SOURCE: Canexus Corporation

Canexus Corporation

August 05, 2015 18:44 ET

Canexus Announces 2015 Second Quarter Results

CALGARY, AB--(Marketwired - August 05, 2015) - Canexus Corporation (TSX: CUS) (the "Corporation" or "Canexus") today announced its financial results for the second quarter ended June 30, 2015.

Highlights

  • Cash Operating Profit ("COP") was $27.6 million for the second quarter of 2015, excluding North American Terminal Operations ("NATO"), which can be attributed to solid performance by our chemical business units.
  • Record COP achieved by North American Sodium Chlorate, reflecting strong sales, a weaker Canadian dollar and solid North American sodium chlorate demand. Proven operating results and future opportunities position this business unit to generate significant value going forward.
  • As previously announced, Canexus has entered into an agreement to sell NATO to Cenovus Energy Inc. for $75 million cash consideration, subject to adjustment. Expected closing date remains August 31, 2015.
  • Substantial progress has been made on the Business Improvement Program ("BIP"). The program is on track to successfully deliver $10-15M in annual savings.
  • The caustic modernization project and the anode refurbishment project at North Vancouver are expected to be completed on schedule and below budget. Full access to 100% of our production capacity will occur in early Q4/2015.
  • Advanced discussions ongoing with the Corporation's banks to potentially amend the Corporation's current bank facility to provide flexibility to repay maturing convertible debentures at year end.
  • The Board of Directors declared a quarterly dividend of $0.01 per common share payable July 15, 2015 to shareholders of record on June 30, 2015.

Financial Results

COP was $27.6 million for the quarter ended June 30, 2015 (Q1/15 - $29.4 million; Q2/14 - $27.4 million); the COP excludes any losses from operations and expenses associated with the sale of NATO announced June 4, 2015. Our Q2/15 results reflect higher North American Sodium Chlorate sales levels; the benefit of the weaker Canadian dollar on both our North American Sodium Chlorate and Brazil businesses; and realized savings from our BIP.

These positive results were offset by reduced hydrochloric acid ("HCl") sales volumes and prices due to the downturn in North American acid fracturing activity and one-time costs. One-time costs included a salt inventory adjustment within our North American Chlor-alkali business unit of $2.2 million, and $0.5 million in severance and professional fees, for a total one-time cash outlay of $2.7 million in Q2/15.

The NATO financial performance is reported in results from discontinued operations as it is an asset held for sale and all financial results associated with the asset are excluded from consolidated COP.

On December 31, 2015, $59.9 million of convertible debentures are due for repayment. Bank lenders have been engaged to discuss a potential amendment to the current bank facility to provide the Company with flexibility to repay all, or substantially all, of the convertible debenture from the facility at year-end. It is anticipated that any such amendment will be conditional on the closing of the NATO sale. While the discussions are advanced, there can be no certainty that any amendments will be successfully negotiated on terms satisfactory to Canexus, if at all.

Operational Results

North American Sodium Chlorate

Canexus' North American Sodium Chlorate business posted solid performance in the Q2/15. Record COP of $19.1 million (Q1/15 - $16.6 million; Q2/14 - $12.1 million) was achieved at our industry-leading, low-cost Brandon plant. We experienced higher demand from our pulp customers in Q2/15 than anticipated and expect this to continue through the remainder of the year. This business unit continues to benefit from the devaluation of the Canadian dollar relative to the US dollar, with approximately two-thirds of our sales volume exported to the US. North American sodium chlorate industry operating rates are expected to remain in the low to mid 90% range in the later part of 2015 due to an announced closure of a competitor's plant in the southeastern US. We expect this closure to generate opportunities for increased sales volumes in 2016.

North American Chlor-alkali

Canexus' North American Chlor-alkali business generated $1.3 million in COP for the quarter (Q1/15 - $8.1 million; Q2/14 - $9.8 million), or approximately $0.8 million after including inter-segment costs associated with loading caustic and acid from railcars to trucks at our NATO facility, which services are anticipated to be provided by a third party upon completion of our sale of the NATO asset. Q2/15 results also included a salt inventory adjustment of $2.2 million due to higher than estimated consumption rates in the period January 2013 to June 2015. Salt consumption for the period starting from 2013 was higher than expected due to flow restrictions in the brine saturators. The calculation to determine the differential between estimates and actuals is done routinely every couple of years. Process configuration changes completed in 2015 have reduced salt consumption below pre-2013 levels, as evidenced by subsequent evaluations, and the factor being used for estimates has been corrected to minimize future adjustments. The adjustment is not material for any prior periods.

As expected, HCl sales volume and prices showed continued softness through Q2/15. We estimate that demand from the oil and gas sector is down approximately 35 percent due to a decrease in global oil prices resulting in reduced drilling capital spend and consequently less demand for acid in fracturing. Price increase settlements for Q2/15 for chlorine and caustic soda, our two other major products, ranged from $20/MT to $50/MT as contracts allowed.

The caustic modernization project at North Vancouver is expected to be completed on schedule in October and is currently tracking below budget. Annual savings from this project are expected to be approximately $3.5 million from reduced stream usage of about 200,000 GJ/year, reduced base electricity load from smaller pump motors and the elimination of a dedicated steam plant operating position. In addition, our previously disclosed anode refurbishing program to repair the anodes is being completed and we should have full access to 100 percent of our production capacity in early Q4/2015.

South America

Canexus' Brazil operations generated COP of $7.4 million in the quarter (Q1/15 - $7.0 million; Q2/14 - $7.6 million). Brazil's operations continue to be highly stable with our primary customer running at high rates resulting in strong demand for our products which are sold under a long-term, cost plus, fixed US dollar margin contract. This business is also experiencing positive uplift from the devaluation of the Canadian dollar, due to our contract being paid in US dollars, and continuing stable merchant chlorine sales.

Business Improvement Program

Canexus initiated the BIP in March 2015. The ongoing benefits started to be realized in Q2/15. COP is estimated to improve by $10 million to $15 million annually from cost reduction and improved plant uptime. The full benefit is expected to be realized in 2016 and future years. Additionally, we plan to lower our investment in normalized working capital by not less than $10 million by the end of 2015 and to contain maintenance capital spending in future years to not more than $25 million (running average over a three year period) while improving operating reliability and manufacturing conversion efficiency and maintaining our strict adherence to safety.

Strategic Processes

As previously announced, Canexus has entered into an agreement to sell NATO in Bruderheim, Alberta to Cenovus Energy Inc. for $75 million cash consideration, subject to adjustment. The Purchase and Sale Agreement has an economic effective date of June 30, 2015, and an agreed closing date, subject to certain closing conditions, of August 31, 2015. All net proceeds will be used to pay down bank debt, as required under our credit facility.

The Corporation continues to hold discussions regarding the potential sale of our North American Chlor-alkali business at North Vancouver. There is no assurance that a transaction for this asset, if pursued, will be concluded.

"In the second quarter we accomplished many significant milestones that will better position the company for future value creation," commented Doug Wonnacott, President and CEO. "Firstly, we announced an agreement to sell the NATO asset. This streamlines the company's operating portfolio of assets back to our core competency of commodity chemical products. It also reduces our risk exposure to the volatile energy markets. Secondly, we implemented many process changes as part of our BIP that have started to generate significant revenue and cost improvements. This includes lowering our SG&A, and continuing efficiency gains by reducing operating and maintenance costs, optimizing operations and improving transportation logistics. These changes, coupled with our foundation of strong chemical assets, position us well to reduce debt, continue to improve business performance and create future value for shareholders."

Distributable Cash

  Three Months Ended
June 30
Six Months Ended
June 30
CAD thousands, except as noted 2015 2014 2015 2014
Cash Operating Profit 27,551 27,396 56,982 49,602
 Effect of Discontinued Operations (6,582) 1,671 (9,215) 1,676
 Interest Expense (8,253) (6,078) (15,678) (8,060)
 Realized Foreign Currency Translation Gains (Losses) (16,337) 249 (16,338) (8,850)
 Maintenance Capital Expenditures (7,618) (5,151) (12,221) (9,403)
 Provision for Current Income Taxes (1,967) (678) (3,707) (2,551)
 Pension Funding Lower Than (in Excess of) Pension Expense (316) (742) 575 (1,646)
 Severance Costs (1,947) (551) (501) 2,629
 Cash Settled Share Based Compensation (89) - (89) -
 Other (351) (715) (2,551) (1,015)
Distributable Cash (15,909) 15,401 (2,743) 22,382
         
Distributable Cash Per Share (0.09) 0.08 (0.01) 0.12
Dividends Declared Per Share 0.0100 0.1000 0.0200 0.2368
Cash Payout Ratio (Net of DRIP Participation) (9%) 92% (105%) 147%
Payout Ratio (12%) 118% (136%) 192%
     

Below is a reconciliation of net cash generated from (used in) operating activities to Distributable Cash of the Corporation for the three and six months ended June 30, 2015 and 2014.

   
  Three Months Ended
June 30
Six Months Ended
June 30
CAD thousands 2015 2014 2015 2014
Net Cash Generated from Operating Activities (20,799) 10,390 20,457 3,058
 Change in Non-Cash Operating Working Capital 10,967 7,727 (8,795) 23,417
 Non-Cash Change in Income Tax Payable and Interest Payable 3,613 3,613 (1,574) 3,406
 Interest Income 101 72 350 138
 Maintenance Capital Expenditures (7,618) (5,151) (12,221) (9,403)
 Cash Settled Share Based Compensation (89) - (89) -
 Operating Non-Cash Items (135) (548) (304) (695)
 Severance Costs (1,947) (551) (501) 2,629
 Discontinued Operations - Maintenance Capital Expenditures (2) (151) (66) (168)
Distributable Cash (15,909) 15,401 (2,743) 22,382
     

Segmented Information for the Three Months Ended June 30, 2015 and 2014

Canexus has a total of six electrochemical manufacturing plants -- four in Canada and two at one site in Brazil -- organized into three business units. Below is our first quarter performance by segment.

     
  North America      
Three Months Ended 
June 30, 2015
Sodium
Chlorate
Chlor-
alkali
South
America

 Other

 Total
Sales Revenue          
  Total Segment 67,837 48,648 26,233 - 142,718
  Inter-Segment(1) 86 - - - 86
Total Sales Revenue from External Customers 67,751 48,648 26,233 - 142,632
  Cost of Sales 39,361 30,862 20,673 (850) 90,046
Distribution, Selling and Marketing          
  Total Segment 9,996 18,277 137 424 28,834
  Inter-Segment - 461 - - 461
Total External Distribution, Selling and Marketing 9,996 17,816 137 424 28,373
General and Administrative 2,849 3,556 1,044 1,349 8,798
Operating Profit (Loss) 15,545 (3,586) 4,379 (923) 15,415
Add:          
Depreciation and Amortization 3,535 4,836 3,056 212 11,639
Share-based Compensation Recovery - - - 497 497
Cash Operating Profit (Loss) 19,080 1,250 7,435 (214) 27,551
Cash Operating Profit (Loss) Percentage 28% 3% 28%   19%
           
     
  North America      
Three Months Ended
June 30, 2014
Sodium
Chlorate
Chlor-alkali South
America

Other

Total
Sales Revenue          
 Total Segment 53,873 55,354 24,193 - 133,420
 Inter-Segment 86 - - - 86
Total Sales Revenue from External Customers 53,787 55,354 24,193 - 133,334
 Cost of Sales 34,191 32,440 17,806 39 84,476
Distribution, Selling and Marketing          
 Total Segment 7,952 16,475 253 583 25,263
 Inter-Segment(1) (2) - 606 - - 606
Total External Distribution, Selling and Marketing 7,952 15,869 253 583 24,657
General and Administrative 2,853 3,479 836 2,224 9,392
Operating Profit (Loss) 8,791 3,566 5,298 (2,846) 14,809
Add:          
Depreciation and Amortization 3,329 6,199 2,332 282 12,142
Share-based Compensation Expense - - - 445 445
Cash Operating Profit (Loss) 12,120 9,765 7,630 (2,119) 27,396
Cash Operating Profit Percentage 23% 18% 32%   21%
Notes:
(1)The North America Sodium Chlorate operating segment (i) sells sodium chlorate at market rates to the South America operating segment and (ii) provides transloading services at market rates to the North America Chlor-alkali ("NACA") operating segment for caustic soda transloaded from barges into trucks for delivery to NACA customers that are eliminated for financial reporting purposes.
(2)NATO charged transloading fees (approximating market rates charged by third party terminals) to the North America Chlor-alkali operating segment for hydrochloric acid and caustic soda transloaded from railcars into trucks for delivery to North America Chlor-alkali customers that are eliminated for financial reporting purposes.
  

Highlights for each business unit are as follows:

  • North America Sodium Chlorate:
    • Q2 2015 versus Q1 2015: Sales revenue for the North America Sodium Chlorate segment increased eight percent as a result of higher US and Canadian sales volumes (eight and three percent, respectively) and higher realized delivered prices in the US (two percent) resulting from the weakening Canadian dollar (three months ended June 30, 2015 - US $0.81 as compared to US $0.83 for the three months ended March 31, 2015). Cash Operating Profit Percentage increased from 26 percent to 28 percent as a result of higher realized netback prices (one percent) and production volumes (three percent) and lower per unit salt, electricity and natural costs more than offsetting higher fixed costs.
    • Q2 2015 versus Q2 2014: Sales revenue increased 26 percent in the second quarter of 2015 as compared to the same period in 2014. Increased US and Canadian sales volumes (24% and five percent, respectively) and delivered price increases (12%) fuelled by the weakening of the Canadian dollar (three months ended June 30, 2015 - US $0.81 as compared to US $0.91 for the three months ended June 30, 2014) more than offset small declines in offshore sales volumes. Cash Operating Profit Percentage increased from 23 percent to 28 percent with higher realized netback prices (eight percent) and production volumes (eight percent), along with lower per unit salt and natural gas costs, more than offsetting higher fixed costs and electricity costs.
  • North America Chlor-alkali:
    • Q2 2015 versus Q1 2015: Sales revenue for the North America Chlor-alkali segment decreased six percent due to lower Canadian HCl sales volumes (43 percent) and lower US market realized delivered prices for HCl (50 percent), offset somewhat by higher North American chlorine sales volumes (29 percent), higher US hydrochloric acid sales volumes (nine percent) and higher chlorine and caustic soda realized delivered prices in the US market (14 and five percent, respectively). The decline in Canadian HCl sales volumes was related to lower demand from the oil and gas sector as commodity prices continued to be under pressure, resulting in reduced drilling and hydraulic fracturing activity. Increases in US market chlorine and caustic soda realized delivered prices were primarily the result of the weakening Canadian dollar noted previously. Cash Operating Profit Percentage decreased from 16 percent to three percent as a result of shifts in product mix away from higher margin HCl into lower margin chlorine, lower realized MECU netback prices (10 percent), higher fixed, salt and electricity costs and a salt inventory adjustment of $2.2 million.
    • Q2 2015 versus Q2 2014: Sales revenue for the North America Chlor-alkali segment decreased 12 percent due to lower HCl and caustic soda sales volumes (28% and 11 percent, respectively) and HCl realized delivered prices (eight percent) more than offsetting higher chlorine sales volumes and realized delivered prices (nine percent and 40%, respectively) and higher caustic soda realized delivered prices (four percent). Consistent with the preceding paragraph, the declines in HCl sales volumes were driven primarily by demand reductions from the oil and gas segment, while increases in realized delivered prices were primarily seen in the US market and were the result of the weakening Canadian dollar. Cash Operating Profit Percentage decreased from 18 percent to three percent as a result of a shift in product mix away from higher margin HCl into lower margin chlorine, higher salt and per unit electricity prices, lower production volumes (six percent) and the salt inventory adjustment noted above.
  • South America:
    • Q2 2015 versus Q1 2015: Sales revenue for the South America segment increased four percent primarily due to higher chlorine and HCl sales volumes (17% and six percent, respectively) and caustic soda realized delivered prices (five percent) more than offsetting lower sodium hypochlorite sales volumes (10%) and lower HCl and chlorine realized delivered prices (eight percent and seven percent). Realized delivered prices under our US dollar fixed margin contract benefitted from the weaker Canadian dollar in the second quarter. Cash Operating Profit Percentage remained consistent at 28 percent as a result of lower chlorate production volumes and higher fixed costs being offset by higher chlor-alkali production volumes (six percent) and the benefit of the weaker Canadian dollar on US dollar fixed margin sales.
    • Q2 2015 versus Q2 2014: Sales revenue for the South America segment increased eight percent due to higher realized delivered chlorate, caustic soda and sodium hypochlorite prices (15%, eight percent and three percent, respectively) and higher HCl and caustic soda sales volumes (five percent and six percent, respectively) more than offsetting lower chlorate sales volumes (five percent) and lower HCl and chlorine realized delivered prices (16% and nine percent, respectively). Cash Operating Profit Percentage decreased to 28 percent from 32 percent as a result of significant fixed cost savings, higher chlor-alkali production volumes and the benefit of the weaker Canadian dollar on US dollar fixed margin sales being more than offset by 14 percent lower chlorate production volumes and higher electricity costs; the majority of which is passed on to our major customer.

General Market Fundamentals

North America Sodium Chlorate: Through June 2015, global pulp shipments rose 4.6 percent compared to the same period in 2014. Hardwood pulp shipments continue to lead the way, up nearly 10 percent for the same period. Combined producer inventory levels at June 2015 stood at 34 days, with bleached softwood and hardwood kraft inventories at 29 days and 34 days respectively. Both inventory levels are considered to be in balanced positions entering the second half of the year.

North America demand for sodium chlorate was stable in the second quarter with spring mill outages ending in late June. Sodium chlorate exports from North America totaled just over 65 thousand MT through May and are tracking with 2014 levels. Industry operating rates continue to be in the low 90 percent range and are expected to remain at this level through November, at which point capacity utilization is expected to increase due to the closure of a Tronox plant, announced for the fourth quarter of 2015. Price increase announcements were released in April for implementation as contracts permit.

North America Chlor-alkali: The chlor-alkali industry operating rate in North America increased 2.7 percent to 81.5 percent of capacity in the second quarter of 2015 as compared to the first quarter of 2015. This increase was due to improvement in demand from the vinyls segment and inventory restocking to offset the impact of ethylene supply shortages in the prior quarter. Caustic soda production increased in the second quarter consistent with the increased industry chlorine operating rate.

HCl burner operating rates declined in the second quarter due to a reduction in demand from lower drilling and hydraulic fracturing activity in the oil and gas industry and a temporary slowdown in consumption from the grain processing segment.

Pricing on a MECU basis (before the impact of HCl) increased in the second quarter due to the implementation of price increases for both chlorine and caustic soda. HCl prices continued to decline in the second quarter due to the excess supply market conditions.

South America: During the first five months of 2015, Brazilian pulp production and exports increased by 4.3 and 5.3 percent, respectively, compared to the same period in 2014.

Sodium chlorate demand from Canexus Brazil's major customer was slightly higher than expected in the second quarter of 2015 following lower than expected demand in the first quarter. The Brazilian chlor-alkali capacity utilization rate was at 82.4 percent in the second quarter of 2015 which was 2.7 percent lower than the same period in 2014. Canexus Brazil's chlor-alkali capacity utilization rate was 92.5 percent for the quarter ended June 30, 2015.

Financial Updates

  • Long-term Debt and Finance Expense:
    • Canexus has US dollar borrowings and a substantial portion of our revenues are denominated in or referenced to the US dollar. During Q2/15, we recorded realized foreign currency translation losses of $14.7 million (Q2/14 - $0.7 million) on long-term debt as a result of the repayment of US dollar denominated debt offset by unrealized foreign currency translation gains of $23.3 million (Q2/14 - $10.0 million). These amounts are included in finance income (expense).
    • Interest expense in the quarter was $8.2 million (Q2/14 - $6 million). Interest capitalized on major projects was $0.1 million in Q2/15 (Q2/14 - $1 million).
  • Other Income (Expense):
    • In Q2/15, mark-to-market fair value gains of $nil (Q2/14 - $1.4 million) and realized losses of $nil (Q2/14 - $0.2 million) were recorded on average rate range forward contracts.
    • In Q2/15, we recorded mark-to-market fair value gains on a cross currency swap of $0.7 million (Q2/14 - $0.8 million gain) and realized losses of $0.2 million (Q2/14 - $0.1 million). In Q3/11, we entered into a cross currency swap to effect the payment of interest in US dollars on the Series IV Convertible Debentures issued on June 30, 2011.
  • General and Administrative: General and administrative expenses were lower for Q2/15 as compared to Q2/14 primarily as a result of reduced head count.
  • Capital Expenditures: Capital expenditures in Q2/15 were $13.8 million, of which $0.9 million was spent on expansion projects, $7.6 million on maintenance projects and $5.3 million on continuous improvement projects. Expansion capital was primarily spent on the NATO unit train project and continuous improvement capital on the caustic modernization project underway at our North Vancouver chlor-alkali facility.
  • Provision for (Recovery of) Income Taxes: The deferred tax recovery in Q2/15 resulted from loss on measurement to fair value of NATO as a result of the announced sale. As of June 30, 2015, the Corporation had approximately $878.3 million of future tax deductions which can be used to shelter future taxable income in Canada.
  • Liquidity: At June 30, 2015, total borrowings under committed credit facilities were $373 million with remaining available undrawn capacity of approximately $63.2 million. Cash on hand at June 30, 2015 was $4.4 million.

Operating Results for the Three and Six Months Ended June 30, 2015 and 2014

   
  Three Months Ended
June 30
Six Months Ended
June 30
CAD thousands 2015 2014 2015 2014
Sales Revenue 142,632 133,334 282,289 266,165
Cost of Sales (1) 90,046 84,476 175,438 167,566
Gross Profit 52,586 48,858 106,851 98,599
         
Distribution, Selling and Marketing 28,373 24,657 54,340 50,865
General and Administrative (2) 8,798 9,392 18,746 21,704
Operating Profit 15,415 14,809 33,765 26,030
         
Finance Expense (4,550) (668) (19,093) (16,122)
Other Income (Expense) (53) 2,027 (2,577) 2,361
Income (Loss) Before Income Taxes 10,812 16,168 12,095 12,269
         
Provision for (Recovery of) Income Taxes        
 Current 1,967 678 3,707 2,551
 Deferred (57,552) 1,691 (57,965) 1,692
  (55,585) 2,369 (54,258) 4,243
Income (Loss) From Continuing Operations 66,397 13,799 66,353 8,026
         
Loss from Discontinued Operations (215,230) (2,409) (221,118) (3,957)
         
Net Income (Loss) (148,833) 11,390 (154,765) 4,069
Notes:
(1)Depreciation and Amortization included in the three and six months ended June 30, 2015 - $11.4 million and $22.7 million, respectively (three and six months ended June 30, 2014 - $11.9 million and $23.1 million, respectively)
(2)Depreciation and Amortization included for the three and six months ended June 30, 2015 - $0.2 million and $0.4 million, respectively (three and six months ended June 30, 2014 - $0.3 million and $0.6 million, respectively)
  

Financial Statements, Conference Call and Webcast

Financial Statements and Management's Discussion and Analysis ("MD&A") will be posted on the Canexus website at www.canexus.ca and filed on SEDAR. Management will host a conference call and webcast at 7 am MT (9 am ET) on August 6, 2015, to discuss the financial and operating results of the Corporation. A presentation will be available on our website to facilitate the conference call. Please call 1-416-340-8530 or 1-800-446-4472 outside of Canada and the USA. The conference call will also be accessible via webcast at www.canexus.ca or by following the link http://www.gowebcasting.com/6632. A replay of the conference call will be available until end of day ET on August 13, 2015. To access the replay call 1-800-408-3053 or 1-905-694-9451, outside of Canada and the USA, followed by passcode 2809690#.

Non-GAAP Measures

Cash operating profit, cash operating profit percentage, payout ratio, cash payout ratio and distributable cash are financial measures not determined in accordance with generally accepted accounting principles for publicly accountable enterprises in Canada ("GAAP"), but management believes they are useful in measuring the Corporation's performance. Readers are cautioned that these measures should not be construed as alternatives to net income or loss or other comparable measures determined in accordance with GAAP as an indicator of the Corporation's performance or as a measure of the Corporation's liquidity and cash flow. The Corporation's method of calculating non-GAAP measures may differ from the methods used by other issuers and accordingly, the Corporation's non-GAAP measures are unlikely to be comparable to similarly titled measures used by other issuers. Readers should consult the Corporation's MD&A for the three and six months ended June 30, 2015 filed on SEDAR for a complete explanation of how the Corporation calculates each such non-GAAP measure.

Forward-Looking Statements

This news release contains forward-looking statements and information relating to expected future events and financial and operating results of the Corporation and its subsidiaries, including with respect to: the anticipated annual savings attributable to BIP and the timing thereof; reductions in investment in normalized working capital and the containment of maintenance capital spending and the timing thereof; improvements in operating reliability and manufacturing conversion efficiency; North American sodium chlorate operating rates and anticipated demand and sales volumes in 2015; North American sodium chlorate capacity rationalization; full operating rates for North American chlor-alkali and the timing thereof; HCl demand; the timing and cost of completion of the caustic modernization and anode refurbishment project at North Vancouver;; expectations with respect to Canexus' ability and sources of capital to repay existing indebtedness and, to the extent repaid from Canexus' credit facility, the conditions thereto; expectations for the closing of the NATO sale, the timing thereof, the anticipated value to be received on closing and the use of proceeds therefrom; and expectations for the loading of caustic and acid from railcars to trucks at our NATO facility by a third party upon completion of our sale of the NATO asset. The use of the words "expects", "anticipates", "continue", "estimates", "projects", "should", "believe", "plans", "intends", "may", "will" or similar expressions are intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including market and general economic conditions, future costs, treatment under governmental regulatory, tax and environmental regimes and the other risks and uncertainties detailed under "Risk Factors" in the Corporation's Annual Information Form filed on the Corporation's SEDAR profile at www.sedar.com. Management believes the expectations reflected in these forward-looking statements are currently reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Due to the potential impact of these factors, the Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. Any financial outlook information contained in this news release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on Management's assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this news release should not be used for purposes other than those for which it is disclosed herein.

About Canexus

Canexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Our four plants in Canada and two at one site in Brazil are reliable, low-cost, strategically located facilities that capitalize on competitive electricity costs and transportation infrastructure to minimize production and delivery costs. Canexus targets opportunities to maximize shareholder returns and delivers high-quality products to its customers and is committed to Responsible Care® through safe operating practices. Canexus' common shares (CUS) and debentures (Series III - CUS.DB.A; Series IV - CUS.DB.B; Series V - CUS.DB.C; Series VI - CUS.DB.D) trade on the Toronto Stock Exchange. More information about Canexus is available at www.canexus.ca.

Contact Information

  • Further Information:

    Dean R. Beacon
    Senior Vice President, Finance and CFO
    Canexus Corporation
    (403) 571-7300

    Robin Greschner
    Investor Relations
    Canexus Corporation
    (403) 571-7356