Israel Chemicals Ltd. (TASE: ICL) today reported lower revenue and profits in its preliminary results for 2013, despite fourth quarter revenue growth. The company will nevertheless distribute a $500 million dividend on March 26.
Full-year revenue fell to $6.27 billion from $6.47 billion in 2012, mainly due to lower selling prices. Net profit fell 37% to $819 million in 2013 from $1.3 billion in 2012, and adjusted net profit fell 24% to $1.01 billion from $1.34 billion. Israel Chemicals attributed the drop to $60 million expense related to the early retirement plan at its phosphates unit Rotem Amfert Negev, a one-time expense of $118 million for the release of $1.07 billion in trapped profits, and a higher companies tax rate.
Although Israel Chemicals' potash sales rose to 5.04 million tons in 2013 from 4.63 million tons in 2012, lower prices resulted in a 4% drop in revenue to $3.66 billion from $3.81 billion. Increased phosphates deliveries offset lower prices, resulting in a slight increase in revenue to $1.75 billion in 2013 from $1.73 billion in 2012.
Fourth quarter revenue rose 9% to $1.42 billion from $1.3 billion for the corresponding quarter of 2012, due to higher potash sales to China and India, and revenue from recent acquisitions. However, net profit fell 43% to $119 million for the fourth quarter from $208 million for the corresponding quarter, and adjusted net profit fell 21% to$195 million from $247 million.
Cash flow from operations fell 35% to $1.13 billion in 2013 from $1.73 billion in 2012.
Looking ahead, Israel Chemicals said, "Several potash manufacturers have signed contracts with China purchasers during the first half of 2014 at a price of $305 per ton, $95 less than supply contracts for the first half of 2013. ICL Fertilizers agreed with its customers for the first half of 2014 to sale quantities roughly the same as the quantities agreed for the corresponding period last year, on commercial terms similar to those agreed to in the supply contracts with other Chinese potash importers."
Israel Chemicals says that it plans to expand its potash capacity, secure phosphate reserves, broaden its portfolio of next-generation bromine-based products, and widen its leadership in functional foods. The strategy also calls for developing the company’s R&D and innovation capabilities and improving its position in the agriculture, food and engineered materials markets. The company is also moving ahead to dual list on the New York Stock Exchange.
Published by Globes [online], Israel business news - www.globes-online.com - on February 12, 2014
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