The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Canexus Corporation Announces Second Quarter Results

Board Approves Expansion of Unit Train Capacity at NATO

Wednesday, August 07, 2013

Canexus Corporation Announces Second Quarter Results

19:36 EDT Wednesday, August 07, 2013

CALGARY, ALBERTA--(Marketwired - Aug. 7, 2013) - Canexus Corporation (TSX:CUS) (the "Corporation" or "Canexus") today announced its financial results for the second quarter ended June 30, 2013.

Highlights:

  • Cash Operating Profit was $19.3 million for the three months ended June 30, 2013 ($23.0 million in the second quarter of 2012, and $30.3 million for the first quarter of 2013). Year-to-date Distributable Cash was $27.9 million ($0.20 per common share), resulting in a payout ratio of 140%.

  • On July 22, 2013, Canexus announced that it had entered into long-term agreements with Inter Pipeline Fund ("Inter Pipeline") and Inter Pipeline Polaris Inc. for the delivery of bitumen blend from the Cold Lake pipeline system to Canexus' Bruderheim Terminal ("Bruderheim Terminal") for loading into unit trains. Under the terms of the agreements, Canexus is guaranteed a capacity allotment of up to 100,000 barrels of Cold Lake Blend pipeline delivery per day. Canexus also announced that it had entered into a multi-year agreement with Cenovus Energy Inc. ("Cenovus") for bitumen blend pipeline receiving and unit train loading services at the Bruderheim Terminal.

  • Significant progress is being made on the pipeline connected unit train expansion at the Corporation's North American Terminal Operations ("NATO") at Bruderheim, Alberta. The Canexus Bruderheim Terminal is being connected with pipelines that interconnect with the MEG Energy Stonefell Terminal. Commissioning of the Bruderheim Terminal is expected to occur in the fourth quarter. With the recent announcement for the guaranteed capacity allotment from the Cold Lake pipeline system, and the pipeline receiving and unit train loading services agreement with Cenovus, the Board of Directors today approved the staged expansion to increase capacity of the Canexus Bruderheim Terminal from seven to 13 unit trains per week. The capacity expansion is expected to be operational by mid-2014. The total estimated cost of the pipeline connected unit train facility is $225 million (inclusive of capital spending to facilitate large scale movements of condensate from rail to pipeline in the future). Canexus continues to make solid progress with additional potential customers for unit train shipments under multi-year, take-or-pay terms. Operating cash flow from unit train operations, assuming 11 unit trains per week, could exceed $50 million annually. Unit train operations will have access to both Canadian Pacific and Canadian National Railway systems on start-up.

  • The expansion of diluted bitumen and crude oil ("DBCO") truck-to-rail transload capacity at NATO (to 30,000 bbls/day) is expected to be completed in August. With two of our main loading tracks out-of-service for various periods of time in the quarter for expansion, Canexus transloaded about 14,500 bbls/day of DBCO in the second quarter. One of the two main loading tracks being expanded was turned over to operations in June. The other loading track is currently out-of-service for installation of the remaining storage tanks and modernized loading rack.

  • Canexus' chlor-alkali results were affected by the extended plant shutdown in April and weakness in caustic soda and hydrochloric acid markets discussed in the May 8, 2013 and July 22, 2013 press releases. Caustic soda pricing has improved marginally in the third quarter and we expect to see continued improvement in the fourth quarter. Hydrochloric acid demand and pricing for the balance of the year is dependent upon higher activity levels in the oil and gas segment in Western Canada. The current higher oil price environment and a weaker Canadian dollar should help support activity levels.

  • The North American sodium chlorate business experienced slightly lower demand in the quarter due to unplanned downtime at pulp customers. North American pulp production is expected to continue to be strong for the balance of 2013 and 2014, supporting high sodium chlorate industry operating rates. The Corporation is currently analysing additional de-bottleneck opportunities at its low-cost Brandon plant.

  • Canexus' Brazil operations continue to be very stable with solid demand from its primary customer as well as from the merchant market for sodium chlorate as well as chlorine and chlorine derivatives.

  • The Board of Directors declared the regular quarterly dividend of $0.1368 per common share payable October 15, 2013 to shareholders of record on September 30, 2013.

"Our financial performance in the first half of 2013 has been disappointing," said Gary Kubera, President and CEO. "Market conditions for our chlor-alkali business will continue to be challenging in the second half of the year. Despite expectations for lower hydrochloric acid prices, this business will benefit from the capacity expansions just being completed. Both our North American sodium chlorate business and Brazil operations are performing well and market conditions should support strong business performance over the balance of the year and for 2014. The market fundamentals for oil-by-rail movements are solid and Canexus expects NATO to contribute meaningful results for shareholders as major capital projects are completed," he added.

Distributable Cash

Distributable cash of Canexus Corporation was $6.0 million ($0.04 per common share) for the quarter resulting in a payout ratio of 342%.

Three Months Ended June 30 Six Months Ended June 30
CAD thousands, except as noted 2013 2012 2013 2012
Cash Operating Profit 19,254 22,976 49,527 63,279
Interest Expense (3,159 ) (4,969 ) (6,644 ) (10,639 )
Realized Foreign Currency Translation Gains (Losses) (782 ) (61 ) 43 (22 )
Maintenance Capital Expenditures (5,837 ) (7,446 ) (10,394 ) (11,500 )
Provision for Current Income Taxes (1,600 ) (819 ) (2,836 ) (2,731 )
Technology Conversion Project ("TCP") Severance Costs Paid (63 ) - (274 ) (888 )
Cumulative Pension Funding in Excess of Pension Expense (1,682 ) (665 ) (673 ) (397 )
Other (133 ) (832 ) (811 ) (1,606 )
Distributable Cash 5,998 8,184 27,938 35,496
Distributable Cash Per Share 0.04 0.07 0.20 0.30
Dividends Declared Per Share 0.1368 0.1368 0.2736 0.2736
Payout Ratio 342 % 203 % 140 % 93 %

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, 2013 and 2012.

Three Months Ended June 30 Six Months Ended June 30
CAD thousands 2013 2012 2013 2012
Net Cash Generated from Operating Activities 12,673 18,546 37,842 33,098
Changes in Non-Cash Operating Working Capital 824 - 3,135 18,969
Non-Cash Change in Income Tax Payable and Interest Payable (1,503 ) (2,131 ) (3,199 ) (3,762 )
Interest Income 91 138 181 195
Maintenance Capital Expenditures (5,837 ) (7,446 ) (10,394 ) (11,500 )
Realized Foreign Currency Translation Gains (Losses) on Cash 298 (10 ) 832 25
TCP Severance Costs Paid (63 ) - (274 ) (888 )
Purchase of Foreign Exchange Options - - 512 -
Amortization of the Purchase Cost of Foreign Exchange Options (208 ) (531 ) (208 ) (909 )
Expenditures on Decommissioning Liabilities (65 ) (257 ) (213 ) (393 )
Operating Non-Cash Items (212 ) (125 ) (276 ) 661
Distributable Cash 5,998 8,184 27,938 35,496

Segmented Information for the Three-Month Periods Ended June 30, 2013 and 2012

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 NATO terminal in Bruderheim, Alberta as a separate business unit. Below is our second quarter performance by segment.

North America
Three Months Ended
June 30, 2013
Sodium
Chlorate
Chlor-
alkali
South America
NATO

Other

Total
Sales Revenue
Total Segment 53,882 46,547 27,646 5,774 - 133,849
Inter-Segment 92 - - 516(1) - 608
Total Sales Revenue from External Customers 53,790 46,547 27,646 5,258 - 133,241
Cost of Sales 32,577 32,197 22,631 4,900 12 92,317
Distribution, Selling and Marketing
Total Segment 7,332 15,642 255 1,304 749 25,282
Inter-Segment - 608 - - - 608
Total External Distribution, Selling and Marketing 7,332 15,034 255 1,304 749 24,674
General and Administrative 2,655 3,240 1,129 127 2,906 10,057
Operating Profit (Loss) 11,226 (3,924 ) 3,631 (1,073 ) (3,667 ) 6,193
Add:
Depreciation and Amortization 3,331 5,745 1,912 1,182 242 12,412
Share-based Compensation Expense - - - - 649 649
Cash Operating Profit (Loss) 14,557 1,821 5,543 109 (2,776 ) 19,254
Cash Operating Profit Percentage 27 % 4 % 20 % 2 % - 14 %
North America
Three Months Ended
June 30, 2012
Sodium
Chlorate
Chlor-alkali South America NATO
Other

Total
Sales Revenue
Total Segment 56,193 57,133 25,368 2,037 - 140,731
Inter-Segment 83 - - 417(1) - 500
Total Sales Revenue from External Customers 56,110 57,133 25,368 1,620 - 140,231
Cost of Sales 33,282 38,317 21,498 2,228 314 95,639
Distribution, Selling and Marketing
Total Segment 7,403 15,903 301 392 580 24,579
Inter-Segment - 500 - - - 500
Total External Distribution, Selling and Marketing 7,403 15,403 301 392 580 24,079
General and Administrative 2,957 3,607 991 141 1,520 9,216
Operating Profit (Loss) 12,468 (194 ) 2,578 (1,141 ) (2,414 ) 11,297
Add:
Depreciation and Amortization 3,196 5,110 1,767 590 530 11,193
Share-based Compensation Expense - - - - 486 486
Cash Operating Profit (Loss) 15,664 4,916 4,345 (551 ) (1,398 ) 22,976
Cash Operating Profit (Loss) Percentage 28 % 9 % 17 % (34 %) - 16 %
Note:
(1) NATO charges a transloading fee (an approximation of market rates charged by third party terminals) to the North America Chlor-Alkali ("NACA") business unit for hydrochloric acid and caustic soda transloaded from railcars into trucks for delivery to NACA customers that is eliminated for financial reporting purposes.

Highlights for each business unit are as follows:

  • North America Sodium Chlorate:

  • Q2 2013 versus Q1 2013: Sales revenue for the North America sodium chlorate segment decreased 9% to $53.8 million for the three months ended June 30, 2013 from $58.9 million for the three months ended March 31, 2013. The decrease in sales revenue was due to lower sales volumes (10%), partially offset by an increase in realized netback prices (2%). Cash Operating Profit Percentage remained consistent at 27% with lower production volumes from our Brandon plant being offset by higher realized netback prices, slightly lower fixed costs and a lower corporate allocation of general and administrative costs.

  • Q2 2013 versus Q2 2012: Sales revenue for the North America sodium chlorate segment decreased 4% to $53.8 million for the three months ended June 30, 2013 from $56.1 million for the three months ended June 30, 2012 as a result of a decrease in sales volumes (7%), partially offset by an increase in realized netback prices (2%). Cash Operating Profit Percentage decreased from 28% for the three months ended June 30, 2012 to 27% for the three months ended June 30, 2013, primarily as a result of higher electricity and salt costs, partially offset by higher realized netback prices, lower fixed costs and a lower corporate allocation of general and administrative costs.

  • North America Chlor-alkali:

  • Q2 2013 versus Q1 2013: Sales revenue for the North America chlor-alkali segment decreased 13% to $46.5 million for the three months ended June 30, 2013 from $53.6 million for the three months ended March 31, 2013. The decrease in sales revenue was primarily due to lower hydrochloric acid sales volumes (17%) and realized netback prices (31%), and lower caustic soda sales volumes (3%) and realized netback prices (7%), partially offset by higher chlorine sales volumes (10%) and realized netback prices (37%). Cash Operating Profit Percentage decreased from 19% for the three months ended March 31, 2013 to 4% for the three months ended June 30, 2013 as a result of lower MECU realized netback prices (15%), higher salt, electricity and natural gas costs and higher fixed costs due to a planned maintenance shutdown which was extended by nine days as a result of equipment failure during attempted start-up of the plant, partially offset by lower caustic soda purchased product costs.

  • Q2 2013 versus Q2 2012: Sales revenue for the North America chlor-alkali segment decreased 19% to $46.5 million for the three months ended June 30, 2013 from $57.1 million for the three months ended June 30, 2012 due to lower caustic soda sales volumes (10%) and realized netback prices (15%), lower chlorine sales volumes (13%) and lower hydrochloric acid realized netback prices (39%), partially offset by higher hydrochloric acid sales volumes (50%). Cash Operating Profit Percentage decreased from 9% for the three months ended June 30, 2012 to 4% for the three months ended June 30, 2013 as a result of lower MECU realized netback prices (12%) and higher salt, electricity and natural gas costs, partially offset by lower caustic soda purchased product costs and lower fixed costs.

  • South America:

  • Q2 2013 versus Q1 2013: Sales revenue for the South America segment increased 14% to $27.6 million for the three months ended June 30, 2013 from $24.2 million for the three months ended March 31, 2013. The increase in sales revenue was primarily due to higher sodium chlorate sales volumes (15%) and higher sodium chlorate (10%) and caustic soda (8%) realized netback prices, partially offset by lower caustic soda (6%) and hydrochloric acid (11%) sales volumes. Cash Operating Profit Percentage decreased from 25% for the three months ended March 31, 2013 to 20% for the three months ended June 30, 2013 primarily as a result of lower chlor-alkali production volumes, higher electricity costs, higher purchased product costs and higher fixed costs, partially offset by higher realized netback prices for products sold into the merchant market.

  • Q2 2013 versus Q2 2012: Sales revenue for the South America segment increased 9% to $27.6 million for the three months ended June 30, 2013 from $25.4 million for the three months ended June 30, 2012. The increase in sales revenue was due to higher sodium chlorate (12%), chlorine (24%) and sodium hypochlorite (6%) sales volumes, and higher sodium hypochlorite (9%) and caustic soda (2%) realized netback prices, partially offset by lower hydrochloric acid sales volumes (9%). Cash Operating Profit Percentage increased to 20% for the three months ended June 30, 2013 from 17% for the three months ended June 30, 2012 as a result of higher realized netback prices for products sold into the merchant market, higher sodium chlorate production and lower fixed costs, partially offset by higher purchased product costs.

  • North American Terminal Operations:

  • Q2 2013 versus Q1 2013: Cash Operating Profit for the three months ended June 30, 2013 was $0.63 million, inclusive of transloading services for inter-segment chlor-alkali products, as compared to $0.25 million for the three months ended March 31, 2013. External sales revenue increased 15% for the three months ended June 30, 2013 as compared to the three months ended March 31, 2013, primarily as a result of an increase in the number of railcars transloaded (12%).

  • Cost of sales comprises employee costs and other costs of operating the Bruderheim Terminal. The increase in cost of sales for the three months ended June 30, 2013, as compared to the three months ended March 31, 2013, was primarily due to an increase in utilities and the number of employees as a result of an increase in transload volumes in the quarter. Distribution, selling and marketing costs were favourable as compared to the three months ended March 31, 2013 primarily due to process improvements resulting in lower truck wait time charges.

  • Q2 2013 versus Q2 2012: Cash Operating Profit for the three months ended June 30, 2013 was $0.63 million, inclusive of transloading services for inter-segment chlor-alkali products, as compared to a loss of ($0.13) million for the three months ended June 30, 2012. External sales revenue increased 225% for the three months ended June 30, 2013, as compared to the three months ended June 30, 2012, primarily as a result of an increase in the number of railcars transloaded (79%) combined with higher transload fees.

  • The increase in cost of sales for the three months ended June 30, 2013, as compared to the three months ended June 30, 2012, was primarily due to an increase in the number of employees as a result of an increase in transload volumes in the quarter. The increase in distribution, selling and marketing costs was due to an increase in the number of selling and marketing employees and increased railcar lease costs as a result of higher transload volumes.

General Market Fundamentals

North America Sodium Chlorate: Global market pulp dynamics remained favorable throughout the second quarter of 2013. Despite slightly lower shipments to China from World-20 suppliers, year-to-date global pulp shipments were higher by 1.8% compared to the same period in 2012. Combined producer inventories for June remained relatively constant with historical averages at 34 days. Softwood pulp inventories continue to suggest a balanced market at 28 days, while hardwood inventories are slightly higher than historical averages at 40 days. Stable demand for pulp combined with planned maintenance downtime in both North and South America, contributed to positive market conditions and also provided support for further price appreciation in most pulp grades. New capacity coming on line in Eastern Europe and South America in the second half of the year is expected to result in increases to pulp inventories, which suggests an erosion of pulp pricing gains made during the first half of the year. Outside of strong demand for pulp in the tissue market, most other segments related to North American downstream paper are showing demand declines, most notably uncoated freesheet, which is down 4.3% through May.

As expected, demand for sodium chlorate in the second quarter of 2013 was impacted by North American mills annual maintenance shutdowns and was slightly lower than the first quarter of 2013 but it is expected to remain stable for the remainder of the year. Exports of sodium chlorate from North America for the first four months of 2013 were strong and suggest annual export volumes consistent with those achieved in 2012. Operating rates for the North American sodium chlorate industry are estimated to remain between 93% and 94% for the remainder of the year.

North America Chlor-alkali: The North American chlor-alkali industry operated at an estimated 85% of capacity in the second quarter of 2013, compared to 83% in the first quarter of 2013 and 80% in the second quarter of 2012. Domestic Polyvinyl Chloride ("PVC") demand is gradually improving and export demand for PVC and isocyanates remains strong. Domestic demand is 2.1% higher (June YTD) compared to 2012 levels. Chlorine utilization rates are expected to approximate 85% through the third quarter of 2013.

North American caustic soda supply was balanced with demand in the second quarter of 2013. Export supply from Asia to the west coast remained readily available, while exports from Europe to the east coast were limited. Declining PVC prices in China have put pressure on caustic export prices, but to date this trend has resulted in only modest price improvement in the North American west coast market.

North American hydrochloric acid supply was balanced with demand in the second quarter of 2013 due to several production outages at both byproduct and burner producer sites, offsetting seasonal demand declines in the Canadian oil and gas sector and sluggish steel production.

North American MECU prices were unchanged in the second quarter of 2013. Chlorine market price increases were announced for the second quarter but not implemented due to a lack of producer support and no movement is expected in the third quarter. Downward pressure on PVC prices in Asia resulted in higher caustic soda price nominations for export cargo during the second quarter of 2013 but minimal volume was contracted at these higher prices. Most North American producers have announced a market price increase for caustic soda for implementation in the third quarter of 2013. Hydrochloric acid price erosion was halted in the second quarter of 2013 with a market price increase announcement by most suppliers consistent with an improved supply and demand balance.

South America: Brazilian pulp production for the first five months of 2013 was 3.9% higher than the same period in 2012 and Brazilian exports were 9.4% higher for the same period. Downward pricing pressure is expected in the fourth quarter of 2013 due to new pulp capacity but is expected to be partially offset by the weakening of the Brazilian Real compared to the US Dollar.

Canexus Brazil`s major sodium chlorate customer had higher than expected sodium chlorate demand in the second quarter of 2013 due to higher pulp production levels. Canexus Brazil`s sodium chlorate plant production was above planned levels in the second quarter of 2013 due to the postponement of a shutdown and higher sales to the merchant market.

In the first five months of 2013, the Brazilian Chlor-alkali industry capacity utilization rate was 84.5%, 1.2% lower than the same period in 2012, due to manufacturing issues at two key producers. Canexus Brazil`s Chlor-alkali capacity utilization was 95% during the first half of 2013 which was in line with expectations.

Oil & Gas: Benchmark crude oil (Brent, WTI) price differentials significantly tightened during the second quarter of 2013 due to lower Brent prices. Western Canadian prices also appreciated meaningfully during the same period. Brent prices constricted due to weak seasonal demand and elevated inventory levels. Infrastructure de-bottlenecking, pipeline expansions, and increased rail movements firmed WTI pricing over the quarter. Price differentials between Western Canadian grades and other key benchmarks appreciated significantly during the second quarter of 2013 driven by factors specific to the Alberta marketplace, contributing to lower demand for outbound pipeline capacity, that are believed to be short term in nature. Fourth quarter 2013 and beyond, future market differentials remain wide enough to support strong demand for rail-based oil transportation services as pipeline capacity will lag new oil sands production in the near to mid-term.

Natural gas prices were stable over the second quarter of 2013. Production is expected to continue to decline slightly in North America for the remainder of 2013, while prices are expected to increase modestly in the mid to long term.

Drilling activity marginally increased in the second quarter but was somewhat constrained by a wet spring. We continue to see a transition to horizontal drilling with oil favoring gas. Second quarter 2013 completions dipped due to seasonality but drilling licenses increased over first quarter levels. Marginally improved levels of drilling activity support demand for hydrochloric acid.

Financial Updates

  • Long-term Debt and Finance Income (Expense):

    • Canexus borrows in US dollars, which creates unrealized currency translation losses as the Canadian dollar weakens. A substantial portion of our revenues are denominated in or referenced to the US dollar. During the second quarter of 2013, we recorded an unrealized currency translation loss of $10.0 million as a result of the weakening of the Canadian dollar at the end of the quarter compared to the end of Q1/13 (Q2/12 - $6.1 million unrealized loss). These amounts are included in finance income (expense).

    • Interest expense in the quarter was $3.2 million (Q2/12 - $5.0 million). Interest capitalized on major projects was $1.4 million in Q2/13 (Q2/12 - $0.2 million).

  • Other Income (Expense):

    • In the second quarter of 2013, mark-to-market fair value losses of $0.4 million (Q2/12 - $0.9 million) and realized gains of $Nil (Q2/12 - $0.4 million) were recorded on forward foreign exchange contracts, foreign exchange option contracts and average rate range forward contracts. In June, we entered into average rate range forward contracts to sell US $5 million between US $0.9615 and US $0.9376 for October; US $0.9615 and US $0.9372 for November; and US $0.9709 and $0.9346 for December.

    • In the second quarter of 2013, we recorded mark-to-market fair value losses on a cross currency swap of $0.5 million as a result of the weakening of the Canadian dollar at the end of the quarter compared to the end of Q1/13 (Q2/12 - $0.4 million). In Q3/11, we entered into a cross currency swap to effect the payment of interest in US dollars on the Series IV Convertible Debentures issued on June 30, 2011.

    • In the second quarter of 2013, we recorded mark-to-market fair value gains of $0.4 million (Q2/12 - $0.3 million) and realized losses of $0.1 million (Q2/12 - $0.3 million) on interest rate swaps. The interest rate swaps expired on April 10, 2013.

  • Capital Expenditures: Capital expenditures for the three months ended June 30, 2013 were $50.2 million, of which $5.8 million was spent on maintenance projects, $1.5 million on continuous improvement projects and the balance on expansion projects ($42.9 million). Expansion capital was spent on the continued development of our NATO site and hydrochloric acid expansions at our North Vancouver facility.

  • Provision for Income Taxes: Provision for income taxes is lower in the second quarter of 2013, as compared to the same period in 2012, due to lower income in the taxable legal entities included in the companies comprising the Corporation in Q2/13 as compared to Q2/12. As of June 30, 2013, the Corporation had approximately $596 million of future tax deductions resulting from capital expenditures which can be used to shelter future taxable income in Canada.

  • Liquidity: As of June 30, 2013, total borrowings under committed credit facilities were $274 million with remaining available undrawn capacity of approximately $150 million. Cash on hand at June 30, 2013 was $2.3 million.

Operating Results for the Three and Six Months Ended June 30, 2013 and 2012
Three Months Ended June 30 Six Months Ended June 30
CAD thousands 2013 2012 2013 2012
Sales Revenue 133,241 140,231 274,476 289,209
Cost of Sales(1) 92,317 95,639 180,883 185,763
Gross Profit 40,924 44,592 93,593 103,446
Distribution, Selling and Marketing 24,674 24,079 49,985 45,185
General and Administrative(2) 10,057 9,216 19,550 18,686
Operating Profit 6,193 11,297 24,058 39,575
Finance Expense (19,955 ) (12,166 ) (33,911 ) (24,095 )
Other Income (Expense) (57 ) (1,345 ) 556 (984 )
Income (Loss) Before Income Taxes (13,819 ) (2,214 ) (9,297 ) 14,496
Provision for (Recovery of) Income Taxes
Current 1,600 819 2,836 2,731
Deferred (652 ) 1,005 (763 ) 5,751
948 1,824 2,073 8,482
Net Income (Loss) (14,767 ) (4,038 ) (11,370 ) 6,014
Notes:
(1) Depreciation and Amortization included in the three and six months ended June 30, 2013 - $12.2 million and $23.7 million, respectively; Depreciation and Amortization included for the three and six months ended June 30, 2012 - $11.0 million and $21.8 million, respectively.
(2) Depreciation and Amortization included for the three and six months ended June 30, 2013 - $0.2 million and $0.5 million, respectively; Depreciation and Amortization included for the three and six months ended June 30, 2012 - $0.2 million and $0.4 million, respectively.

Financial Statements, Conference Call and Webcast

Financial Statements and Management's Discussion and Analysis will be posted on the Canexus website at www.canexus.ca and filed on SEDAR. Management will host a conference call at 10 a.m. ET on August 8, 2013, to discuss the results. A Q2 2013 presentation will be available on our website to facilitate the conference call. Please call 416-644-3419 or 1-877-974-0447. 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 15, 2013. To access the replay, call 416-640-1917 or 1-877-289-8525, followed by passcode 4633140#.

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 Statements

This news release contains forward-looking statements and information relating to expected future events relating to Canexus and its subsidiaries, including with respect to: timing of commissioning of the Bruderheim Terminal; timing of capacity expansion at the Bruderheim Terminal and the potential cash flow implications thereof under certain scenarios; timing of expansion of DBCO transload capacity and the capacity thereof; cost of the pipeline connected unit train facility at Bruderheim; expectations for caustic soda price improvements; the impact of new capacity on pulp inventories and pulp pricing and pulp production expectations for 2013 and 2014 and their impact on demand for and industry operating rates for the remainder of 2013 for the North American sodium chlorate business; expectations for MECU pricing through the third quarter of 2013; expectations for market conditions for the chlor-alkali business and the impact of capacity expansions thereon; the significance of expected results from NATO as capital projects are completed; North American chlor-alkali utilization rates through the third quarter of 2013; expectations for pricing pressure due to higher pulp capacity and the impact of Brazilian Real to US Dollar exchange rate thereon in South America; natural gas production for the remainder of 2013 and price expectations for the medium to long term; the impact of oil price differentials on rail-based oil transportation services in 2013 and beyond; expectations regarding oil prices and drilling activity levels, and their impact on hydrochloric acid demand in Western Canada.
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 Canexus

Canexus 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:

Contact Information:
Canexus Corporation
Gary Kubera
President and CEO
(403) 571-7300


Canexus Corporation
Richard McLellan
CFO
(403) 571-7300

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections