Israel Chemicals (TASE: ICL: NYSE: ICL) released its third quarter financials today. Sales for the third quarter were $1,371 million, which compares with $1,440 million in the corresponding quarter of 2017, or with $1,280 million excluding divested businesses. Sequential sales were flat as a result of lower potash sales volume due to delayed supply contracts with customers in China and India.
The company reported operating profit of $196 million in the third quarter of 2018, which compares with $180 million for the third quarter of 2017, and net profit of $129 million, 54% higher than the net profit of $84 million in the corresponding quarter. Earnings per share were $0.10, versus $0.07 in the third quarter of 2017 and $0.08 in the second quarter this year.
Third quarter sales revenue is below the analysts' consensus of $1.48 billion, but earnings per share are in line.
Excluding the contribution of businesses that were divested during 2018, which included exceptional seasonal profit from the Fire Safety business in the third quarter of 2017, adjusted operating profit rose by 43%.
ICL says that it benefited from higher commodity prices, but also from its ongoing value-focused initiatives in its specialty businesses. Higher commodity and specialty prices more than compensated for the negative impact of lower sales volumes and higher raw materials, energy and transportation costs. Quarterly operating cash flow increased by 11% to $196 million, despite the divestment of high cash generating businesses.
ICL CEO Raviv Zoller said, "ICL's strong results for the third quarter were driven by improved market conditions and by the company's continuous focus on cost control and value oriented initiatives. Our overall strong business momentum continued despite a temporary decrease in potash sales volumes due to delays, this year, in signing supply contracts with Chinese and Indian customers.
"During the third quarter, we also successfully completed important adjustments to our organizational structure to better align with our strategy. They included, among other thing, the consolidation of our phosphate businesses into one segment and the formation of our Innovative Ag Solutions segment. We have set a course to develop new solutions for our customers, leveraging R&D and digital innovation."
ICL has declared a dividend of $0.051 per share, representing an increase of 20% in comparison with the third quarter of 2017 and reflecting an annualized dividend yield of approximately 3.5%.
ICL's share price is currently up 2.38% on the Tel Aviv Stock Exchange.
Published by Globes, Israel business news - en.globes.co.il - on November 1, 2018
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