Chemtrade Logistics Income Fund · TSX:CHE.UN

Chemtrade Logistics Income Fund — Corporate Update (June 2020)

16 slides from Chemtrade Logistics Income Fund's corporate update, June 2020

  1. Slide 1: Business Update June 2020

    20 20 JUNE 2020 BUSINESS UPDATE 1

  2. Slide 2: Caution Regarding Forward-Looking Statements

    Certain statements contained in this presentation 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”, “ex

  3. Slide 3: 4 Pronged Strategy

    4 PRONGED STRATEGY 1 Growth Increased size, scale and diversity of earnings 2 Business Model Mitigates Commodity Risks 3 Operational Excellence Ensures sustainable earnings through improved operations, assets and people 4 Financial Prudence Maintain financial flexibility & balance sheet strength wit

  4. Slide 4: Business Model Fit

    BUSINESS MODEL FIT SULPHUR PRODUCTS WATER SOLUTIONS ELECTROCHEMICALS (EC) AND PERFORMANCE AND SPECIALTY CHEMICALS (SPPC) CHEMICALS (WSSC) Wide diversity of sources Three sources Approx 60% of revenue of earnings of earnings: based on risk shared contracts - NA sodium chlorate Includes specialty - SA

  5. Slide 5: Operational Excellence

    CHEM TRADE Operational Excellence Addressed 2018 Operational Issues [ Rail and supply chain *~ ) Human capital management Ba Production shortfalls OPERATIONAL EXCELLENCE

  6. Slide 6: 2019 Results

    2019 RESULTS*  SPPC 2019 EBITDA was $52.1 MM better than 2018  Offset by EC, 2019 EBITDA was $50.5 MM lower than 2018 (Caustic soda & HCl)  Water products showed a significant improvement over 2018 *Adjusted for IFRS 16 Leases 66

  7. Slide 7: 2019 Results

    2019 RESULTS C$ MILLIONS Adjusted EBITDA* 335.6 EBITDA Maintenance CapEx 82.7 77.9 Lease expense 56.8 171.4 Cash Interest 69.5 Cash Taxes 4.5 160.7 Distributable Cash 122.1 DCPU $1.32 EC SPPC WSSC * Excludes Litigation Reserve 77

  8. Slide 8: 2020 H1 Results

    2020 H1 RESULTS C$ MILLIONS Adjusted EBITDA 156.4 EBITDA Maintenance CapEx 23.1 Lease expense 28.1 52.9 69.0 Cash Interest 33.5 Cash Taxes 1.8 66.2 Distributable Cash 69.9 DCPU $0.75 EC SPPC WSSC 88

  9. Slide 9: 2020 Guidance

    2020 GUIDANCE Was Suspended in April 2020  Adjusted EBITDA $300MM - $350MM  2019 actual EBITDA was $335.6 MM*  Major differences from 2019:  Lower caustic and HCL pricing  Vancouver biennial turnaround  Major turnaround of material refinery customer *Excluding the $40.0 MM legal provision. 99

  10. Slide 10: 2020 Guidance: Key Assumptions

    2020 GUIDANCE KEY ASSUMPTIONS Revised Key Assumptions – Electrochemicals (EC) Segment Original August 2020 Approximate North American MECU production volume ~190KT ~155KT 2020 average IHS NE Asia Caustic price index being lower per US$15 US$60 tonne than the 2019 average; and North American producti

  11. Slide 11: 2020 Guidance

    2020 GUIDANCE  Maintenance Capex - $80MM - $90MM  Reduced to $75MM – 80MM in May 2020  Lease Expense - $55MM - $60MM  Cash Interest - $70MM- $75MM  Cash Taxes - $5MM - $10MM 11

  12. Slide 12: EC Segment – Chlor-Alkali

    2020 GUIDANCE EC Segment – Chlor-Alkali MECU  1 tonne of chlorine, 1.12 tonnes of caustic soda CHLORINE  Sold as is, or  Converted into HCl for fracking or industrial uses CAUSTIC SODA  Domestic market, but  Compete with Asian imports as not enough domestic supply  Selling price heavily influe

  13. Slide 13: EC Segment – Caustic Soda

    2020 GUIDANCE EC Segment – Caustic Soda Caustic Soda – A Key Improvement Driver  Market forecasts still bullish mid to long term  Demand continues to grow, minimal new supply  Movements in Taiwan contract price are indicative of movements in NE Asia spot pricing 13

  14. Slide 14: EC Segment – Caustic Soda

    2020 GUIDANCE EC Segment – Caustic Soda Source – IHS Markit – Jan 2020 14 14

  15. Slide 15: Macro Factors

    2020 GUIDANCE Macro Factors Recent macro developments:  Effect of COVID-19 virus on Asia chlor-alkali industry and general global economy - Our selling price for caustic is dependent on NE Asia spot price for caustic  Effect of rail blockades in various parts of Canada - Our business (including cu

  16. Slide 16: Concluding Remarks

    CONCLUDING REMARKS 16

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