Reiterates 2026 Guidance of Between $485.0 Million and $525.0 Million Adjusted EBITDA
TORONTO–(BUSINESS WIRE)–Chemtrade Logistics Income Fund (TSX: CHE.UN; OTCQX: CGIFF) (“Chemtrade” or the “Fund”) today announced unaudited financial results for the three- and twelve-month periods ended December 31, 2025. These results are subject to change based on audited results. The audited financial statements and accompanying MD&A for the three- and twelve-month periods ended December 31, 2025 are expected to be filed in March 2026.
Full Year 2025 Highlights
- Revenue of $1,997.8 million, an increase of $210.7 million or 11.8% year-over-year. Excluding the impact of foreign exchange and the maintenance turnaround at North Vancouver in 2024, revenue for 2025 was $171.0 million higher than 2024. Revenue for merchant acid, water solutions products and Regen acid in the SWC segment were significantly higher than 2024, which more than offset lower MECU volumes and netbacks in the EC segment.
- Adjusted EBITDA(1) of $507.4 million is the highest annual Adjusted EBITDA generated by Chemtrade since its inception and an increase of $36.6 million or 7.8% year-over-year. Excluding the impact of foreign exchange and the maintenance turnaround at North Vancouver in 2024, Adjusted EBITDA for 2025 was $8.8 million higher than 2024 due to higher margins for merchant acid, sodium chlorate and Regen acid.
- Net earnings of $139.4 million, an increase of $12.5 million year-over-year primarily due to favourable unrealized foreign exchange gains, higher Adjusted EBITDA, lower income tax expense and lower losses on disposal and write-down of PPE that were partially offset by an impairment of PPE, higher finance costs and higher depreciation and amortization expense.
- Cash flows from operating activities of $355.1 million, an increase of $13.0 million or 3.8% year-over-year mainly due to higher Adjusted EBITDA partially offset by an increase in working capital.
- Distributable cash after maintenance capital expenditures(1) of $228.0 million, an increase of $14.9 million or 7.0% year-over-year, reflecting the higher Adjusted EBITDA partially offset by higher maintenance capital expenditures, interest and lease payments. Distributable cash after maintenance capital expenditures per unit(1) increased by 10.8% year-over-year to $1.99 per unit.
- In January 2025, Chemtrade increased its monthly distribution by approximately 5% to $0.0575 per unit or $0.6900 per unit per year with a 2025 payout ratio(1) of 35%. Subsequent to year-end, in January 2026, Chemtrade increased its monthly distribution by approximately 4% to $0.06 per unit or $0.72 per unit per year.
- Chemtrade remained active on its normal course issuer bid (“NCIB”) during 2025 and returned approximately $100.8 million to unitholders via the purchase of approximately 8.9 million units.
- During 2025, Chemtrade took several steps to strengthen and optimize its balance sheet including reducing convertible debentures by approximately 90% and issuing a new series of unsecured notes with a coupon of 5.75% p.a. that mature in 2032.
- Following several years of focusing on organic growth, during 2025, Chemtrade grew its water portfolio via the acquisition of Polytec, Inc. (“Polytec”) and of certain assets of Thatcher Group Inc. (“Thatcher Group”) for a total of US$180 million.
- Chemtrade reaffirms its record guidance range for 2026 Adjusted EBITDA of $485.0 million to $525.0 million. At midpoint, the 2026 Adjusted EBITDA is similar to Chemtrade’s record 2025 Adjusted EBITDA of $507.4 million and emphasizes the significant step-change in Adjusted EBITDA and cashflow generation in the last five years. Certain external factors boosted 2025 results for acid products and Chemtrade’s 2026 guidance assumes a return to historical ranges as well as softness for certain chlor-alkali products. Additionally, 2026 is a maintenance heavy year for acid products in addition to the biennial maintenance of the North Vancouver chlor-alkali facility. Chemtrade expects these factors to be partially offset by contributions from organic growth initiatives as well as contributions from the acquisitions of Polytec and the Thatcher Group assets.
Fourth Quarter 2025 Highlights
- Revenue of $502.0 million an increase of $55.5 million or 12.4% year-over-year. Excluding the impact of foreign exchange, revenue was $56.5 million higher than in the prior year period, driven by higher selling prices and volumes for merchant acid, and to a lesser extent, Regen acid and water solutions products in the SWC segment. This more than offset lower MECU sales volumes and netbacks in the EC segment.
- Adjusted EBITDA of $98.2 million a decrease of $10.4 million or 9.6% year-over-year. Excluding the impact of foreign exchange, Adjusted EBITDA for the fourth quarter was $10.0 million lower than 2024 due to lower margins for most key products, other than merchant acid.
- Net earnings of $38.3 million, an increase of $28.0 million year-over-year primarily due to favourable unrealized foreign exchange gains and lower finance costs in 2025 and an impairment loss in 2024, partially offset by lower Adjusted EBITDA.
- Cash flows from operating activities of $85.5 million, an increase of $1.6 million or 1.9% year-over-year, mainly due to a decrease in working capital and lower income taxes paid partially offset by lower Adjusted EBITDA.
- Distributable cash after maintenance capital expenditures of $16.7 million, a decrease of $22.9 million or 57.9% year-over-year, reflecting lower Adjusted EBITDA and higher maintenance capital spending.
- Chemtrade remained active on its NCIB purchasing approximately 1.9 million units in the fourth quarter.
- Net Debt to LTM Adjusted EBITDA(2) of 2.3x at the end of the fourth quarter of 2025, continues to highlight Chemtrade’s strong balance sheet.
Scott Rook, President and CEO of Chemtrade, commented on the fourth quarter and full year 2025 unaudited results, “2025 was another year of strong financial and operational performance for Chemtrade, delivering the highest annual Adjusted EBITDA result in our history. While we benefitted from external market conditions, particularly for acid products, it is important to highlight that these record results were enabled by the operational excellence initiatives implemented over the past few years, our commercial discipline, and the dedication of our team. Chemtrade has not been immune to the continued softness in certain EC segment products, but the uniqueness of our business portfolio and our diverse customer base position us well to deliver through the cycle.”
“We remain encouraged by the outlook of our water products where we continue to invest organically and to see multiple opportunities. The integrations of Polytec and Thatcher Group assets are well-underway and progressing in line with our expectations. Although early innings, we are already progressing growth projects and expanding our reach with customers,” continued Mr. Rook. “Ultrapure acid organic initiatives also continue to progress well as we advance through customer qualifications. We remain confident that these investments will, over time, contribute to our results and the achievement of our long-term financial targets.”
“Chemtrade enters 2026 on a strong footing with a clear strategy to generate long-term unitholder value via operational excellence, investments in organic growth supplemented by the 2025 acquisitions, a prudent balance sheet, and using our strong cash flows to return capital to unitholders via distributions and unit buybacks,” concluded Mr. Rook.
Consolidated Financial Summary of Full Year 2025
The Canadian dollar weakened by approximately $0.03 relative to the U.S. dollar during 2025, compared with 2024, with a negative impact to consolidated revenue and consolidated Adjusted EBITDA of $29.2 million and $9.9 million, respectively. The biennial maintenance turnaround at the North Vancouver chlor-alkali plant during the second quarter of 2024 had a negative impact of approximately $10.5 million on revenue and approximately $17.9 million on Adjusted EBITDA for the year ended December 31, 2024.
Revenue for 2025 was $1,997.8 million, an increase of $210.7 million or 11.8% compared to 2024. Excluding the impact of foreign exchange and the maintenance turnaround at North Vancouver in 2024, revenue was $171.0 million higher than in 2024. The increase was primarily due to: (i) higher selling prices and volumes of merchant acid, water solutions products and Regen acid in the SWC segment; (ii) higher selling prices for sulphur products in the SWC segment; (iii) higher selling prices for caustic soda, sodium chlorate and HCI in the EC segment; and (iv) higher sales volumes of sodium chlorate in the EC segment. These contributions were partially offset by lower selling prices for chlorine and lower MECU sales volumes in the EC segment.
Adjusted EBITDA for 2025 was $507.4 million, $36.6 million or 7.8% higher compared to 2024. Excluding the impact of foreign exchange and the maintenance turnaround at North Vancouver in 2024, Adjusted EBITDA was $8.8 million higher compared to 2024. The increase was primarily due to: (i) higher selling prices for caustic soda and sodium chlorate in the EC segment; and (ii) higher selling prices and volumes for merchant acid and Regen acid in the SWC segment. These contributions were partially offset by (i) lower selling prices for chlorine and lower MECU sales volumes in the EC segment; and (ii) higher corporate costs.
Distributable cash after maintenance capital expenditures for 2025 was $228.0 million or $1.99 per unit, compared with $213.1 million or $1.80 per unit in 2024. The increase primarily reflects the same factors that impacted Adjusted EBITDA, as noted above, as well as higher maintenance capital, interest and lease expenditures and a lower number of units. Chemtrade’s Payout ratio for the twelve months ended December 31, 2025 was 35%.
Chemtrade maintained a strong balance sheet during 2025; as of December 31, 2025, Net Debt(3) was $1.2 billion and the Net Debt to LTM Adjusted EBITDA ratio was 2.3x compared to $864.2 million and 1.8x, respectively at December 31, 2024. The increase of approximately 0.5x in the Net Debt to LTM Adjusted EBITDA ratio was primarily due to indebtedness incurred following the closing of the Polytec acquisition in November 2025. As of the end of 2025, Chemtrade maintained strong financial liquidity with US$370.3 million undrawn on its credit facilities, in addition to $27.4 million of cash on hand.
Consolidated Financial Summary of Q4 2025
The Canadian dollar strengthened by approximately $0.01 relative to the U.S. dollar during the fourth quarter of 2025, compared with the fourth quarter of 2024, with a negative impact to consolidated revenue and consolidated Adjusted EBITDA by $1.0 million and $0.4 million, respectively.
Revenue in the fourth quarter was $502.0 million, an increase of $55.5 million or 12.4% year-over-year. Excluding the impact of foreign exchange, revenue was $56.5 million higher than in the prior year period. The increase was primarily due to: (i) higher selling prices and volumes of merchant acid, water solutions products and Regen acid in the SWC segment; (ii) higher selling prices for sulphur products in the SWC segment; and (iii) higher sales volumes of sodium chlorate and products at the Brazil plant in the EC segment. These contributions were partially offset by lower MECU sales volumes and netbacks in the EC segment.
Adjusted EBITDA in the fourth quarter was $98.2 million, $10.4 million or 9.6% lower year-over-year. Excluding the impact of foreign exchange, Adjusted EBITDA was $10.0 million lower than in the prior year period. The year-over-year change was primarily due to: (i) lower MECU sales volumes and netbacks in the EC segment; (ii) higher costs for sodium nitrite and ultrapure sulphuric acid in the SWC segment; and (iii) lower margins for water solutions products in the SWC segment where higher selling prices did not fully offset higher raw material costs. These were partially offset by higher margins for merchant acid in the SWC segment where significantly higher selling prices more than offset higher input costs.
Distributable cash after maintenance capital expenditures for the fourth quarter of 2025 was $16.7 million or $0.15 per unit, compared to $39.5 million or $0.33 per unit in the fourth quarter of 2024. 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 December 31, 2025 was 35%.
Segmented Financial Summary of Full Year 2025
The SWC segment reported revenue of $1,230.7 million for 2025, compared to $1,038.2 million for 2024. Adjusted EBITDA in the SWC segment was $288.6 million in 2025, compared to $270.4 million in 2024. The weaker Canadian dollar relative to the U.S. dollar during 2025, compared to 2024, had a positive impact on SWC revenue and SWC Adjusted EBITDA of $17.2 million and $2.4 million, respectively.
Excluding the impact of foreign exchange, SWC revenue in 2025 increased by $175.4 million or 16.9% compared to 2024. The increase in revenue was primarily due to: (i) higher selling prices and volumes of merchant acid, water solutions products and Regen acid; and (ii) higher selling prices for sulphur products. Excluding the impact of foreign exchange, SWC Adjusted EBITDA in 2025 increased by $15.8 million or 5.8% year-over-year due to higher selling prices and volumes for merchant acid, Regen acid, and sulphur products, which more than offset higher costs for sodium nitrite and ultrapure sulphuric acid.
The EC segment reported revenue of $767.0 million in 2025, compared with $748.9 million in 2024. Adjusted EBITDA in the EC Segment was $345.7 million, compared to $314.1 million in 2024. The weaker Canadian dollar relative to the U.S. dollar during 2025, compared to 2024, had a positive impact on EC revenue and EC Adjusted EBITDA of $12.0 million and $8.1 million, respectively. The biennial maintenance turnaround at the North Vancouver chlor-alkali plant during the second quarter of 2024 had a negative impact of approximately $10.5 million on EC revenue and $17.9 million on EC Adjusted EBITDA for the year ended December 31, 2024.
Excluding the impact of foreign exchange and the maintenance turnaround at North Vancouver in 2024, EC revenue in 2025 decreased by $4.3 million or 0.6% compared to 2024. The decrease in EC revenue was due to (i) lower selling prices for chlorine; and (ii) lower MECU sales volumes that were partially offset by (i) higher selling prices for caustic soda, sodium chlorate and HCI; and (ii) higher sales volumes of sodium chlorate. Excluding the impact of foreign exchange and the maintenance turnaround at North Vancouver in 2024, EC Adjusted EBITDA in 2025 increased by $5.6 million or 1.7% primarily due to (i) higher selling prices for caustic soda, sodium chlorate and HCl; and (ii) higher sales volumes of sodium chlorate that were partially offset by (i) lower selling prices for chlorine; and (ii) lower MECU sales volumes. MECU netbacks decreased by approximately $60 in 2025, compared to 2024, with lower netbacks for the chlorine side of the molecule, offsetting roughly 40% of higher netbacks for caustic soda.
Corporate costs in 2025 were $126.9 million, compared to $113.7 million in 2024. Corporate costs increased primarily on account of: (i) $6.1 million higher long-term incentive plan costs; (ii) $5.3 million of legal and other costs related to the Polytec acquisition; and (iii) $1.6 million of expenses related to the Superior lawsuit.
Segmented Financial Summary of Q4 2025
The SWC segment reported revenue of $323.1 million for the fourth quarter of 2025, compared to $260.1 million for the fourth quarter of 2024. Adjusted EBITDA in the SWC segment was $60.7 million for the fourth quarter of 2025, compared to $62.5 million for the fourth quarter of 2024. The stronger Canadian dollar relative to the U.S. dollar during the fourth quarter of 2025, compared with the fourth quarter of 2024, had a negative impact on SWC revenue and SWC Adjusted EBITDA of $0.8 million and $0.1 million, respectively.
Excluding the impact of foreign exchange, SWC revenue in the fourth quarter of 2025 increased by $63.8 million or 24.5% year-over-year. The increase in comparable SWC revenue was primarily due to: (i) higher selling prices and volumes of merchant acid and, to a lesser extent, water solutions products and Regen acid; (ii) higher selling prices for sulphur products; and (iii) a contribution from the Polytec acquisition. Excluding the impact of foreign exchange, SWC Adjusted EBITDA in the fourth quarter of 2025 decreased by $1.6 million or 2.6% year-over-year due to (i) higher costs for sodium nitrite and ultrapure sulphuric acid; and (ii) lower margins for water solutions products as higher selling prices did not fully offset higher input costs. These impacts were partially offset by (i) higher margins for merchant acid as significantly higher selling prices more than mitigated higher input costs; and (ii) to a lesser extent, approximately six weeks of post-acquisition EBITDA generated by Polytec.
The EC segment reported revenue of $179.0 million for the fourth quarter of 2025, compared with $186.4 million for the fourth quarter of 2024. Adjusted EBITDA in the EC Segment was $71.6 million, compared to $83.5 million for the fourth quarter of 2024. The stronger Canadian dollar relative to the U.S. dollar during the fourth quarter of 2025, compared with the fourth quarter of 2024, had a negative impact on EC revenue and EC Adjusted EBITDA of $0.2 million and $0.3 million, respectively.
Excluding the impact of foreign exchange, EC revenue in the fourth quarter of 2025 decreased by $7.2 million or 3.9% year-over-year. The decrease in comparable EC revenue was due to lower MECU sales volumes and netbacks that were partially offset by higher sales volumes of sodium chlorate and products at the Brazil plant. MECU netbacks decreased by approximately $40 year-over-year, mainly due to lower netbacks for chlorine. Excluding the impact of foreign exchange, EC Adjusted EBITDA in the fourth quarter of 2025 decreased by $11.6 million. The factors that affected EC revenue also had an impact on EC Adjusted EBITDA on a year-over-year basis.
Corporate costs in the fourth quarter of 2025 were $34.1 million, compared with $37.3 million in the fourth quarter of 2024. Corporate costs were lower year-over-year on account of: (i) $5.9 million of lower realized foreign exchange losses in 2025 compared to 2024; (ii) $1.3 million lower short-term incentive compensation costs; and (iii) $1.6 million lower professional fees and other administrative expenses that were partially offset by $5.3 million of higher long-term incentive plan costs.
2026 Guidance
Chemtrade is reaffirming its 2026 guidance, as detailed below and previously issued in January 2026, with expected Adjusted EBITDA between $485.0 million and $525.0 million. If achieved, based on the mid-point of guidance, Chemtrade expects to end 2026 with a Net debt to LTM Adjusted EBITDA ratio close to 2.5x and an implied Payout ratio of approximately 45%.
Achieving the midpoint of this range would mark a near record Adjusted EBITDA in Chemtrade’s history, at a similar level to the record Adjusted EBITDA achieved in 2025, highlighting the significant step-change in Chemtrade’s Adjusted EBITDA and cashflow generation in the last five years.
|
($ million) |
2026 Guidance |
Actual |
|
|
2025(2) |
2024 |
||
|
Adjusted EBITDA |
$485.0 – $525.0 |
$507.4 |
$470.8 |
|
Maintenance capital expenditures(1) |
$120.0 – $150.0 |
$123.5 |
$104.5 |
|
Growth capital expenditures(1) |
$35.0 – $55.0 |
$48.2 |
$81.3 |
|
Lease payments |
$70.0 – $80.0 |
$70.0 |
$65.4 |
|
Cash interest(1) |
$65.0 – $75.0 |
$54.9 |
$45.7 |
|
Cash tax (1) |
$35.0 – $45.0 |
$31.0 |
$42.1 |
|
(1) Maintenance capital expenditures, Cash interest and Cash tax are supplementary financial measures. Growth capital expenditures is a Non-IFRS financial measure. See Non-IFRS and Other Financial Measures. |
|||
|
(2) Unaudited results. |
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Chemtrade’s guidance is based on numerous assumptions. Certain key assumptions that underpin the are as follows:
- None of the principal manufacturing facilities (as set out in Chemtrade’s AIF) incurs significant unplanned downtime
- No labour disruptions occur at any of Chemtrade’s principal manufacturing facilities (as set out in Chemtrade’s AIF)
- The biennial turnaround at the North Vancouver chlor-alkali facility is executed as planned
All of Chemtrade’s products are currently compliant under the Canada-U.S.-Mexico Free Trade Agreement (“CUSMA”), which includes a provision for potential review and adjustment in 2026. It is difficult to estimate updates to CUSMA as well as impacts from changes to the current trade regime or potential tariffs – this guidance does not take into account potential impacts from any of these events.
|
Key Assumptions |
2026 Assumptions |
2025(3) Actual |
2024 Actual |
|
Approximate North American MECU sales volumes |
171,000 |
170,000 |
172,000 |
|
2026 realized MECU netback being lower than 2025 (per MECU) |
CAD ($155) |
N/A |
N/A |
|
Average CMA(1) NE Asia caustic spot price index per tonne(2) |
US$450 |
US$435 |
US$385 |
|
Approximate North American production volumes of sodium chlorate (MTs) |
254,000 |
273,000 |
270,000 |
|
USD to CAD average foreign exchange rate |
1.375 |
1.397 |
1.370 |
|
Long term incentive plan costs (in $ millions) |
$22.0 – $28.0 |
$29.4 |
$23.3 |
|
(1) Chemical Market Analytics (CMA) by OPIS, A Dow Jones Company, formerly IHS Markit Base Chemical. |
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|
(2) The average CMA NE Asia caustic spot price for 2026, 2025 and 2024 is the average spot price of the four quarters ending with the third quarter of that year as the majority of our pricing is based on a one quarter lag. |
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(3) Unaudited results. |
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Chemtrade Vision 2030
In May 2025, Chemtrade shared Chemtrade Vision 2030 where one of the key aspects is to grow mid-cycle annual Adjusted EBITDA to between $550.0 million and $600.0 million by 2030. Chemtrade expects to achieve this target by continuing to focus on operational and commercial excellence while pursuing both organic and external growth opportunities such as the acquisitions of Polytec and the assets of Thatcher Group in 2025. This improvement in Adjusted EBITDA, alongside Chemtrade’s commitment to returning capital to unitholders while maintaining a prudent balance sheet, is expected to deliver compelling value on a per unit basis.
Update on Organic Growth Projects
Chemtrade remains focused on its long-term objective of delivering sustained earnings growth and generating value for investors. To accomplish this, Chemtrade has identified and is executing on various organic growth initiatives, particularly related to water chemicals, where it continues to progress in-line with expectations. In 2026, Chemtrade plans to invest between $35.0 million and $55.0 million in growth capital expenditures with a focus on water treatment chemicals projects.
Construction and the start-up process of the Cairo, Ohio ultrapure acid project was completed in 2025 alongside quality improvement upgrades to the Tulsa, Oklahoma ultrapure acid plant. Chemtrade continues to progress through certification with major customers. Commercial ramp-up is expected throughout 2026.
Distributions and Capital Allocation Update
Distributions declared in the fourth quarter of 2025 totalled $0.1725 per unit, comprised of monthly distributions of $0.0575 per unit, which reflects a 5% increase in the monthly distribution rate beginning with the distribution declared during the month of January 2025.
Contacts
Endri Leno
Vice President, Investor Relations
Email: [email protected]
