Chemtrade Logistics Income Fund (Chemtrade) announced results for the three months ended June 30, 2023. Chemtrade has registered net earnings of US$ 87.3 million, an increase of $52.5 million or 151 per cent YoY. Revenue of $470 million reflected an increase of US$ 23.6 million or 5 per cent YoY.

The company reported the highest quarterly Adjusted EBITDA of US$ 144.2 million, an increase of $62.5 million or 76 per cent YoY, reflecting strong double-digit Adjusted EBITDA growth in both operating segments and lower corporate costs.

Chemtrade reiterated 2023 Adjusted EBITDA guidance to be greater than $450 million, a record level for Chemtrade. Adjusted EBITDA guidance was most recently increased by the Fund on June 23, 2023 and reflects strong results for the first half of 2023 and improved visibility for the balance of the year.

The company also lowered 2023 guidance for growth capital expenditures to US$ 70 million – US $100 million, from the previous range of $110 million - $140 million considering the recently announced pause in the KPCT Advanced Chemicals joint venture ultrapure sulphuric acid project in Arizona.

Scott Rook, President and CEO of Chemtrade, commented on the second quarter 2023 results, “We are proud of the results that we generated in the second quarter, including the highest quarterly Adjusted EBITDA in Chemtrade’s history. Our record start to the year speaks to the quality and execution of our team and the strength of our diversified product portfolio. We are confident in the long-term strength of our business, however, as can be observed from our guidance, we are expecting the second half of 2023 to be softer than the record first half. This is due to weaker market conditions for the Western Canadian pulp industry which affects demand for our sodium chlorate. Also, while conditions for chlor-alkali remain well above historic levels, we expect that conditions in the second half of 2023 are likely to be weaker than the first half of the year.”

Rook continued. “Areas where we saw notable strength in the second quarter included sodium chlorate pricing and margins, water solutions product pricing and margins, Regen acid volumes, chlorine, and hydrochloric acid (HCl) pricing. Based on our strong performance we are reiterating our June guidance for our 2023 financial results.”

“Given our product portfolio’s compelling combination of defensiveness and growth, we believe that Chemtrade is favourably differentiated from other chemical companies and well-positioned for the current macroeconomic environment. In a typical recession, many of our key products – including water solutions products and Regen acid have seen a limited impact on demand. Concurrently, we remain focused on taking advantage of the attractive opportunities across our portfolio including a global energy cost advantage benefitting our Electrochemical products, a significant increase in demand expected in Ultrapure acid from semiconductor production onshoring in North America, and ongoing demand growth in water chemicals.,” concluded Rook.

The company is now expecting Adjusted EBITDA for 2023 to exceed $450 million, which will be the highest annual amount ever achieved in our history.