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Press release from CNW Group

Chemtrade Logistics Income Fund Reports Solid 2012 Second Quarter Results

Wednesday, August 08, 2012

Chemtrade Logistics Income Fund Reports Solid 2012 Second Quarter Results17:00 EDT Wednesday, August 08, 2012TORONTO, Aug. 8, 2012 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and six months ended June 30, 2012.  It should be noted that the year over year comparisons reflect the acquisition of Marsulex in June 2011. Financial results for the second quarter and six months ended June 30, 2011 include only six days of operations of the acquired businesses and the costs of the acquisition. The second quarter 2012 financial statements and MD&A will be available on Chemtrade's website at www.chemtradelogistics.com and on SEDAR at www.sedar.com.Distributable cash after maintenance capital expenditures for the second quarter was $24.0 million, or $0.58 per unit (2011:  $1.0 million, or $0.03 per unit), generated from revenue of $227.6 million (2011:  $195.3 million).  The primary reason for the increase in revenues was the inclusion of revenues of the acquired businesses.  Revenues also benefited from increased volume and higher prices for sulphuric acid in North America compared with the second quarter of last year.  Adjusted cash flow from operating activities for the period was $30.3 million (2011:  $5.1 million).  EBITDA for the second quarter was $36.9 million (2011:  $7.7 million, including $13.2 million of acquisition costs) and net earnings were $8.5 million compared with $35.6 million in the same period in 2011. The lower earnings for the second quarter of 2012 resulted primarily from an income tax recovery of $37.5 million recorded in the second quarter of 2011.For the six months ended June 30, 2012, distributable cash after maintenance capital expenditures was $48.3 million (2011:  $25.4 million), or $1.16 per unit (2011:  $0.82 per unit) generated from revenue of $455.5 million (2011: $364.8 million). EBITDA was $71.0 million (2011:  $36.3 million).  Adjusted cash flow from operating activities was $57.7 million (2011:  $31.0 million), and net earnings for the first six months of 2012 were $12.7 million (2011:  $49.0 million, including the income tax recovery of $37.5 million).Mark Davis, President and Chief Executive Officer of Chemtrade, said, "Demand from our customer base in North America remained stable during the second quarter, enabling most of our businesses to post solid performances.  We continue to implement business improvement initiatives and benefit from our enhanced size and scale. We still expect to spend approximately $35.0-40.0 million for capital expenditures for the year.  However, the timing of certain capital projects planned for the first half of the year has slipped into the second half, and our distributable cash numbers for the first half of the year benefitted from this slippage in time."SPPC generated revenue of $153.1 million and EBITDA of $39.2 million for the second quarter of 2012 compared with $104.6 million and $20.6 million, respectively, in 2011.  The main reason for the increase in both was the inclusion of the acquired businesses.  Additionally, higher prices and volume for sulphuric acid had a positive impact.Pulp Chemicals reported second quarter 2012 revenue of $11.4 million compared with $13.0 million in 2011, primarily due to lower demand from a customer that experienced plant outages during the quarter. EBITDA for the second quarter was $2.0 million, which was $1.4 million lower than the level generated during the second quarter of 2011.International reported revenue of $63.1 million for the second quarter of 2012, compared with $77.7 million in 2011.  This reflected lower volume and lower prices for sulphuric acid.  EBITDA for the second quarter of 2012 was $2.8 million compared with $3.9 million in the second quarter of 2011.Corporate costs during the second quarter of 2012 were $7.2 million, which was approximately $12.9 million lower than the second quarter of 2011.  The main reason for the decrease was the $13.2 million of acquisition costs in the second quarter of 2011, partially offset by higher costs incurred during the second quarter of 2012 due to the increased scale of corporate services resulting from the acquisition.Mr. Davis said, "We continue to enhance our businesses with both capital and non-capital initiatives which position us to benefit from improvements in the economy.  Our risk-sharing business model provides security to our operations and distributions in economic downturns by increasing the stability of our cash flows. In this way, we seek to create a resilient business that succeeds in both good and bad economic conditions."DistributionsDistributions declared in the second quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit.New TrusteeChemtrade also announced today that Susan J. McArthur has been appointed a Trustee of the Fund. Ms. McArthur is a Senior Investment Banker at Jacob Securities Inc., Toronto.  She also serves as Chair of the Board of Management for the Canada Revenue Agency and is a director of First Capital Realty Inc., a TSX-listed real estate company. Ms. McArthur has extensive corporate advisory experience and previously held positions with Rothschild Canada Limited in Toronto, Lazard Freres & Co. in New York and Paris, and The First Boston Corporation in New York.Caution Regarding Forward-Looking StatementsCertain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario).  Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe" and similar expressions.  Specifically, forward-looking statements in this news release include statements respecting certain future expectations about:  demand for commodities, products and services; capital expenditures; the effectiveness of the Fund's business model and the sustainability of the Fund's distributions.  Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof.  These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "RISK FACTORS" section of the Fund's latest Annual Information Form and the "RISKS AND UNCERTAINTIES" section of the Fund's most recent Management's Discussion & Analysis.Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.  With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding:  there being no significant disruptions affecting the operations of the Fund and its subsidiaries, whether due to labour disruptions, supply disruptions, power disruptions, transportation disruptions, damage to equipment or otherwise; the ability of the Fund to obtain products, raw materials, equipment, transportation, services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Fund's expectations; the timely receipt of required regulatory approvals; the cost of regulatory and environmental compliance being consistent with current levels or in line with the Fund's expectations; the ability of the Fund to successfully access tax losses and tax attributes; the ability of the Fund to obtain financing on acceptable terms; currency, exchange and interest rates being consistent with current levels or in line with the Fund's expectations; and global economic performance.The Fund disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.  The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.A conference call to review the second quarter 2012 results will be webcast live on www.chemtradelogistics.com and www.newswire.ca/en/webcast on Thursday, August 9, 2012 at 9.00 a.m. ET.SOURCE: Chemtrade Logistics Income FundFor further information: Mark Davis  President and CEO Tel:  (416) 496-4176 Rohit Bhardwaj Vice-President, Finance and CFO Tel: (416) 496-4177