Chemtrade Reports Q2 2026 Results, Maintains Full-Year Adjusted EBITDA Guidance
Chemtrade Logistics Income Fund (TSX: CHE.UN; OTCQX: CGIFF) reported its financial results for the three and six months ended June 30, 2026, highlighting resilient operations, continued strength in its Acid and Sulphur Products business, and progress on strategic growth initiatives. Despite significant market volatility and pressure across several product categories, the company maintained its full-year 2026 Adjusted EBITDA guidance of $485 million to $525 million.
Chemtrade said second-quarter performance reflected the benefits of its diversified portfolio, the acquisition of Polytec, stronger pricing in selected acid and sulphur markets, and disciplined cost management. These factors helped offset lower chlor-alkali pricing, weaker sodium chlorate volumes and pricing, and the temporary impact of a maintenance turnaround at the company’s North Vancouver facility.
Second-Quarter Performance
Chemtrade generated $578.7 million in revenue during the second quarter of 2026, representing an increase of $82.0 million, or 16.5%, compared with $496.7 million in the same period of 2025.
The increase was primarily supported by the acquisition of Polytec within the Water Solutions segment, as well as higher selling prices for merchant acid, sulphur products and regenerated acid in the Acid and Sulphur Products segment. Higher pricing for certain water solutions products and stronger revenue in Brazil also contributed to growth.
These gains were partially offset by lower chlor-alkali netbacks and reduced volumes and selling prices for sodium chlorate in the Electrochemicals segment.
Adjusted EBITDA was $127.3 million, down $10.7 million, or 7.8%, from $138.0 million in the prior-year quarter. The decline was largely attributable to a scheduled maintenance turnaround at the North Vancouver chlor-alkali facility, which reduced second-quarter Adjusted EBITDA by approximately $7 million.
Excluding the turnaround impact, second-quarter Adjusted EBITDA was approximately $3.7 million, or 2.7%, below the prior-year period.
Despite the EBITDA decline, Chemtrade reported a substantial improvement in net earnings. Net earnings attributable to the period reached $42.9 million, compared with $9.7 million in the second quarter of 2025.
The improvement was driven by higher overall revenue, lower finance costs, a $1.9 million increase in other income and approximately $2.3 million in gains on investments. The company also recognized a $2.1 million income tax benefit associated with the expiration of the statute of limitations on an uncertain tax position.
Cash flow from operating activities increased to $91.9 million, up $6.8 million, or 8.0%, year over year. The improvement was primarily related to favorable working-capital movements, which more than offset the decline in Adjusted EBITDA.
Segment Performance
Chemtrade now operates through three primary business segments: Acid and Sulphur Products (ASP), Water Solutions (WS), and Electrochemicals (EC).
Acid and Sulphur Products
The ASP segment was the strongest contributor to year-over-year EBITDA growth during the quarter.
Revenue increased to $216.4 million, compared with $163.4 million in the second quarter of 2025. The increase was primarily driven by higher selling prices for merchant acid, sulphur products and regenerated acid.
Adjusted EBITDA rose to $53.2 million, compared with $43.5 million a year earlier. Higher pricing more than offset increased sulphur-related costs, resulting in stronger profitability across the segment.
Chemtrade continues to advance its ultrapure acid initiatives and is progressing through commercial and customer qualification stages with multiple customers. The company views these opportunities as an important component of its longer-term growth strategy.
Water Solutions
The Water Solutions segment benefited significantly from the recently completed Polytec acquisition.
Revenue increased to $181.9 million, up from $139.1 million in the prior-year quarter. The increase was primarily attributable to the acquisition, along with higher selling prices for water solutions products.
Adjusted EBITDA increased to $37.0 million, compared with $32.7 million in the second quarter of 2025.
While higher prices supported results, elevated input costs continued to pressure margins. Chemtrade noted that a significant portion of Water Solutions products are sold through annual fixed-price contracts that renew throughout the year. As these contracts are renewed, the company expects to progressively recover higher input costs through improved pricing over the coming quarters.
Chemtrade also continued investing in organic growth opportunities within the segment, positioning the business to benefit from a more normalized raw-material environment.
Electrochemicals
The Electrochemicals segment faced the most significant pressure during the quarter.
Revenue declined to $180.4 million, compared with $194.2 million in the second quarter of 2025. The decrease reflected lower chlor-alkali netbacks as well as lower sodium chlorate volumes and selling prices. Higher revenue from Brazil provided a partial offset.
Adjusted EBITDA was $61.2 million, compared with $92.1 million in the prior-year period.
Excluding the $7 million impact of the North Vancouver maintenance turnaround, EC Adjusted EBITDA declined by approximately $23.9 million year over year. The decrease was primarily caused by lower chlor-alkali netbacks and weaker sodium chlorate volumes and pricing.
Chemtrade said MECU netbacks declined by approximately $350 year over year, with roughly 80% of the decrease attributable to hydrochloric acid and chlorine.
Strong Balance Sheet and Capital Allocation
Chemtrade maintained a solid financial position at the end of the second quarter.
As of June 30, 2026, the company reported $1.3 billion of net debt and a Net Debt-to-LTM Adjusted EBITDA ratio of 2.55x. The company also had approximately $410 million of undrawn credit capacity, equivalent to US$289 million, in addition to $44.5 million in cash.
During the quarter, Chemtrade repurchased approximately 0.9 million units through its normal course issuer bid. Under the current program, which expires April 16, 2027, approximately 4.6 million units remained available for repurchase as of August 11, 2026.
The company also completed the redemption of approximately $4.3 million of 7.00% convertible debentures on June 30, 2026. Following the redemption, Chemtrade no longer has convertible debt instruments on its balance sheet.
Earlier in the year, Chemtrade increased its monthly distribution by approximately 4% to $0.06 per unit, or $0.72 per unit annually. The payout ratio was 47% during the second quarter and 45% over the trailing 12-month period.
2026 Guidance Maintained
Despite significant geopolitical uncertainty and price volatility affecting several of its products, Chemtrade reaffirmed its 2026 Adjusted EBITDA guidance of $485 million to $525 million.
Management acknowledged that continued market volatility makes forecasting more challenging, but said the company remains confident in the stability of its earnings, cash generation and balance sheet.
At the midpoint of the guidance range, Chemtrade would generate Adjusted EBITDA close to its record 2025 level, underscoring the significant improvement in earnings and cash-flow generation achieved over the past five years.
Based on current assumptions, including planned growth capital spending and capital-allocation activities, Chemtrade expects to finish 2026 with Net Debt-to-Adjusted EBITDA at approximately 2.5x and an implied payout ratio of around 40%.
The company also highlighted that the timing of maintenance capital spending will be more favorable in 2026. While approximately two-thirds of 2025 maintenance capital expenditures occurred during the second half of the year, Chemtrade expects less than half of its 2026 maintenance spending to occur during the second half.
Management Perspective
Scott Rook, President and CEO of Chemtrade, said the second-quarter results demonstrated the resilience of the company’s operations, diversified product portfolio and workforce.
Management emphasized continued progress integrating Polytec while advancing organic growth initiatives in Water Solutions and developing new ultrapure acid opportunities.
The company also successfully completed its North Vancouver maintenance turnaround and continued to operate effectively despite volatile chlor-alkali markets.
Chemtrade said its unchanged guidance reflects confidence in the underlying business and its ability to navigate market uncertainty while continuing to pursue its longer-term Vision 2030 objectives.
Looking Ahead
Chemtrade enters the second half of 2026 with a diversified portfolio, improving growth opportunities and a strong balance sheet. The company expects continued benefits from the Polytec acquisition, additional pricing recovery in Water Solutions, growth in merchant and regenerated acid, and progress in emerging ultrapure acid opportunities.
At the same time, management remains focused on navigating commodity-price volatility, geopolitical developments, input-cost pressures and changing market conditions affecting the Electrochemicals segment.
With its full-year guidance intact, disciplined capital allocation and ongoing investment in growth initiatives, Chemtrade remains focused on strengthening cash generation, maintaining financial flexibility and delivering sustainable long-term value for unitholders.
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