Chemtrade Logistics Reports Record Q3 2025 Adjusted EBITDA and Raises Full-Year Guidance Above $503 Million
Chemtrade Logistics Income Fund (TSX: CHE.UN) (“Chemtrade” or the “Fund”) announced strong financial results for the three-month period ended September 30, 2025, delivering record quarterly Adjusted EBITDA and double-digit year-over-year growth in revenue and distributable cash. Financial statements and the Management’s Discussion and Analysis (MD&A) are available at www.chemtradelogistics.com and on SEDAR+ at www.sedarplus.com.
Third Quarter 2025 Highlights
Chemtrade reported revenue of $532.8 million, up 12.4% or $58.6 million from the same period in 2024, primarily driven by higher selling prices for key products in both operating segments. Excluding foreign exchange impacts, revenue increased by $55.1 million year-over-year.
Adjusted EBITDA reached $151.2 million, the highest quarterly result in Chemtrade’s history and an increase of $14.0 million or 10.2% year-over-year. Excluding currency impacts, Adjusted EBITDA rose by $12.9 million, mainly reflecting higher selling prices and volumes for merchant acid, Regen acid, and water treatment products, partially offset by lower chlorine prices and higher input costs.
Net earnings were $42.4 million, down 29.5% from Q3 2024, primarily due to non-cash fair value losses on debentures and higher depreciation and amortization, partially offset by stronger operating results and lower tax expenses.
Cash flows from operating activities rose 8.5% to $155.5 million, reflecting higher Adjusted EBITDA.
Distributable cash after maintenance capital expenditures increased 18.0% to $77.8 million, or $0.69 per unit, up 24.4% year-over-year. Chemtrade’s payout ratio for the last twelve months stood at a healthy 32%.
During the quarter, the Fund repurchased approximately 1.0 million units under its normal course issuer bid (“NCIB”), out of 11.2 million units authorized. Chemtrade ended Q3 with a Net debt-to-LTM Adjusted EBITDA ratio of 1.8x, maintaining a strong balance sheet and liquidity position.
CEO Commentary
Scott Rook, President and CEO, stated, “Chemtrade delivered another exceptional quarter with record Adjusted EBITDA and strong cash generation, reflecting our operational excellence and the strength of our diversified portfolio. Both business segments performed well, demonstrating resilience despite ongoing global trade tensions. These results reinforce our confidence in achieving another record year for Adjusted EBITDA in 2025.”
Rook added that Chemtrade’s balance sheet strength and disciplined capital allocation continue to support both organic and acquisition-driven growth. “We are advancing multiple high-return projects, particularly in our water products business, and progressing our ultra-pure acid initiatives. These efforts underpin our Vision 2030 targets and position us for sustainable value creation.”
Consolidated Financial Performance
A weaker Canadian dollar compared with the U.S. dollar contributed positively to revenue and Adjusted EBITDA by $3.5 million and $1.1 million, respectively.
In the Sulphur and Water Chemicals (SWC) segment, revenue rose to $334.2 million from $280.5 million a year ago. Excluding foreign exchange effects, revenue increased by 18.3%, driven by higher volumes and selling prices of merchant acid, Regen acid, water treatment products, and sulphur derivatives. SWC Adjusted EBITDA grew to $92.1 million from $78.3 million, supported by strong pricing and demand.
In the Electrochemicals (EC) segment, revenue grew modestly to $198.6 million from $193.7 million in Q3 2024, while Adjusted EBITDA rose to $93.8 million from $83.0 million. The increase was led by higher sodium chlorate volumes and stronger caustic soda prices, partially offset by lower chlorine prices.
Corporate costs increased to $34.7 million from $24.1 million, reflecting higher incentive compensation, legal and acquisition-related expenses, and foreign exchange losses.
Balance Sheet and Liquidity
As of September 30, 2025, Chemtrade’s Net Debt was $941.1 million with liquidity of US$483.9 million available under its credit facilities plus $18.7 million in cash. Subsequent to quarter-end, Chemtrade extended its credit facility maturity to October 2030.
2025 Guidance Update
Chemtrade raised its full-year 2025 Adjusted EBITDA guidance to above $502.6 million, surpassing its previous range of $475.0–$500.0 million and exceeding the record set in 2023. The updated guidance excludes earnings from Polytec, as regulatory delays have postponed the acquisition closing due to the U.S. government shutdown.
The Fund expects its 2025 payout ratio to remain near 37% or below, emphasizing continued strong cash generation. Other 2025 guidance assumptions include maintenance capital expenditures of $115–$125 million, growth capital expenditures of $40–$50 million, and cash taxes of $40–$50 million.
Vision 2030 and Growth Projects
Under its Vision 2030 strategy, Chemtrade targets mid-cycle annual Adjusted EBITDA between $550 million and $600 million by 2030 through a mix of organic growth and strategic acquisitions, while maintaining prudent leverage and consistent unitholder returns.
In 2025, the company expects $40–$50 million in growth capital spending, including expansions in water treatment chemicals and ultra-pure acid production. Construction of the Cairo, Ohio ultra-pure acid plant is complete and ramp-up with key customers will begin in 2026. The Augusta, Georgia water products plant is on track for completion in early Q1 2026.
Polytec Acquisition Update
On August 14, 2025, Chemtrade announced an agreement to acquire Polytec, a southeastern U.S.-based water treatment solutions provider, for US$150 million, representing approximately 6.5x LTM Adjusted EBITDA. The closing is pending regulatory approval.
Capital Allocation and Financing Updates
During Q3, Chemtrade continued its disciplined capital management through unit repurchases and debt optimization initiatives. Distributions totaled $0.1725 per unit for the quarter (monthly payments of $0.0575 per unit), maintaining a conservative 25% quarterly payout ratio.
CFO Rohit Bhardwaj noted, “We remain focused on balanced capital deployment—returning capital through distributions and buybacks while funding high-return investments. Our leverage remains well below two times Adjusted EBITDA, underscoring our financial strength.”
Recent financing actions include the redemption of $100 million in 6.50% convertible debentures due 2026, completion of substantial issuer bids for 6.25% 2027 and 7.00% 2028 debentures, and the issuance of $250 million in 5.75% senior unsecured notes due 2032. Proceeds were used to repay debt and for general corporate purposes, further enhancing Chemtrade’s capital structure and lowering its cost of capital.
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