Israel Chemicals Ltd. (TASE: ICL) reported today first quarter net profit of $159 million, 54% lower than the corresponding quarter. The figure is higher than most analyst estimates, which were between $135-142 million.
Revenue was $898.5 million, 41% less than the corresponding quarter of 2008.
Israel chemicals results were influenced by a global slowdown, especially in the fertilizer market, where sales quantities fell. Toward the end of the first quarter, there was a pickup in activity in Brazil and other markets.
ICL announced a dividend payment of a total of $100 million, payable on June 17.
Citi Investment Research analysts were disappointed that ICL's fertilizers division reported far worse profits than Citi had expected, falling 66% to $139 million earnings before interest and taxes, compared with Citi's $171 million estimate. Potash sales volumes, which dropped 77%, fell far more than expected .
Offsetting the weak fertilizer result, ICL's performance products division held up better than expected, benefiting from margin expansion as raw material costs fell faster than selling prices.
The dividend represents a payout ratio of 63%. Citi says, "The generous dividend policy remains a key attraction of the shares. "
Citi reiterated its "Hold" rating, saying that the shares are fully valued at the current share price, though the generous dividend policy remains supportive.
Shares in ICL rose 3.2% by late morning. The company's share price is up 62% so far this year.
Published by Globes [online], Israel business news - www.globes-online.com - on May 20, 2009
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