Israel Chemicals profit down 32% in third quarter

Stefan Borgas
Stefan Borgas

The company's third quarter revenue was $1.38 billion, down 11.6% from $1.56 billion in the corresponding quarter of 2014.

Israel Chemicals (TASE: ICL: NYSE: ICL) (ICL) has reported a fall in revenue and profit for the third quarter of 2015.

Third quarter revenue was $1.38 billion, down 11.6% from $1.56 billion in the corresponding quarter of 2014. The decline was due to: sale of non-core businesses that led to a decrease in sales of $84 million; currency fluctuations reduced revenue $74 million; lower quantities sold, mainly fertilizers, shaved off another $42 million; a decline in sales due to the impact of the fire at ICL Rotem worth $33 million; and a decrease in sales of bromine, bromine compounds and magnesium products as a result of the ramp up period following the employee strike at ICL Dead Sea and ICL Neot Hovav worth $30 million. This decrease was partly offset by the first-time consolidation of acquired companies which led to an increase in sales of $65 million and an increase in selling prices, mainly of phosphate fertilizers, bromine-based flame retardants and elemental bromine which contributed $17 million.

Net profit for the third quarter of 2015 was $121 million down 32.4% from $179 million in the corresponding quarter of 2014. Adjusted net profit for the third quarter was $154 million, down 14% from $179 million in the corresponding quarter, mainly due to the decrease in operating profit and due to a $29 million increase in financial expenses mostly from changes in the fair value of financial derivatives and revaluation of net short term financial liabilities.

The Company’s board declared that a dividend totaling $84 million, or $0.07 per share, will be paid on December 15, 2015, in respect of its third quarter 2015 results.

ICL president & CEO, Stefan Borgas said, “The third quarter was marked by our major effort to compensate for lower potash prices by executing our operations at lower costs. We also benefited from the end of the strike at two of our Israeli facilities. We achieved major progress in our strategic efforts to widen and deepen our sources of raw materials as well as our global operating platform by finalizing the establishment of our large-scale phosphate JV in China which positions us strategically in the fast growing Asian market for phosphate fertilizers and other phosphate downstream products.”

He added, “We also made the decision to expedite our transition from potash to Polysulphate at our ICL UK facility due to the latter’s major potential and lower production costs, as well as our depleting economical reserves of potash at the UK mine, illustrates our sharp focus on evolving our global business to meet the challenges confronting us and to take advantage of market opportunities. We look forward to benefiting from our strategic progress in future quarters, including our acquisition activity and groundbreaking R&D efforts to create new markets for the minerals which we have access to, such as our new range of food additives based on whey proteins and our bromine-based energy storage battery, while ever mindful of the need to achieve maximal operating efficiency in order to maximize returns for our shareholders.”

Published by Globes [online], Israel business news - www.globes-online.com - on November 12, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Stefan Borgas
Stefan Borgas
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