Israel Chemicals (TASE: ICL: NYSE: ICL) today published its results for the first quarter of 2016, with sales declining from $1.403 billion in the first quarter of 2015 to $1.265 billion in the first quarter of this year, a 9.8% drop. Net profit was down 56% to $85 million.
Israel Chemicals attributes its lower sales to a fall in both quantities sold and sale prices, particularly in the fertilizers sector (mainly potash); the selling off of activity that is not part of its core business; and exchange rate changes (principally the weakening of the euro and the British pound against the dollar, in comparison with the corresponding quarter last year). These effects were partially offset by consolidation of the results of a joint venture in China.
The company's operating profit was affected by the fall in quantitative sales and prices in the fertilizers sector, partially offset by higher bromine prices, lower delivery and energy prices, and economizing measures that reduced operating expenses and personnel costs.
With the publication of Israel Chemicals' results, the board of directors approved a $35 million dividend, amounting to $0.03 per share, from the company's first quarter profit, payable on June 22.
Israel Chemicals CEO Stefan Borgas said, "ICL's balanced business model continues to mitigate the impact of the downturn in the commodities fertilizers market. Our Industrial Products business achieved strong results, benefiting from higher bromine prices, strong sales of our next-generation polymeric flame retardants and from efficiency measures previously implemented."
Borgas added, "Company-wide, we have begun to implement an alignment of our corporate organization with our '2020-Next Step Forward' strategy to focus our capabilities based on business needs and to improve our execution capabilities and market orientation. The structural alignment will also create additional efficiency opportunities. In addition, our Board has adjusted the company's dividend policy to strengthen ICL's financial position amid the volatile situation we are facing in the agricultural commodities market. I am confident that these changes will strengthen the company and better enable us to meet macro-environment challenges while creating an optimal platform for growth."
Published by Globes [online], Israel business news - www.globes-online.com - on May 18, 2016
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