Chemtrade Logistics Income Fund (CHE-UN) Q1 2026 earnings summary

Executive summary

• Revenue rose 7.9% year-over-year to $503.0 million, driven by acquisitions and strong acid and water solutions segments, but offset by lower chlor-alkali and sodium chlorate prices and volumes.

• Adjusted EBITDA declined 5.5% to $113.5 million, mainly due to weaker chlor-alkali and sodium chlorate performance, with FX headwinds reducing revenue and EBITDA by $18.2 million and $6.0 million, respectively.

• Net earnings fell 48.3% year-over-year to $25.4 million, reflecting margin pressures, higher finance costs, and unrealized FX losses.

• Management addressed ongoing negotiations with the North Vancouver district regarding operating rights for liquid chlorine, with details to be made public soon.

• Recent acquisitions, particularly in the water segment, are integrating well and contributing to growth.

Financial highlights

• Guidance for full-year adjusted EBITDA is CAD 485 million to CAD 525 million, factoring in high sulfur and aluminum input costs.

• Cash flows from operating activities increased 23.3% to $42.4 million year-over-year.

• Distributable cash after maintenance capex dropped 35.4% to $40.1 million ($0.36/unit), with DCPU falling from $0.53.

• Net debt rose 31.5% to $1,248.9 million; net debt to LTM Adjusted EBITDA at 2.5x.

• The North Vancouver plant turnaround in Q2 had an EBITDA impact estimated at CAD 15 million.

Outlook and guidance

• 2026 Adjusted EBITDA guidance reaffirmed at $485–$525 million, with a midpoint implying a 2.5x net debt/EBITDA and ~40% payout ratio.

• Guidance assumes weaker chlorine and HCl pricing for 2026 compared to last year.

• Vision 2030 targets 5–10% annual growth in Adjusted EBITDA and distributable cash, aiming for $550–$600 million mid-cycle EBITDA by 2030.

• Geopolitical volatility is causing significant price swings in several products, making forecasts challenging but guidance remains unchanged.

• Caustic soda prices are expected to remain volatile, with long-term forecasts suggesting higher prices by 2028.