Israel Chemicals Ltd. (TASE: ICL) (ICL) reported its first quarter results this morning.
ICL’s revenues for the first quarter of 2011 totaled $1,528 million, up 11% compared with $1,383 million in the first quarter of 2010. The company said that the growth reflected an increase in selling prices, countered partially by reduced quantities of potash sold due to the 44-day strike at Dead Sea Works during the period Revenues from Europe and North America increased, reflecting increased regional demand for fertilizers, bromine and brominated compounds.
Gross profit for the first quarter totaled $638 million, up 14% from $559 million in the corresponding period of 2010, reflecting primarily higher selling prices, countered partially by a rise in raw material costs and reduced quantities of potash sold. Gross margin for the period rose to 41.8% compared with 40.4% in the first quarter of 2010.
Operating profit for the quarter increased by 19% to $361 million from $304 million in the first quarter of 2010, reflecting the improved gross margin.
Net profit to shareholders for the first quarter of 2011 increased by 16% to $280 million from $240 million in the first quarter of 2010.
Analysts had expected a lower profit, of $256 million, and revenue of $1.43 billion. The operating profit for the quarter was also higher than the estimates of $324 million.
The ICL board declared today that a dividend totaling $195 million will be paid on June 28, 2011 in respect of its first quarter 2011 results.
ICL said that the first quarter of 2011 was its second best first quarter on record (second only to the first quarter of 2008, which was an exceptional “spike” year for the fertilizer industry) despite the Dead Sea Work’s 44-day strike during the quarter which impacted the quantity of potash sold. The company said that this reflected the industry’s improving price environment together with record sales for ICL IP.
At the end of the first quarter, the company’s net debt totaled $1,049 million, a $391 million increase compared with December 31, 2010.
During the first quarter, the Dead Sea Works Workers’ Committee carried out a 44-day strike, representing nearly half of the quarter. As a result, Dead Sea Works’ first quarter potash production was reduced by approximately 450,000 tons, though production and stockpiling of carnallite was maintained at its normal rate. The company projects that it will be able to use the carnallite inventory over the next few years, and that it will be able to ship a large portion of the sales that were delayed because of the strike by the end of the year.
In February 2011, ICL signed new contracts under which it will supply 500 thousand tons of potash to Chinese customers during the second half of 2011 at prices similar to those signed recently with other market players.
ICL is controlled by Israel Corporation (TASE: ILCO).
Published by Globes [online], Israel business news - www.globes-online.com - on May 16, 2011
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