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Chemtrade Logistics (TSE:CHE.UN)
TSX:CHE.UN
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Chemtrade Logistics
(TSX:CHE.UN)
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Rating:73Outperform
Price Target:
C$16.00
▲(1.27% Upside)
Chemtrade Logistics' overall stock score is driven by strong earnings call results and positive technical indicators. The company's reasonable valuation and attractive dividend yield further support the score. However, financial performance is mixed due to high leverage and declining margins, which slightly temper the overall outlook.
Positive Factors
Revenue Growth
Chemtrade's double-digit revenue growth indicates strong demand for its products and services, enhancing its market position and supporting long-term financial stability.
Strategic Acquisitions
Successful integration of acquisitions like Thatcher Group and Polytec enhances Chemtrade's product offerings and market reach, supporting sustainable growth.
Strong Balance Sheet
A strong balance sheet with low leverage and high liquidity provides Chemtrade with financial flexibility to invest in growth opportunities and weather economic downturns.
Negative Factors
High Leverage
High leverage can limit financial flexibility and increase risk, potentially impacting Chemtrade's ability to invest in growth or manage economic challenges.
Cash Flow Challenges
Challenges in cash flow generation may hinder Chemtrade's ability to fund operations and growth initiatives, affecting long-term financial health.
Chlorine Price Softness
Continued softness in chlorine prices could pressure margins in the Electrochemicals segment, impacting profitability and cash flow.
Chemtrade Logistics (CHE.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.80B
Dividend Yield4.73%
Average Volume (3M)237.16K
Price to Earnings (P/E)16.3
Beta (1Y)0.98
Revenue Growth10.20%
EPS Growth-11.22%
CountryCA
Employees1,474
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)0.39
Shares Outstanding114,179,400
10 Day Avg. Volume226,508
30 Day Avg. Volume237,163
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)1.58
Price to Sales (P/S)0.72
P/FCF Ratio8.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$19.13Price Target Upside21.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Chemtrade Logistics Business Overview & Revenue Model
Company DescriptionChemtrade Logistics Income Fund offers industrial chemicals and services in Canada, the United States, and South America. It operates through Sulphur Products & Performance chemicals (SPPC), Water Solutions & Specialty Chemicals (WSSC), and Electrochemicals (EC) segments. The SPPC segment removes and/or produces, and markets merchant, regenerated, and ultra-pure sulphuric acid, sodium hydrosulphite, elemental sulphur, liquid sulphur dioxide, hydrogen sulphide, sodium bisulphite, and sulphides. This segment also offers industrial services, such as processing by-products and waste streams. Its WSSC segment manufactures and markets various inorganic coagulants used in water treatment, including aluminum sulphate, aluminum chlorohydrate, polyaluminum chloride, and ferric sulphate; and a range of specialty chemicals, such as sodium nitrite and phosphorus pentasulphide. The EC segment manufactures and markets sodium chlorate and chlor-alkali products, including caustic soda, chlorine, and hydro-chloric acid for the pulp and paper, oil and gas, and water treatment industries. Chemtrade Logistics Income Fund was founded in 2001 and is headquartered in Toronto, Canada.
How the Company Makes MoneyChemtrade generates revenue through the production and sale of a diverse range of industrial chemicals and specialty products. Its primary revenue streams come from the sale of chemicals used in various applications, including water treatment, mining, and manufacturing. The company also earns income from logistics services, which involve the transportation, storage, and handling of chemicals. Key partnerships with industrial clients in sectors like utilities, mining, and oil and gas facilitate long-term contracts that provide stable revenue. Additionally, Chemtrade benefits from economies of scale and operational efficiencies, allowing it to maintain competitive pricing and secure ongoing business with established customers.
Chemtrade Logistics Earnings Call Summary
Earnings Call Date:Nov 11, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with record-breaking EBITDA and growth across major segments. Despite increased corporate costs and challenges with chlorine pricing, the company remains on track with its Vision 2030. Strategic acquisitions and a robust financial position contribute to a positive outlook.Q3-2025 Updates
Positive Updates
Record-Breaking EBITDA
Chemtrade Logistics delivered the highest quarterly EBITDA in its history with double-digit year-over-year growth in revenue and distributable cash. Revenue increased by 12% and EBITDA by 10%.
Strong Segment Performance
The Sulphur and Water Chemicals segment saw a 19% revenue growth, while the Electrochemicals segment had a 12% increase in EBITDA year-over-year.
Positive Distributable Cash Flow
Distributable cash after maintenance CapEx increased by 18%, and on a per unit basis, it increased 24% year-over-year.
Favorable Market Conditions
Strong demand in the Water Chemicals segment, particularly in municipal and industrial markets, with successful price adjustments to offset raw material costs.
Strategic Acquisitions
Integration of the Thatcher Group is progressing well, and the acquisition of Polytec for USD 150 million is expected to enhance Chemtrade's water treatment solutions.
Robust Financial Position
Chemtrade maintained a strong balance sheet with a net debt-to-EBITDA ratio of 1.8x and ample liquidity of approximately USD 484 million.
Vision 2030 Progress
Chemtrade is on track to achieve its Vision 2030 targets, aiming for mid-cycle EBITDA of $550 million to $600 million by 2030.
Negative Updates
Increased Corporate Costs
Corporate costs increased year-over-year due to higher incentive compensation and legal costs, primarily related to the Polytec acquisition.
Chlorine Price Softness
The Electrochemicals segment faced lower prices for chlorine, which is expected to continue affecting the MECU netbacks negatively.
Delayed Polytec Acquisition
The closing of the Polytec acquisition was delayed due to the U.S. government shutdown affecting regulatory approvals.
Potential Refinery Outages
There is a possibility of modest impacts from U.S. refinery outages, which could affect the sulfuric acid business.
Company Guidance
During the Chemtrade Logistics Income Fund's third-quarter 2025 conference call, the company provided updated guidance for the entire year. Chemtrade reported a record-high quarterly EBITDA and expects 2025 to be a record year, surpassing the 2023 adjusted EBITDA of $502.6 million. Key financial metrics highlighted include a 12% year-over-year increase in revenue and a 10% rise in EBITDA, with distributable cash after maintenance CapEx growing by 18%. Chemtrade's Sulphur and Water Chemicals segment saw a 19% revenue increase, while the Electrochemicals segment's EBITDA grew by 12% year-over-year. The company also discussed a sustainable payout ratio of 25% in Q3 and 32% on a trailing 12-month basis. Additionally, Chemtrade updated its assumptions for 2025, anticipating North American MECU sales volumes of 173,000, a MECU netback increase of CAD 70, and sodium chlorate volumes of 272,000 tonnes. The company maintains a strong balance sheet, with a net debt-to-EBITDA ratio of 1.8x and liquidity of approximately USD 484 million.Chemtrade Logistics Financial Statement Overview
Summary
Chemtrade Logistics shows mixed financial performance with positive revenue growth and strong return on equity. However, high leverage and declining EBIT and EBITDA margins highlight potential risks. Improved cash flow generation is a positive, but careful management of debt and operational efficiency is crucial for sustained growth.Income Statement
Chemtrade Logistics has shown a positive revenue growth rate of 3.11% in the TTM, indicating a recovery from previous declines. The gross profit margin is stable at 24.22%, and the net profit margin is at 6.85%, reflecting moderate profitability. However, the EBIT and EBITDA margins have slightly decreased compared to previous years, suggesting some operational challenges.72
Positive
Balance Sheet
The company's debt-to-equity ratio is relatively high at 1.42, indicating significant leverage, which could pose financial risks. However, the return on equity is strong at 16.44%, showing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset structure.65
Positive
Cash Flow
Chemtrade Logistics has demonstrated a healthy free cash flow growth rate of 12.91% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.46, suggesting efficient cash conversion from earnings. However, the free cash flow to net income ratio has decreased, indicating potential cash flow management challenges.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.94B | 1.79B | 1.85B | 1.81B | 1.37B | 1.38B |
| Gross Profit | 472.82M | 430.55M | 420.65M | 353.90M | -3.85M | 33.73M |
| EBITDA | 413.03M | 417.42M | 562.33M | 448.99M | 92.91M | 119.51M |
| Net Income | 111.41M | 126.91M | 249.32M | 109.11M | -235.21M | -167.48M |
Balance Sheet | ||||||
| Total Assets | 2.30B | 2.28B | 2.11B | 2.16B | 2.05B | 2.50B |
| Cash, Cash Equivalents and Short-Term Investments | 18.74M | 25.50M | 21.52M | 72.57M | 13.91M | 12.51M |
| Total Debt | 1.02B | 899.26M | 863.95M | 1.04B | 1.19B | 1.38B |
| Total Liabilities | 1.54B | 1.47B | 1.40B | 1.59B | 1.67B | 1.89B |
| Stockholders Equity | 754.65M | 818.36M | 707.14M | 566.21M | 379.85M | 605.82M |
Cash Flow | ||||||
| Free Cash Flow | 147.55M | 162.00M | 235.07M | 253.75M | 132.90M | 184.87M |
| Operating Cash Flow | 350.48M | 347.80M | 401.46M | 369.19M | 219.04M | 261.95M |
| Investing Cash Flow | -202.94M | -185.80M | -118.46M | -108.88M | 96.53M | -74.79M |
| Financing Cash Flow | -145.51M | -159.30M | -333.53M | -203.00M | -314.12M | -187.86M |
Chemtrade Logistics Technical Analysis
Positive
15.80
Price Trends
14.57
Positive
13.91
Positive
12.33
Positive
Market Momentum
0.29
Negative
67.44
Neutral
83.06
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CHE.UN, the sentiment is Positive. The current price of 15.8 is above the 20-day moving average (MA) of 15.17, above the 50-day MA of 14.57, and above the 200-day MA of 12.33, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 67.44 is Neutral, neither overbought nor oversold. The STOCH value of 83.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CHE.UN.
Chemtrade Logistics Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$1.80B | 16.35 | 14.30% | 4.73% | 10.20% | -11.22% | |
71 Outperform | C$552.65M | 3.11 | 33.41% | ― | 20.52% | 1196.33% | |
66 Neutral | C$5.02B | 14.46 | 9.35% | 1.87% | -0.65% | 46.15% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
TSE:CHE.UN
Chemtrade Logistics
15.80
6.27
65.81%
TSE:MX
Methanex
64.97
-9.47
-12.72%
TSE:IFOS
Itafos
2.86
0.98
52.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.