TORONTO--(BUSINESS WIRE)--August 12, 2026--
Chemtrade Logistics Income Fund (TSX: CHE.UN, OTCQX$(R)$: CGIFF) ("Chemtrade" or the "Fund") today announced results for the three and six-month period ended June 30, 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.
Second Quarter 2026 Highlights
-- Revenue of $578.7 million, an increase of $82.0 million or 16.5%
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
of chlor-alkali products and lower volumes and selling prices for sodium
chlorate in the EC segment.
-- Adjusted EBITDA(1) of $127.3 million, a decrease of $10.7 million or
7.8% year-over-year. Excluding the impact of the maintenance turnaround
at North Vancouver, Adjusted EBITDA was $3.7 million lower than 2025.
Adjusted EBITDA from the Polytec acquisition and higher Adjusted EBITDA
from merchant and Regen acid were more than offset by lower selling
prices for chlor-alkali products and lower volumes and selling prices for
sodium chlorate. Adjusted EBITDA for water products was also lower as
higher selling prices did not fully offset higher input costs.
-- Net earnings of $42.9 million, an increase of $33.2 million
year-over-year primarily due to an impairment of PPE in 2025 and lower
finance costs that were partially offset by lower Adjusted EBITDA,
unfavourable unrealized foreign exchange losses, higher depreciation and
amortization expense and higher income tax expense.
-- Cash flows from operating activities of $91.9 million, an increase of
$6.8 million or 8.0% 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 $42.4
million, a decrease of $29.1 million or 40.7% year-over-year reflecting
higher maintenance capital spending(1) and lower Adjusted EBITDA.
Distributable cash after maintenance capital expenditures per unit(1)
decreased by $0.25 or 39.5% to $0.38 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 second quarter of 2026 was 47%
and for the last twelve months was 45%.
-- During the second quarter of 2026, Chemtrade purchased approximately
0.9 million units as part of its normal course issuer bid (NCIB). Under
its current NCIB, which terminates on April 16, 2027, Chemtrade is
authorized to purchase approximately 5.8 million units of which
approximately 4.6 million remain available for purchase as of August 11,
2026.
-- Chemtrade continues to maintain a strong balance sheet, with a Net debt
to LTM Adjusted EBITDA(1) ratio of 2.55x at the end of the second quarter
of 2026.
-- On June 30, 2026, Chemtrade completed the redemption of $4.3 million
aggregate principal 7.00% Convertible Debentures due June 30, 2028 after
having issued 1.7 million units between May 22, 2026 and June 29, 2026 to
satisfy conversions of the Convertible Debentures. Following this
redemption, Chemtrade has removed all convertible debt instruments from
its balance sheet.
-- Due to geopolitical events, several of Chemtrade's products have seen
significant price volatility during the first six months of 2026. 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.
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.
Scott Rook, President and CEO of Chemtrade, commented, "The second quarter results continued to highlight the strength and resiliency of our operations, product mix, and dedicated team. Despite the ongoing volatility in several key inputs and products, Chemtrade delivered positive results marked by strength in the ASP segment while positioning for long-term success across its product suite and manufacturing facilities."
"During the second quarter, in addition to integrating Polytec, we continued to invest in WS segment organic growth initiatives that will allow us to take advantage of a more normalized raw materials environment in the coming quarters. Simultaneously, we are advancing ultrapure acid through the commercial and qualification steps of multiple customers. In the EC segment, we successfully completed the maintenance turnaround and continued to deliver well despite the price volatility of chlor-alkali products," continued Mr. Rook.
"Our steady guidance emphasizes the stability of our earnings, cash flows, and balance sheet both in 2026 and as we progress towards Vision 2030 goals. We remain committed to returning capital to our unitholders and to the growth implied in our targets," concluded Mr. Rook.
Consolidated Financial Summary of Q2 2026
The Canadian dollar relative to the U.S. dollar during the second quarter of 2026 was similar to the second quarter of 2025 with no impact to consolidated revenue and consolidated Adjusted EBITDA. During the second quarter of 2026, the biennial maintenance turnaround at the North Vancouver chlor-alkali plant had a negative impact of approximately $7.0 million on Adjusted EBITDA.
Revenue for the second quarter of 2026 was $578.7 million, an increase of $82.0 or 16.5% year-over-year, due to (i) revenue from the acquisition of Polytec in the WS segment; (ii) higher selling prices for merchant acid, sulphur products, and Regen acid in the ASP segment; (iii) higher selling prices for water solutions products in the WS segment; and (iv) higher revenue in Brazil in the EC segment. These gains were partially offset by lower MECU netbacks for chlor-alkali products as well as lower volumes and lower selling prices for sodium chlorate in the EC segment.
Adjusted EBITDA(1) was $127.3 million, a decrease of $10.7 million or 7.8% year-over-year. Excluding the impact of the maintenance turnaround at North Vancouver, Adjusted EBITDA in the second quarter of 2026 was $3.7 million or 2.7% lower than in the second quarter of 2025. The year-over-year change was primarily due to (i) lower MECU netbacks for chlor-alkali products as well as lower sales volumes and lower selling prices for sodium chlorate in the EC segment; and (ii) lower margins for water solutions products in the WS segment. A partial offset was provided by (i) Adjusted EBITDA contribution from the Polytec acquisition in the WS segment; (ii) higher Adjusted EBITDA for merchant and Regen acid in the ASP segment; and (iii) lower corporate costs.
Distributable cash after maintenance capital expenditures for the second quarter of 2026 was $42.4 million or $0.38 per unit, compared with $71.5 million or $0.63 per unit in the second 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 June 30, 2026 was 45%.
The timing of maintenance capex in 2026 is significantly different than 2025. During 2025, approximately two-thirds of the annual maintenance capex was incurred during the second half of the year, whereas less than half is expected to be incurred in the second half of 2026.
Chemtrade maintained a strong balance sheet through the second quarter of 2026. As of June 30, 2026, Chemtrade's Net debt was $1.3 billion and its Net Debt to LTM Adjusted EBITDA ratio was 2.55x. As of the end of the second quarter of 2026, Chemtrade also maintained ample financial liquidity with approximately $410 million (US$289 million) undrawn on its credit facilities, in addition to $44.5 million of cash on hand.
Segmented Financial Summary of Q2 2026
As of 2026, 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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