Israel Chemicals (TASE: ICL: NYSE: ICL), controlled by Idan Ofer-dominated Israel Corporation (TASE: ILCO), today reported good third quarter results, with sales totaling $1.44 billion, 4.1% more than in the corresponding quarter in 2016.
Higher quantitative sales of fire safety products and phosphoric acid, combined with a drop in sales of phosphates, phosphate fertilizers, and milk proteins (by Israel Chemicals Advanced Food Ingredients) affected the composition of Israel Chemicals' revenue in the quarter. Another positive influence on the company's results was a rise in potash and bromine-based product prices, compared with the corresponding quarter last year. The strengthening of the euro against the dollar also benefited the company.
Streamlining and cutting various expenses gave Israel Chemicals a $180 million operating profit in the third quarter, compared with a $331 million operating loss in the corresponding period last year (when the company had a $522 million expense item for a one-time write-off for the termination of its activity in Ethiopia and a halt in its investments in a new information system).
Unadjusted operating profit (excluding one-time items) grew 31% to $215 million in the third quarter, mostly as a result of a $20 million reduction to $60 million in management and general expenses.
Financing expenses were down 20% to $36 million, enabling the company to report an $84 million net profit, compared with a $340 million net loss in the third quarter of 2016. Adjusted net profit was $115 million, down 4.1%, compared with the corresponding quarter last year.
Third quarter potash sales totaled $360 million at an average price of $217 per ton, 9% more than in the corresponding period last year, while phosphate sales declined 16% to $564 million.
Israel Chemicals' cash flow from operations in the third quarter amounted to $176 million, $73 million less than in the corresponding quarter last year. The company will distribute a $57 million dividend.
Sales in the first nine months of the year totaled $4 billion, slightly more than in the corresponding period in 2016. Operating profit was $440 million, compared with a $75 million operating loss in the corresponding period last year. Net profit in January-September was $209 million, compared with a $154 million loss in January-September 2016.
With the steep fall in potash prices in the background, Israel Chemicals' share price has fallen nearly 40% over the past three years, pushing its market cap down to NIS 19 billion.
Commenting on his company's results, acting Israel Chemicals CEO Asher Grinbaum said, "ICL delivered strong results for the third quarter, benefitting from the excellent performance of our Advanced Additives and Industrial products business lines. Operationally, we continued our efforts to reduce G&A expenses and to generate positive free cash flow, while maintaining a dedicated focus on efficiency and excellence to improve the competitive position of our assets. We remain committed to balancing our business by growing our specialty businesses which, for the first time, accounted for over half of our sales as well as nearly 70% of our operating profit in the third quarter."
Published by Globes [online], Israel Business News - www.globes-online.com - on November 8, 2017
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