Chemtrade Logistics Income Fund announced its unaudited financial results for the three- and twelve-month periods ended December 31, 2025, delivering record annual Adjusted EBITDA and reaffirming its strengthened financial position following a year marked by disciplined capital allocation, strategic acquisitions, portfolio optimization, and resilient operating execution across its Sulphur and Water Chemicals (SWC) and Electrochemicals (EC) segments; the Fund confirmed that audited financial statements and accompanying MD&A are expected to be filed in March 2026, and management emphasized that 2025 performance reflects both supportive external market conditions in acid markets and the cumulative impact of multi-year operational excellence initiatives designed to enhance margins, reliability, and long-term cash generation.
Record Revenue and EBITDA Performance in Full Year 2025
For the full year 2025, Chemtrade generated revenue of $1,997.8 million, representing an increase of $210.7 million or 11.8% compared to 2024; excluding foreign exchange impacts and the prior-year biennial maintenance turnaround at the North Vancouver chlor-alkali facility, revenue was $171.0 million higher than 2024, driven primarily by higher selling prices and volumes for merchant acid, water solutions products, and Regen acid within the SWC segment, alongside improved pricing for caustic soda and sodium chlorate in the EC segment; these gains more than offset softer MECU volumes and lower chlorine pricing, demonstrating the resilience of Chemtrade’s diversified product portfolio and customer base; Adjusted EBITDA reached $507.4 million, the highest annual level since the Fund’s inception, marking a year-over-year increase of $36.6 million or 7.8%, and excluding foreign exchange and maintenance turnaround effects, Adjusted EBITDA rose $8.8 million compared to 2024, supported by stronger margins in merchant acid, sodium chlorate, and Regen acid.
Earnings Growth, Cash Flow Expansion, and Distributable Cash Strength
Net earnings for 2025 totaled $139.4 million, increasing $12.5 million year-over-year, reflecting favourable unrealized foreign exchange gains, higher Adjusted EBITDA, reduced income tax expense, and lower losses on disposal and write-down of property, plant, and equipment, partially offset by higher depreciation, amortization, finance costs, and a recorded impairment of PPE; cash flows from operating activities reached $355.1 million, an increase of $13.0 million or 3.8%, primarily due to improved EBITDA performance offset in part by working capital increases; distributable cash after maintenance capital expenditures rose to $228.0 million, up $14.9 million or 7.0%, translating to $1.99 per unit, an increase of 10.8% year-over-year, underscoring the Fund’s enhanced capacity to return capital to unitholders while sustaining essential maintenance spending; the payout ratio for 2025 was a conservative 35%, reinforcing management’s commitment to balanced capital allocation.
Distribution Increases and Significant Capital Returns
Chemtrade increased its monthly distribution in January 2025 by approximately 5% to $0.0575 per unit, or $0.6900 annually, and subsequently raised the distribution again in January 2026 by roughly 4% to $0.06 per unit, or $0.72 annually; throughout 2025, the Fund remained active under its Normal Course Issuer Bid (NCIB), returning approximately $100.8 million to unitholders through the repurchase of 8.9 million units, reflecting management’s confidence in intrinsic value and long-term cash generation; these actions highlight Chemtrade’s disciplined approach to deploying excess capital between distributions, buybacks, growth investments, and balance sheet optimization.
Strategic Balance Sheet Optimization and Debt Refinancing
During 2025, Chemtrade executed several initiatives to strengthen and optimize its capital structure, including reducing convertible debentures by approximately 90% and issuing a new series of unsecured notes bearing a 5.75% coupon and maturing in 2032; year-end Net Debt stood at $1.2 billion, with a Net Debt to LTM Adjusted EBITDA ratio of 2.3x compared to 1.8x at the end of 2024, with the increase primarily attributable to debt incurred to finance acquisitions; despite this increase, liquidity remained robust, with US$370.3 million undrawn on credit facilities and $27.4 million in cash, providing ample flexibility for operational needs and growth opportunities; management emphasized that the current leverage profile remains prudent and supportive of both investment-grade ambitions and sustainable capital returns.
Water Portfolio Expansion Through Targeted Acquisitions
Following several years focused primarily on organic growth, Chemtrade expanded its water solutions portfolio through the acquisition of Polytec, Inc. and selected assets of Thatcher Group Inc. for a combined purchase price of US$180 million; these transactions broaden Chemtrade’s geographic reach and product offering within the growing water treatment market, aligning with long-term secular demand drivers including municipal infrastructure renewal, industrial water reuse, and environmental compliance; integration efforts are progressing in line with expectations, and early-stage growth initiatives are already underway to expand customer penetration and enhance operational synergies; management reiterated confidence that these acquisitions will contribute meaningfully to earnings and cash flow over time while supporting long-term financial targets.
Fourth Quarter 2025 Performance Overview
In the fourth quarter, revenue totaled $502.0 million, an increase of $55.5 million or 12.4% year-over-year, driven primarily by higher selling prices and volumes of merchant acid and improved contributions from water solutions and Regen acid in the SWC segment, partially offset by weaker MECU volumes and netbacks in the EC segment; Adjusted EBITDA for the quarter was $98.2 million, down $10.4 million or 9.6%, reflecting lower margins for most key products outside merchant acid, higher input costs for sodium nitrite and ultrapure sulphuric acid, and softer chlor-alkali market conditions; net earnings rose sharply to $38.3 million due to favourable unrealized foreign exchange gains, lower finance costs, and the absence of prior-year impairment charges; cash flows from operating activities increased modestly to $85.5 million, aided by lower working capital requirements and reduced income taxes paid; distributable cash after maintenance capital expenditures declined to $16.7 million or $0.15 per unit, reflecting lower EBITDA and increased maintenance spending during the quarter; the Fund repurchased approximately 1.9 million units during Q4 under the NCIB program.
Segment Performance: SWC and EC Dynamics
The SWC segment generated full-year revenue of $1,230.7 million and Adjusted EBITDA of $288.6 million, benefiting from higher merchant acid volumes and pricing, stronger Regen acid demand, and improved sulphur product pricing; excluding foreign exchange effects, SWC revenue rose 16.9%, while EBITDA increased 5.8%, partially offset by higher input costs for sodium nitrite and ultrapure sulphuric acid; in Q4, SWC revenue rose 24.5% on a comparable basis, although EBITDA declined modestly due to cost pressures and water solutions margin compression; the EC segment recorded full-year revenue of $767.0 million and Adjusted EBITDA of $345.7 million, with improved pricing in caustic soda and sodium chlorate offsetting weaker chlorine pricing and lower MECU volumes; excluding foreign exchange and maintenance impacts, EC EBITDA increased 1.7% year-over-year; in Q4, EC revenue declined 3.9% on a comparable basis, with EBITDA falling due to weaker MECU netbacks, particularly on the chlorine side of the molecule; MECU netbacks decreased approximately $60 year-over-year in 2025 and approximately $40 in Q4, highlighting ongoing softness in select chlor-alkali markets.
Corporate Costs and Operational Discipline
Corporate costs increased to $126.9 million in 2025 from $113.7 million in 2024, reflecting higher long-term incentive plan expenses, transaction-related costs associated with the Polytec acquisition, and legal expenses; in Q4, corporate costs declined year-over-year due to lower realized foreign exchange losses, reduced short-term incentive compensation, and lower professional fees, partially offset by higher long-term incentive expenses; management underscored that disciplined cost control remains a strategic priority, particularly amid variable commodity cycles.
Guidance Reaffirmation
Chemtrade reaffirmed its 2026 Adjusted EBITDA guidance range of $485.0 million to $525.0 million, with the midpoint broadly consistent with 2025’s record result; management noted that 2025 performance benefited from unusually strong acid market conditions and that 2026 guidance assumes normalization to historical ranges, softer chlor-alkali markets, and a maintenance-heavy year including biennial work at the North Vancouver facility; these headwinds are expected to be partially offset by organic growth initiatives, contributions from recent acquisitions, and continued operational efficiency improvements; President and CEO Scott Rook emphasized that Chemtrade enters 2026 from a position of strength, supported by operational excellence, portfolio diversification, disciplined financial management, and a clear strategy to create long-term unitholder value through sustainable cash flow generation, prudent leverage, targeted investment, and consistent capital returns; as the Fund builds upon five years of step-change improvements in EBITDA and cash flow, management remains confident in its ability to navigate cyclical volatility while advancing strategic growth priorities and maintaining a resilient financial foundation.
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