Thank you, operator, and thank you for joining the Q&A session for Chemtrade's fourth quarter and full-year 2025 results. I would like to remind everyone that today's call will contain certain forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties.

Actual results may differ materially from those expressed or implied. Additional information regarding these risks, uncertainties, and assumptions, as well as information on certain non-IFRS and other financial measures referred to today, can be found in our disclosure documents filed with the securities regulators and available on sedarplus.com.

One of the non-IFRS measures we'll refer to today is adjusted EBITDA, which is EBITDA modified to exclude non-cash items, such as unrealized foreign exchange gains and losses. While our slide deck and disclosure documents refer to adjusted EBITDA, we may refer to it as EBITDA during the call.

With that, we would now like to open the lineup for your questions. Thank you.

Operator?

Hi, good morning. Given the margin pressures and high sulfur costs in the SWC segment, are you expecting some relief going forward as contracts renew, and do you think segment EBITDA margins can match 2025 levels of 23% this year?

Yeah. I'll give you some context for margin.

As in 2025, we had cost escalations, particularly sulfur went up significantly. What happened in that situation is we try and pass through the incremental costs to our customers, but it's hard to mark those costs up.

Basically, we're trying to protect our EBITDA and passing costs, especially when they're so significant. What the effect of that is it actually reduces the margin percentage because your revenue goes up and costs are dragged along with it.

That's generally in our business, in SWC in particular, when costs are lower, margin percentage tends to be higher and vice versa. In 2026, we'll have to see how sulfur and other costs progress, but that's kind of the general rule is when costs spike up, margin percentage tends to come down, but we're protecting our EBITDA.

Rohit, just to add to that, I'll remind the listeners that in our water business, as we sell product to city municipalities across North America, we sell our product at fixed annual costs, and that's just the way this business operates and has operated for a long time. We sell our products at fixed annual prices that are determined by bids.

When raw materials go up, we'll take the hit in the short term on that, but it works vice versa as raw materials fall. We have contracts that roll in and out every month, whenever sulfur has a significant increase, like what we've experienced over the last 6 months, it takes us a little time to work on that.

Our water business has margin pressure for a few months as we work through those price increases, but we make it up over time. On the counter to that, our merchant acid business does a better job and can react with more rapid price increases whenever sulfur goes up.

That makes sense. Thank you.

With you guys breaking out the water chemicals into a separate segment going forward, to help with some of our modeling, are you able to provide some more detail on the new segment's revenue, EBITDA contributions, or margins? Secondly, to confirm, 100% of the new segment is coming out of the SWC segment and nothing from EC, is that correct?

Yes, it's all coming from SWC. At this stage, we're not ready to give you that breakout, but starting Q1, when we release Q1 in May, we will give you all the lines that you typically now see in our reporting segments.

I see. Thanks.

I'll turn it over.

Thank you.

Hi, good morning. I just wanted to play out the order of magnitude of what the year might look like.

Is it like the last couple of years where sequentially Q1 EBITDA higher, sequentially Q2 EBITDA higher, sequentially Q3 EBITDA even higher than that, highest of the year, then a drop-down seasonally in Q4? Is that order of magnitude the way to look at it?

Q2 and Q3 tend to be our highest quarters. One thing to keep in mind this year is it's the North Van turnaround year, which is in Q2.

Q2 will have a negative impact of those costs. In terms of sequentially, Q1 and Q4 tend to be the weakest ones.

The other thing to keep in mind is a little bit depends on how caustic is evolving as well. The seasonality impact is really Q2, Q3 being strong, the rest are specific factors that come into play in any given quarter around commodity pricing.

Joel, to add to that, part of that is going to depend on what happens with sulfur. That could play into it.

Then, obviously, as we're in the first quarter, caustic soda is weaker than what we put in our assumptions. We are planning on the second half of the year being stronger for caustic than in the first half.

That's helpful. Then on corporate costs, what should they look like in 2026 versus 2025?

In 2020 So,

firstly, the way the way we look at corporate costs are we look at in two buckets. One is kind of our what we call program expenses, and the other is long-term incentives that, fluctuate based on how the unit how the units are doing.

2025, as our unit appreciated considerably, so that resulted in in higher LTIP costs. Once you normalize for all that, we expect 2026 corporate costs on the program line to be similar to 2025.

It's we've given you kind of our outlook for LTIP, but that really does change. You can, we've given you that detailed assumption on on LTIP between $22 and $28 million bucks.

We came in at around, a little bit higher on the higher end of the range in 2025. Based on that, you can kind of model it out.

Thank you.

Okay.

Good morning, everyone.

Morning.

I was hoping you could give us some more detail on the timing and scope of the heavy maintenance plan for the SWC segment this year?

I'll do that. We have, on the SWC side, our regen acid plants are tied in to gasoline producers, and so we tend to take longer outages that are tied in with our customers.

We have one of our customers that does a significant turnaround every 5 years, but we have more heavy turnaround than what we've had the past couple of years, and so it's not anything unusual compared to what we've done over the past 10 years, but our turnarounds can be a little bit lumpy. Our turnarounds in 2026 are going to be a little heavier than what we saw over the last 2 years, but that's pretty much tied to the schedule for our significant customers.

Gotcha. Thank you.

On the Tulsa facility upgrades, what drove the decision for those investments? Also, if we tie in Cairo, how much of your future volume is currently spoken for?

Okay. What came out of that is, so as we work with our significant customers, the fabs, and as we have brought up our Cairo facility, the fabs are also looking for redundancy in supply and trying to get as close to the quality as at our Cairo facility as possible.

What drove it was requests from our major customers, the fabs, for redundancy of supply in between plants. We've been operating the Tulsa facility for many, many years, and we took some of the learnings from Cairo and have made investments in Tulsa, and we're very pleased with the quality of what we've been able to achieve in Tulsa.

The Tulsa material is sampled. It's going through the approval process at the fabs, but that's really what drove it was requests from the fabs for redundant supply.

Still, Cairo will be our higher-quality plant for sure, but we've made investments for Tulsa that we believe will meet advanced node quality. We're pretty happy with the quality improvements there, and, again, we're working closely with fabs now on approvals.

Beauty. Thanks.

Then just circling back on that, how are those approval processes going for Cairo?

Far, good. We have a lot of samples out.

I'll say the feedback we're getting is quite positive. Probably, I won't share more other than the fact that we do see sales volume ramping up in the second half of the year, so that's kind of on plan.

We're excited about that, and we'll have more details to come, but lots of samples out and starting sales in the second half.

Great color. Thanks.

I'll requeue.

Thanks. Good morning.

Sorry, I jumped on the call late, not sure if this was asked. Just on the caustic soda pricing environment, feels like the spot pricing is a bit lower than the $450 you assumed in your guidance.

I know there's some commentary in the prepared remarks. Can you maybe elaborate on your confidence level there'll be a recovery in pricing in the back half of the year?

Hey, Gary, this is Scott. Rohit will add some color there, too.

Look, Caustic soda is lower. It's lower than our assumptions, what we put in the assumptions.

The reason for that is tied basically to some oversupply, particularly in China. It's tied to right now weaker production of alumina in Asia and also tied in with overall weakness in pulp and paper.

I think the reduced prices that we're seeing right now were based on some shipments right before Chinese New Year. I'm hopeful that after Chinese New Year, they'll come back and prices will rebound a bit.

I think it may take through second quarter to see a rebound, but we're planning on prices to return closer to our planned level in the second half of the year.

That's right. We speak with the industry analysts obviously very frequently, and so the fundamentals that drive chlorine demand, which is mainly construction activity, and caustic, which is battery and alumina, the fundamentals have not changed.

It's very difficult always in Q1 to get direction with the Chinese New Year holiday, which is pretty prolonged. When we've talked to them, they have a pretty strong belief that the trend that's there will resume and continue with caustic rising up over the next few years.

Okay. Great.

Then second question, I listened in on the rezoning call from the North Van facility process earlier this week. I know it's early days, but assuming that gets approved, how does the growth capex look like there?

At first glance, looking at some of the slides, seems like it's a decent undertaking, correct me if I'm wrong. There's additional chlorine rail car loading building, there's removal of all existing liquid chlorine equipment, among others.

How should we think about the magnitude of that? Just want to make sure the $35 to $50 million of growth capex does not include any spend related to the North Van rezoning efforts?

Gary, you are correct that the 30 $35 to $50 million of our growth capex does not assume any money associated with North Vancouver. Where we spend out of our typical $120 to $130 million of sustenance capital, a fair amount of that goes to the North Vancouver plant.

Over a 5, 6, 7-year period, I don't think there will be a noticeable difference in our sustenance capital budget tied to the safety upgrades. We will be, as you call out, assuming that the rezoning is successful, we will be building a new chlorine loading facility, we'll be getting rid of liquid chlorine, but I think those projects will come close to being included in our standard sustenance capex budget for that site over a period of several years.

Again, we're not expecting or planning on a noticeable increase in our sustenance capex budget tied to that.

Okay. Great.

No, thanks for those comments. Maybe if I can sneak one more in.

Rohit, just these releases were based on unaudited financials. I don't think that was the case last few years.

Just wondering if you can provide a few comments on the reporting side of things?

Sure, sure. When you have an audit versus a quarterly review, there's less leeway for auditors in completing their testing in their files.

There's a lot more rigor to it, and every year, it's always a rush to get it all completed. I think this year the one additional factor which delayed it a little bit is the timing of the closing of KPAC, where there's a lot more work that needs to be done when you do an acquisition in terms of it's nothing earth-shattering, but there's just a lot of things you've got to do, including valuing their assets and we only closed this deal towards the end of November, which didn't give much time and put a lot of pressure on the audit that's already typically got pressure to it.

It's fairly innocuous. We feel good about the numbers, which is why we released them, and we are hoping that the audit will be concluded in short order and in this case, then we'll file all the full disclosure documents.

There's really no issues here. It's pretty innocuous.

Okay. Perfect.

Those are all my questions. Thank you.

Thank you.

Hey, thanks for taking my second round. When you guys refer to merchant and regen acid pricing returning to historical ranges this year, is there a specific year or period that we should use as the baseline for comparison there?

I think for merchant, what happened was, as you mentioned, there was some disruptions with some of our competitors, and so we had some spot business that we picked up and got to higher pricing. Regen didn't have as much effect on it, but so I think regen will be not much different than 2025, and merchant will be a bit lower and, again, it's hard to really point to a specific year because sulfur is such a big variable in pricing for merchant acid.

What you can assume is that the merchant acid will be off in 2026 a little bit compared to 2025. Again, we're talking at the margins here.

We're not talking about anything too significant. Yeah.

What I'll say is that I think it's important to continue to emphasize that our regen business performance has been steadily improving. Not by leaps and bounds, but steadily improving year-over-year for several years.

We expect that to continue. Very very pleased with the performance there, tied in with our reliability, our production, tied in with the outlook for alkylate production in North America.

Strong business, slight growth, but our business performance has been steadily improving step-by-step over the past many years. Merchant does tend to bounce around, and yeah, it's kind of hard to look at any Certainly, last year was a very, very strong year for merchant, but as Rohit just said, that's tied to some of our competitors having outages and with our reliability, we stepped in and supplied.

I think you probably go back and look at '23 and '24. I think those were more normal years for merchant.

It's good to remind you that about half of our volume in merchant acid is byproduct acid that we get from smelters. The way we've structured those contracts is that the smelter or our supplier gets the lion's share of price less freight movements.

That business tends to be relatively stable. It was just this spot opportunities that came up that were unusual.

Generally, the actual pricing is we're not as affected by pricing. We do take volume risk, but price tends to generally be passed through to our supplier.

Gotcha. Thanks.

Just one last one on the water chemical contracts in terms of sequencing through the year as you reprice with expiries. Any particular quarters that will see a larger volume or bigger clumps of renewals?

Not so much renewals, but there is seasonality there. You do tend to get heavier in the summer months.

There's just normal seasonality, but not so much on the timing of contracts.

Gotcha. Thanks.

I'll turn it over.

Thank you. Thank you, operator.

I'd like to thank everyone for joining the call today. 2025 was a record year for Chemtrade.

As I said in the remarks, I'd like to thank all of our employees for their hard work and great results in 2025. Thanks for attending the call today, and have a great day.

Thank you.