgrade at our Brandon plant. Provision for Income Taxes: The provision for income taxes is higher in the second quarter of 2011, as compared to the same period in 2012, due to higher earnings in that quarter. As of June 30, 2012, Canexus has approximately $465.0 million of future tax deductions resulting predominantly from capital expenditures which can be used to shelter future taxable income in Canada. Liquidity: As of June 30, 2012, total borrowings under committed credit facilities were $314.2 million with remaining available undrawn capacity of approximately $150.0 million. Cash on hand at June 30, 2012 was $3.8 million. Our debt-to-EBITDA ratio is 2.4 times (3.4 times inclusive of convertible debentures). Operating Results for the Three and Six Months Ended June 30, 2012 and 2011Three Months Ended June 30Six Months Ended June 302012201120122011Sales Revenue141,136130,534290,114256,510Cost of Sales (1)95,62381,947185,732169,339Gross Profit45,51348,587104,38287,171Distribution, Selling and Marketing25,04722,60046,18343,181General and Administrative (2)9,2117,24718,67416,166Operating Profit11,25518,74039,52527,824Finance Expense(11,913)(684)(23,589)(1,076)Income (Loss) before Other Income (Expense) and Income Taxes(658)18,05615,93626,748Other Income (Expense)(1,282)513(891)543Income (Loss) before Income Taxes(1,940)18,56915,04527,291Provision for Income TaxesCurrent8191,1942,7312,328Deferred1,0755,2315,8917,7311,8946,4258,62210,059Net Income (Loss)(3,834)12,1446,42317,232Notes:(1)Depreciation and amortization included for the three and six months ended June 30, 2012 - $11.0 million and $21.8 million respectively; depreciation and amortization included for the three and six months ended June 30, 2011 of $10.7 million and $21.5 million respectively.(2)Depreciation and amortization included for the three and six months ended June 30, 2012 - $0.1 million and $0.3 million respectively; depreciation and amortization included for the three and six months ended June 30, 2011 of $0.2 and $0.5 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 10:00 a.m. ET on Friday, August 10, 2012, to discuss the results. A Q2 2012 presentation will be available on our website to facilitate the conference call. Please dial 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 August 17, 2012. To access the replay, call 416-640-1917 or 1-877-289-8525, followed by passcode 4545687#.Non-GAAP Measures Cash 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 2012 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: chlorine and hydrochloric acid demand recovery and the impact on North Vancouver operating levels and chlorine netback prices; North American sodium chlorate demand, plant utilization and pricing; Canexus' corporate performance, including resultant expectations for cash operating profit and payout ratio; Brandon power line tie-in and its impact on plant capacity; the timing of and completion and capacity implications of capital projects at NATO; the timing of completion and capacity implications of the hydrochloric acid expansion project at Canexus' North Vancouver chlor-alkali facility; South American sodium chlorate and chlor-alkali plant activity; and expectations with respect to Canexus' ability, and sources of capital, to finance its growth projects. 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) 571-7300www.canexus.ca