Canexus Corporation Announces Third Quarter Results
Strong Cash Operating Profit Across All Business Units Press Release: Canexus Corporation – 11 hours ago
CALGARY, ALBERTA--(Marketwire - Nov. 6, 2012) - Canexus Corporation (CUS.TO) (the "Corporation" or "Canexus") today announced its financial results for the third quarter ended September 30, 2012.
- Cash operating profit improved in all three business units in the third quarter, resulting in total cash operating profit of $35.6 million ($98.8 million year-to-date). Improved demand for both hydrochloric acid and chlorine and higher metric electrochemical unit ("MECU") realized netback prices in the third quarter contributed to significantly higher operating rates and cash operating profit in our North America chlor-alkali business unit at North Vancouver ($16.2 million for the third quarter as compared to $4.3 million for the second quarter). We expect full year 2012 cash operating profit of $135 million to $140 million (the low end of our guidance range). Our preliminary expectation for 2013 cash operating profit is $155 million to $160 million, which reflects the start of benefits from our hydrochloric acid growth projects at North Vancouver and the expanded diluted bitumen and crude oil ("DBCO") transload capacity at Bruderheim. Formal guidance for 2013 will be announced in mid-December.
- Distributable cash was $25.9 million ($0.21 per share) and $61.4 million ($0.51 per share) for the three and nine months ended September 30, 2012, resulting in payout ratios of 65% and 81%, respectively.
- The tie-in of the upgraded power line at our low-cost Brandon sodium chlorate plant was completed during the quarter and is expected to increase capacity modestly (2-3%). It also paves the way for a meaningful potential future debottleneck expansion. Production losses of 3,800 metric tonnes ("MT") in September, due to a transformer failure on startup of the upgraded power line, impacted cash operating profit in the quarter by about $1.3 million. Record daily production levels of 915 MT have been achieved consistently since we returned to full capacity at the Brandon plant in late September.
- The Corporation continues to make noticeable progress at its North American Terminal Operation ("NATO") at Bruderheim, both in the DBCO transload business and with connecting our Bruderheim terminal to nearby diluted bitumen and diluent pipelines. Canexus continues to expect our DBCO transload capacity to reach 35,000 bbls/day (current capacity is approximately 18,000 bbls/day), however, this is likely to be delayed into the first quarter of 2013 due to the timing of tank deliveries.
- The Corporation's hydrochloric acid capacity expansion projects at its North Vancouver chlor-alkali facility will each add an additional 110,000 wet metric tonnes ("WMT") of capacity, increasing our total hydrochloric acid capacity to 370,000 WMT's per year. The output from the first of the two expansions is sold out under multi-year contracts. Startup of the expansions are scheduled for the first and fourth quarters of 2013.
- The Board declared the regular quarterly dividend of $0.1368 per common share payable January 15, 2013 to shareholders of record on December 31, 2012.
"Our businesses are performing well in tepid economic conditions, and we are positioned for continued growth," said Gary Kubera, President and CEO. "We are seeing the benefits of past investments and are continuing to make solid progress on our growth projects at both North Vancouver and Bruderheim resulting in record cash operating profits in 2012, with higher expectations for 2013."