Mr. Mark Davis reports
CHEMTRADE PROVIDES UPDATE ON COVID-19 RESPONSE
Chemtrade Logistics Income Fund's operations, which are considered essential under U.S. state and Canadian provincial orders issued to date, were not significantly affected by COVID-19 in the first quarter. However, because of the general economic uncertainty resulting from the COVID-19 pandemic, Chemtrade has suspended its 2020 earnings guidance.
"Our first priority is to protect the health and safety of our employees. Over the last weeks, we have taken many precautionary measures, including reducing the number of people on our sites. Accordingly, we are postponing major plant turnarounds, such as the planned second quarter turnaround at our North Vancouver chlor-alkali facility, until later in the year," said Mark Davis, president and chief executive officer. "The global economy has become increasingly uncertain, with reduced visibility into the future. As a result, we pro-actively reduced our monthly distribution rate and took other steps to ensure financial flexibility during this time. We also indicated that the assumptions underlying our guidance were at risk based on the duration of this uncertainty. It has become apparent that this uncertainty will continue for some time. Accordingly, it is now prudent to suspend our previously issued 2020 guidance."
Mr. Davis continued: "As noted, our first quarter operations were not materially affected by COVID-19. While we expect demand for many of our products to be unaffected by the virus (for example, our water treatment chemicals sold to municipalities), other segments are likely to experience decreased demand, at least in the second quarter (for example, the regen services we provide to oil refineries). The recent decline in the value of the Canadian dollar relative to the U.S. dollar is, however, materially beneficial to our guidance assumption."
Chemtrade maintains ample liquidity. As of today, Chemtrade's liquidity position includes approximately $40-million (U.S.) of cash plus $160-million (U.S.) of undrawn credit under its committed revolving credit facility. The company does not have any debt maturities in the next 12 months.
Mr. Davis added, "As conditions stabilize and there is more clarity about the general impact on business activity or specific impact on our businesses, we will provide further updates."
About Chemtrade Logistics Income Fund
Chemtrade operates a diversified business, providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, potassium chloride and zinc oxide. Additionally, Chemtrade provides industrial services such as processing byproducts and waste streams.
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