At this time all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session.

Instructions will be provided at that time for you to queue up for questions. (Operator Instructions).

I would like to remind everyone that this conference call is being recorded today, August, 9, 2013. I will now turn the conference over to our host, Mark Davis, President and CEO.

Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen.

Thank you for joining us for our conference call and webcast today. As usual, joining me today is Rohit Bhardwaj, our Chief Financial Officer.

Before I commence the review I would like to remind you that our presentation contains certain forward-looking statements that are based on current expectations and are subject to a number of uncertainties and risks and actual results may differ materially. Further information identifying risks, uncertainties and assumptions and additional information on certain non-IFRS measures referred to in this call can be found in the disclosure documents filed by Chemtrade with the Securities Regulatory Authorities available at www.sedar.com.

Chemtrade posted solid results for the second quarter of 2013 for both the quarter and year-to-date sales volumes of most of our products in North America were higher than we realized in 2012. In our international division, sales volumes were lower for both the quarter and year-to-date.

Our diverse product and customer base as well as our risk-sharing business model continue to serve us well. For the second quarter of 2013 we generated distributable cash after maintenance capital expenditures of $21.4 million or $0.51 per unit, which is well in excess of our distribution rate of $0.30 per unit.

As expected we increased the rate of spending on maintenance CapEx over Q1 and our Q2 spending is a more appropriate indication of our annual run rate. However due to the significant under-spending in the first quarter of 2013 we expect the second half of the year to have higher capital spending than the first half as we execute on our 2013 capital plan.

In general terms economic conditions during the second quarter of 2013 seemed more unsettled than the second quarter of 2012. However demand for our products remained quite strong although we did experience a weakness in reagent acid volume and some specific regional pricing pressure on sulfuric acid.

These events are evident in our SPCC results which posted higher revenue than last year driven by increased sales volumes on most products, but was more than offset by the weaker reagent volume and regional sales pricing I mentioned. It appears as though this pricing pressure was transitory and pricing remains firm now although the reagent volume continues to be a potential concern.

Sulfuric is considered to be the widely used chemical in the world and is often regarded as a good indicator of economic activity. On a year-to-date basis we have realized higher sales volumes for sulfuric acid in 2013 relative to 2012.

We are encouraged by the continued strong North American demand for sulfuric acid, both because we see it as a broad general forecast of economic activity and also because it's our largest product by volume. I will have a few comments on our outlook for the balance of the year after Rohit reviews the quarter's financials.

Thank you, Mark. Good morning.

As Mark noted business conditions continue to be challenging in some of our markets during the quarter. Revenue was $217.5 million, a decrease of $10 million from 2012.

As with the first quarter of this year the primary reason for the decrease was lower revenues in the international segment. For the three months ended June 30, 2013 distributable cash after maintenance capital expenditures was $21.4 million or $0.51 per unit compared with $24 million or $0.58 per unit in 2012.

The main reason for the lower distributable cash this year is the under spending on CapEx in 2012. Aggregate EBITDA for the second quarter of 2013 was $36 million compared with $36.8 million in the second quarter of 2012.

Turning to segmented results for the quarter, SPPC generated revenue of $155.3 million and EBITDA of $37.6 million compared with $153.1 million and $39.2 million respectively in 2012. The main reason for the increased revenue was higher volumes for several products in the segment relative to 2012.

Despite the increase in revenue there was a decrease in EBITDA mainly due to lower sales prices and margins for sulfuric acid. Pulp chemicals reported second quarter revenue of $13.3 million compared with $11.4 million in 2012 and EBITDA of $2.7 million compared with $2 million last year.

As you’ll recall last year’s results were negatively affected by a major customer operating issues. International reported revenue of $49 million for the second quarter compared with $63.1 million in 2012.

This reduction in revenue reflected lower prices and volumes of sulfur caused by the generally weak conditions in international markets. EBITDA for the quarter was $2.7 million, slightly lower than the $2.8 million last year.

As we had mentioned in the past our business model has to mitigate the impact of typical chemical commodity risks on financial results. Maintenance CapEx in the second quarter were $8.9 million compared with $6.2 million in 2012.

This is inline with our run-rate for the year although on a year-to-date basis we are still significantly underspent. We continue to expect that 2013 maintenance CapEx will range between $35 million and $40 million.

Excluding unrealized foreign exchange gains and losses corporate costs during the second quarter of 2013 were $6.9 million, just slightly slower in the second quarter of 2012. LTIP expenses for the second quarter were $1.1 million lower than the second quarter of 2012.

Our balance sheet at June 30, 2013 was in fine shape. As at June 30 $218.1 million was drawn on at an approximately $400 million credit facility leaving a significant amount of liquidity.

Our senior leverage ratio remains below two times EBITDA. During the second quarter we modified our long-term debt agreement to further extend the maturity date of the facility by one year to March 2018.

All other terms and conditions including pricing remains relatively unchanged. I’ll now hand the call back to Mark.

Thank you, Rohit. Chemtrade had a solid first half of 2013, despite economic conditions that sometimes felt more unsettled than the year before, although not reflected in any reduction in demand for our products.

As we’ve said many times before we’re not immune to these economic conditions but our operating results over the past several years are proof that our business model works in mitigating the effect of different conditions on our results. The second quarter was very much a normal course quarter for Chemtrade.

Demand for our products and services were steady, our plants operated well and we continued our efforts to strengthen and improve the business. We maintained our focus on operational excellence supply high reliability and an engaged workforce.

In addition to these initiatives improving our operating liability, other initiatives have also improved the impact we have on the environment. I thought I would use this as an example of the combined success of appropriate capital deployments and an engaged workforce.

Some of you may recall that several years ago the U.S. Environmental Protection Agency imposed improvements on facilities across the entire sulfuric acid industry.

In 2009 we and some other companies entered into a consent decree which essentially stated that the EPA would not prosecute if we made certain environmental improvements to our facilities. Under the terms of the consent decree the environmental improvements had to be implemented at the various facilities covered by the decree by certain dates and then the facilities must be operated within certain parameters or risk incurring penalties.

There is an ability for a particular plant to terminate the effects of a consent decree if that facility is able to operate within the parameters for a year and thus avoid the possibility of this consent decree penalties being imposed. I am very pleased to report that since 2009 we have not only implemented the required environmental fixes at all of the facilities but we have also been able to terminate our Tulsa facility from the consent decree and are on track to be able terminate the other facilities as time lines allow.

Although it may not be readily appreciated by those not in the industry the ability to construct the capital improvements on time and on budget and then quickly satisfy the authorities of improved operation is a great testament of the caliber of Chemtrade’s workforce. This is just one example of the good work going on within Chemtrade which is what we are referring to when we talk about operational excellence.

As well as optimizing our existing assets we continue to look for opportunities to expand the size, scale and scope of our business with new businesses that complement our business model. We remain confident in our ability to meet our objectives of providing our unit holders with both yield and growth.

We thank you for your attention and operator we’ll be happy to answer any questions somebody might have.

Good morning everyone.

Hey Jeremy.

And so you said that the sulfuric acid pricing has firmed up. Can you may be give us a sense of what the magnitude of that would be and may be how you see it progressing throughout the year?

Yeah it is and always you have to talk different regional markets right. So as a general statement is North American pricing actually remained pretty firm throughout, but with the amount of volumes that we sell, even a relatively modest change in pricing actually flows through to earnings.

So there was a slight decrease in some regions in the second quarter and which seemed to have stabilized now. So on a percentage basis might have been I don’t know 2% or 3% or something like that.

Rohit Bhardwaj Yeah, not may be even less than that, it was very small difference.

Interesting and for reagent, I don’t know if you can tell us maybe on an EBITDA basis, what do you think the effect was for SPPC?

Yeah probably the difference year-over-year in the SPPC EBITDA as probably half attributable to acid pricing as we mentioned and half attributable to reagent volume.

Okay. And may be a longer term question with the reduction or potential reduction in phosphate fertilizer pricing do you see this having effect on your acid pricing over the long term?

It really shouldn’t. It is, I think as you know we sell very little into the fertilizer industry.

They are largely producing for themselves. So the knock on effect on our North American acid business which is the large part of our acid business really should not be significant.

Okay and as you know the fertilizer guys as Mark mentioned make their own acid and sulfur has already dropped quite a bit in cost. That really is what the fertilizer guys will benefit from that because they will have lower input cost into their fertilizer manufacturing.

But usually your pricing, I mean over the long term would be affected by low pricing in many markets is that not correct?

No, that’s really not correct. It is again a great general statement right.

Sulfuric acid market is very regional market governed by regional supply demand characteristics. Because again as a general statement acid doesn’t like to travel a long way because of the freight component, as a component of cost.

So what drives acid pricing more is the regional supply demand characteristics between supply of byproduct acid and other plants producing acid and generally regional demand? So we are more affected by I think regional economic activity and significant supply disruptions than we are necessarily by any particular product.

Okay and finally you did mention growth, wondering what the market is looking like today for acquisition as far as valuation.

Valuation is as I normally say there is always stuff for sale in the chemical industry. We have to find assets that we like, fit our business model and then you get to valuations.

And I think valuations have come down a little bit with a little bit of pressure, at least forward thought on a potential firming of interest rates. But having said that is there are many sponsors sitting with lots of capital and there is great access to debt capacity, relatively low interest rates and for bunch of people almost non-existing covenant packages.

So valuations are at the higher end of actually I think what's reasonable these days. Doesn’t mean we won’t find something but I think we have shown a history of being pretty cautious but not over paying for assets that we acquire.

Sure. Thanks so much.

Thank you.

Hi, good morning. Just following up on the question on the reagent.

You mentioned that the volumes I guess were lighter there and you had some concerns maybe going forward. Can you just give a little bit more backgrounder or color on what’s causing that?

Yeah, sure. So reagent acid demand is driven by gasoline and particular alcoholic production within the gasoline pool.

So as a great general statements right is following the economic slowdown, a few years ago as Americans in particular started driving less so the demand for gas came down. As the economy improved a bunch of that demand pickup is being somewhat counteracted by more efficient fuel vehicles.

So even though the economy is a little better which would increase demand is the auto fleets are getting more efficient. So the question really is when does economic growth offset improvement in efficiencies of vehicles that are being driven.

So that’s the story and so if the U.S. economy keeps on pickup speed, gas demand should go up, output demand should go up, reagent demand should go up.

Okay, great. That’s very helpful.

And then just on in the pulp chemicals. How are you seeing the sodium chlorate market in terms of pricing?

Are you seeing it stay fairly steady state here and yeah just any color you can provide that will be great?

Yeah I would say firm maybe a slight increase. I will also say that as is 65%-70% of what we sell is sold under a fixed term contract that isn’t affected by the market pricing.

So if you are looking for a real window on the merchant chlorate market pricing environment is frankly we are not the best guys to give it to you.

All right, great. Well, that’s it for me.

Thanks. I will turn it over.

Thank you.

Yeah, good morning guys.

Good morning, Bill.

Two questions. One has to do with the amortization charge which seemed to go up quite a bit in this last quarter from where it was in the first quarter or the second quarter of last year.

What would be the reason for that?

So we have been amortizing our intangibles and we did have one, we did step up the amortization on some of our intangibles, based on our assessment of the remaining life of customer contracts. So that’s really the reason why there is that slight increase.

I think you would notice there was a $1.5 million increase in the quarter.

Right.

And that was basically would be ending of SO2 production by [Vale]. So we used to buy SO2 for many, many years from Vale.

They discontinued SO2 production in Q2. So we have some remaining intangibles less associated with that contract that we wrote off.

So would the number for the second quarter be the likely number going forward?

No, so the second quarter one has the sort of higher write-down of this one contract. So Q3 should go back to the more normal run rate which would be like the Q1 number.

Okay, great. And the second question is what's your best guess on what’s your current taxes might be going forward over the next two or three years assuming your operations more or less stay the same?

You know our cash taxes generally range about $3 million or so a year and the biggest volatility in that comes from our international business. If you look back we made a lot of money in it international business even though we pay low tax rates there, our current taxes go up because we have limited tax pools in the international business.

But in North American business and including that, on this kind of earning levels about a $3 million-$3.5 million range is a good cash tax number.

Okay that’s great. Thanks so much guys.

Nice to hear from you Bill.

Thank you. Rohit, would you have at this point an estimate for CapEx next year?

Well we don't, we haven’t done our formal planning process but based on what we look at we would think that, that $35 million to $40 million for CapEx should be still a reasonable number. That will get firmed up as do a more detail plan and on the economic so the non-[inaudible] CapEx we have a fair bit of spending that we think will conclude this year.

So for next year I would say we don't have a lot on horizon but if some interesting opportunities come, we obviously encourage that kind of spending because it generally a return associated with it.

Great, thank you.

Thank you.

Hello again. Just a quick follow-up on the reagent side.

So the customers are they kind of just lowering volumes or are they shutting down for a period of time or how exactly does that look like?

They are just running at lower utilization rates. You generally don't shut these things down, right?

So they are running it low. I don't have the number handy.

I think they are running at kind of 88% utilization rate as opposed to like 92. But that’s a difference that will make a difference.

And I think also I mean Mark’s comments on the long term view of the industry, if you are looking at just a very micro Q2 this year versus Q2 last year there were actually some specific operating issues that a few of our reagent customers had, which caused that delta from Q2 to Q2. I think the other comments are more long veins on the industry.

I see. Okay, thank you.

Thank you.

As usual we thank you all for your interest and look forward talking to you again at the end of the third quarter. Thank you.