TORONTO--(BUSINESS WIRE)--May 11, 2026--
Chemtrade Logistics Income Fund (TSX: CHE.UN, OTCQX$(R)$: CGIFF) ("Chemtrade" or the "Fund") today announced results for the three-month period ended March 31, 2026. The financial statements and MD&A will be available on Chemtrade's website at www.chemtradelogistics.com and on SEDAR+ at www.sedarplus.com.
First Quarter 2026 Highlights
-- Revenue of $503.0 million, an increase of $36.7 million or 7.9%
year-over-year driven by the Polytec acquisition in the WS segment as
well as higher selling prices for merchant acid, sulphur products and
Regen acid in the ASP segment. This more than offset lower selling prices
and volumes of chlor-alkali products and sodium chlorate in the EC
segment.
-- Adjusted EBITDA(1) of $113.5 million, a decrease of $6.6 million or
5.5% year-over-year. Excluding the impact of foreign exchange, Adjusted
EBITDA was 0.5% lower than 2025 as EBITDA from the Polytec acquisition
and higher EBITDA from merchant and Regen acid were more than offset by
lower selling prices and volumes of chlor-alkali products and sodium
chlorate.
-- Net earnings of $25.4 million, a decrease of $23.7 million
year-over-year primarily due to higher finance costs, unfavourable
unrealized foreign exchange losses and lower Adjusted EBITDA
year-over-year.
-- Cash flows from operating activities of $42.4 million, an increase of
$8.0 million or 23.3% year-over-year, mainly due to a decrease in working
capital compared to 2025, partially offset by lower Adjusted EBITDA.
-- Distributable cash after maintenance capital expenditures(1) of $40.1
million, a decrease of $22.0 million or 35.4% year-over-year reflecting
lower Adjusted EBITDA and higher maintenance capital spending (1).
Distributable cash after maintenance capital expenditures per unit(1)
decreased by 33.0% to $0.36 per unit year-over-year.
-- During the first quarter of 2026, Chemtrade increased its monthly
distribution by approximately 4% to $0.06 per unit or $0.72 per unit per
year. Chemtrade's Payout ratio(1) for the first quarter of 2026 was 51%
and for the last twelve months was 38%.
-- During the first quarter of 2026, Chemtrade purchased approximately 2.3
million units as part of its normal course issuer bid (NCIB). Subsequent
to quarter end, on April 15, 2026, Chemtrade announced the early renewal
of the NCIB that would have expired on August 18, 2026. Under the new
NCIB, which terminates on April 16, 2027, Chemtrade is authorized to
purchase approximately 5.8 million units.
-- Chemtrade continues to maintain a strong balance sheet, with a Net debt
to LTM Adjusted EBITDA(1) ratio of 2.5x at the end of the first quarter
of 2026.
-- Due to geopolitical events, several products that Chemtrade
manufactures have seen significant price volatility in the last several
weeks. While this volatility makes forecasting results for the remainder
of 2026 challenging, Chemtrade is maintaining its 2026 Adjusted EBITDA
guidance unchanged and reiterates a range of $485.0 to $525.0 million.
-- Subsequent to the end of the first quarter, on April 14, 2026,
Chemtrade announced that the District of North Vancouver Council rejected
its rezoning application, which would have allowed significant safety
upgrades and continued liquid chlorine production at its North Vancouver
chlor-alkali facility beyond 2030. On May 5, 2026, the District of North
Vancouver issued a statement that the Mayor would be exercising his
authority to bring forward a notice of reconsideration of Chemtrade's
rezoning application and will be asking the Council to reconsider the
rezoning application in response to new conditions brought forth by
Chemtrade. The proposed changes address concerns voiced by the Mayor and
Council regarding site security, quantitative risk assessments, and the
permanent nature of the amendment that would allow liquid chlorine
production. If Council agrees, the Mayor has indicated that he would
recommend holding a new public hearing. Chemtrade continues to engage
with the District of North Vancouver, and multiple stakeholders and
partners on the best path to secure continued liquid chlorine operations
and uninterrupted municipal water safety in Western Canada.
Scott Rook, President and CEO of Chemtrade, commented "First quarter 2026 results demonstrate the merits of our diversified product portfolio, multifaceted growth strategy, and dedicated team. Despite the elevated volatility in the prices of several of our products and their inputs, we maintained operational and commercial discipline across all segments. We continue to execute on multiple organic growth projects while focusing on the further strengthening of our operations."
"Throughout the first quarter and into the second quarter, we continued the integration of Polytec, increased our reach with existing and new customers, started production at the new Augusta, GA plant, continued technical and commercial progress in UPA, and completed the chlor-alkali facility biennial turnaround while maintaining a focus on cash flow generation. I would like to thank our entire team for their efforts and dedication," continued Mr. Rook.
"Despite the heightened volatility, we remain encouraged by the outlook for several key products and are focused on ensuring reliable production in the long term. We will continue to execute towards Vision 2030 targets while maintaining a strong balance sheet and robust cash flow generation which allows us to return capital to unitholders," concluded Mr. Rook.
Consolidated Financial Summary of Q1 2026
The Canadian dollar strengthened by approximately $0.06 relative to the U.S. dollar during the first quarter of 2026, compared to the first quarter of 2025, with a negative impact to consolidated revenue and consolidated Adjusted EBITDA of $18.2 million and $6.0 million, respectively.
Revenue for the first quarter of 2026 was $503.0 million, an increase of $36.7 or 7.9% year-over-year. Excluding the impact of foreign exchange, revenue was $54.9 million or 11.8% higher than in the prior year period, driven by (i) revenue from the acquisition of Polytec in the WS segment; and (ii) higher selling prices for merchant acid and sulphur products as well as higher volumes and selling prices for Regen acid in the ASP segment. These gains were partially offset by lower MECU netbacks and volumes for chlor-alkali products as well as lower sales volumes and lower selling prices for sodium chlorate in the EC segment.
Adjusted EBITDA(1) was $113.5 million, a decrease of $6.6 million or 5.5% year-over-year. Excluding the impact of foreign exchange, Adjusted EBITDA in the first quarter was $0.6 million or 0.5% lower than in the first quarter of 2025. The year-over-year change was primarily due to lower MECU netbacks and volumes for chlor-alkali products as well as lower sales volumes and lower selling prices for sodium chlorate in the EC segment. EBITDA contribution from (i) the Polytec acquisition in the WS segment, and (ii) merchant and Regen acid in the ASP segment provided a partial offset.
Distributable cash after maintenance capital expenditures for the first quarter of 2026 was $40.1 million or $0.36 per unit, compared with $62.1 million or $0.53 per unit in the first quarter of 2025. The year-over year change primarily reflects the same factors that impacted Adjusted EBITDA, as noted above, and higher maintenance capital expenditures partially offset by a lower number of units. Chemtrade's payout ratio for the twelve months ended March 31, 2026 was 38%.
Chemtrade maintained a strong balance sheet through the first quarter of 2026. As of March 31, 2026, Chemtrade's Net debt was $1.2 billion and its Net Debt to LTM Adjusted EBITDA ratio was 2.5x. As of the end of the first quarter of 2026, Chemtrade also maintained ample financial liquidity with approximately $415 million (US$298 million) undrawn on its credit facilities, in addition to $46.5 million of cash on hand.
1) Adjusted EBITDA is a Total of Segments measure, Distributable cash after maintenance capital expenditures is a non-IFRS measure and Net debt to LTM Adjusted EBITDA, Distributable cash after maintenance and capital expenditures per unit and Payout ratio are non-IFRS ratios. Maintenance capital expenditures is a Supplementary financial measure. Please see Non-IFRS and Other Financial Measures for more information.
Segmented Financial Summary of Q1 2026
As previously reported, Chemtrade has separated the former Sulphur and Water Chemicals $(SWC)$ segment into two new segments, the Acid and Sulphur Products (ASP) segment and the Water Solutions $(WS)$ segment. Chemtrade now reports its results in three segments:
-- Acid and Sulphur Products, or ASP, segment markets, removes, and/or
produces merchant, regen, and ultrapure acid, sodium nitrite, all other
sulphur-related products, and provides other processing services.
-- Water Solutions, or WS, segment manufactures and markets a variety of
inorganic coagulants used in water treatment, including aluminum sulphate
(alum), aluminum chlorohydrate $(ACH)$, polyaluminum chloride (PACl), and
ferric sulphate (ferric). WS also provides value-added water solutions.
-- Electrochemicals, or EC, segment manufactures and markets sodium
chlorate and chlor-alkali products including caustic soda, chlorine and
hydrochloric acid, largely for the pulp and paper, oil and gas, and water
treatment industries. These products are marketed primarily to North
American and South American customers.
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