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ICL Reports Financial Results for the Third Quarter of 2012



         ICL Reports Financial Results for the Third Quarter of 2012

PR Newswire

TEL AVIV, Israel, November 21, 2012

TEL AVIV, Israel, November 21, 2012 /PRNewswire/ --

  o ICL's Leading Market Positions & Balanced Portfolio Continue to
    Counterbalance External Headwinds
  o Q3'12 Revenues Down $9M Compared with Q3'11 Before Exchange Rate
    Fluctuations, Which Accounted for $72M
  o In Contrast to Low Demand in World Potash Markets, ICL Fertilizers' Q3
    Potash Shipments Were Similar to Their Level in Q3'11
  o Weak Global Economic Environment Impacting ICL-IP & ICL-PP Less Than In
    Previous Cycles

ICL (TASE:ICL), a multinational fertilizer and specialty chemicals company,
today reported its financial results for the third quarter ended September 30,
2012.

Mr. Stefan Borgas, ICL's CEO since September 20, 2012, commented: "Despite the
challenging global economic environment, ICL continues to demonstrate
resilience due to its numerous leading market positions and a balanced
portfolio that counterbalances low economic growth. The products that we
manufacture for the agriculture, food, water and materials markets are an
answer to the essential, fundamental requirements of the world's growing
population. ICL develops products and processes that will enable it to grow
and strengthen the contribution that it makes to consumers in these critical
areas."

Financial Results

Revenues: ICL's revenues for the third quarter of 2012 totaled $1,817.5
million, an $81 million decline compared with $1,898.3 million in the third
quarter of 2011. The decrease was due primarily to the impact of unfavorable
exchange rate fluctuations, which accounted for approximately $72 million of
the difference. The Company's revenues during the quarter were enhanced by the
consolidation of companies acquired during the past 12 months.

For the nine-month period, sales totaled $5,334.2 million compared with
$5,355.5 million in the first nine months of 2011, a decline of approximately
$21 million. Excluding the impact of unfavorable exchange rate fluctuations
(primarily the Euro/dollar exchange rate), which reduced revenues by
approximately $155 million, the Company's sales for the quarter would have
risen by $134 million for the nine-month period. This reflected the rise of
prices, on average, and the stable quantities sold, coupled with the
contribution of newly-consolidated companies acquired during the past 12
months.

Gross profit: Gross profit for the third quarter totaled $786.0 million
compared with $871.4 million in the third quarter of 2011. The decline
reflected the period's lower sales, coupled with the impact of increased raw
material, energy and other costs. Gross margin for the period was 43.2%
compared with 45.9% for the third quarter of 2011.

For the nine-month period, gross profit totaled $2,250.1 million, a 5% decline
compared with $2,380.2 million in the first nine months of 2011. Gross margin
for the period was 42.2% compared with 44.4% for the first nine months of
2011.

Operating income: Operating income for the third quarter of 2012 was $487.9
million compared with $556.2 million for the third quarter of 2011. For the
nine-month period, operating income totaled $1,382.5 million, a 5% decline
compared with $1,459.5 million in the first nine months of 2011. The decrease
derived from the reduction in the gross margin, countered partially by reduced
sales, marketing and administrative expenses.

Net income: Net income to shareholders for the third quarter of 2012 totaled
$394.8 million compared with $436.3 million in the parallel period of 2011.
For the nine-month period, net income to shareholders totaled $1,091.0 million
compared with $1,142.2 million in the first nine months of 2011.

Cash flow: During the third quarter of 2012, operating cash flow totaled
$680.1 million, a 36% increase compared with $498.8 million in the third
quarter of 2011. For the nine-month period, cash flow totaled $1,317.7
million, an increase of 42% compared with $925.0 million for the first nine
months of 2011.

Outlook:

  o The continued decline of global grain stock-to-use ratios to historically
    low levels, as predicted by the U.S. Department of Agriculture, and other
    indicators point to a market environment that will support strong sales of
    fertilizers in the 2013 planting season.
  o The completion of potash deliveries under the framework of existing
    contracts signed with customers in India and China, coupled with the delay
    of new contract renewals with these customers, is expected to reduce
    potash shipments during the fourth quarter as compared with the fourth
    quarter of 2011.
  o ICL continues manufacturing potash at its normal rate, benefiting from its
    strategic ability to store very large quantities of potash outdoors.
  o Due to the decrease in demand for flame retardants during the third
    quarter, production was halted at one of ICL Industrial Products'
    production units. This shutdown is expected to continue into the fourth
    quarter.
  o Due to the seasonality of ICL Performance Products' sales of some of its
    products, especially its fire safety products, and the general
    holiday-related slowdown of sales in December, the fourth quarter is
    generally characterized by lower profit margins.

Highlights of Core Business Segments

 

  * ICL Fertilizers: The segment's sales for the third quarter of 2012 totaled
    $1.1 billion, representing 55.7% of total revenues (before offsets of
    inter-segment sales), a decline of approximately 5% compared with Q3 2011.
    This moderate decline during a period of low overall potash demand
    reflected primarily the impact of unfavorable exchange rate fluctuations,
    as explained above, and the segment's strong potash sales to Indian and
    Brazilian customers during the quarter, which compensated for weak sales
    to customers in China and other markets. During the third quarter and also
    in October 2012, the Company's potash deliveries to India that had been
    called for under the framework of supply agreements signed during the
    second half of 2011 (but that had been delayed beyond the original
    agreed-upon dates) were completed.

Despite declining world sales of potash during the quarter, the segment sold
1,390 thousand tons of potash (including internal sales) during the third
quarter of 2012, a quantity that was almost unchanged from that sold during
the third quarter of 2011. However, the completion of existing contracts
coupled with delayed renewals of contracts in India and China is expected to
reduce the Company's Q4 2012 potash shipments as compared with Q4 2011. The
quantity of phosphate fertilizers sold during Q3 2012 totaled 458 thousand
tons compared with 456 tons in Q3 2011.

For the nine-month period, sales totaled $3.1 billion, representing 55.1% of
total revenues (before offsets of inter-segment sales), a 1% increase compared
with the first nine months of 2011. The increase derived from a rise in the
segment's prices, on average, during the year, together with the
consolidation, for the first time, of companies acquired during the past 12
months. This was countered partially by unfavorable fluctuations of key
exchange rates, as explained above, and reduced quantities sold during the
period. During the period, the Company sold 3,821 thousand tons of potash
(including internal sales) and 1,298 thousand tons of phosphate fertilizers.

ICL Fertilizers' operating income for the third quarter of 2012 totaled $367
million, representing an operating margin of 34%. For the nine-month period,
operating income totaled $1,019 million, representing an operating margin of
33%.

Fertilizer market trends: World potash markets during Q3 2012 exhibited low
demand as compared with Q3 2011. This decline derived primarily from delays in
the renewal of potash supply agreements with China and India, Europe's ongoing
financial crisis and droughts in North America. In contrast, Brazil exhibited
strong demand for potash, with the total quantities imported during the first
nine months of 2012 nearly reaching the record levels recorded in 2011.

In India, demand for phosphate fertilizers has begun to decline due to reduced
government subsidies, which result in increased fertilizer prices to the
end-user, together with the devaluation of the Indian rupee as compared with
the U.S. dollar, and the delay of the monsoon season. During the last several
weeks, the rainy season has begun, resulting in an increase in fertilizer
demand and a stabilization of the market.

In October 2012, the US Department of Agriculture published its 2012/13
Agricultural Outlook, and once again reduced its forecast regarding the
quantity of crops expected to be harvested due to the year's hot and dry
weather, the severe draught in U.S. growing regions and dryer-than-normal
weather in Russia, the Ukraine and Kazhakstan. These developments have led to
continued rises in the prices of corn, wheat and soy and a further decline in
grain stock-to-use ratios, developments that are expected to improve demand
for fertilizer in the next agricultural season. According to the report, the
global grain stock-to-use ratio is forecast to decline to 18.5% at the end of
the 2012/2013 agricultural season, compared with 20.48% at the end of the
2011/12 season and 20.7% at the end of the 2010/11 season.

  * ICL Industrial Products: The segment's sales for the third quarter of 2012
    totaled $347 million, representing 18.1% of total revenues (before offsets
    of inter-segment sales), compared with $381 million for the third quarter
    of 2011. The decline reflected lower quantities sold coupled with
    unfavorable fluctuations in exchange rates, countered partially by
    increased selling prices.  For the nine-month period, sales totaled $1,110
    million, a 6% decrease compared with the first nine months of 2011.

The segment's operating income for the third quarter of 2012 totaled $59
million compared with $76 million for the third quarter of 2011. The decrease
in operating income derived from the reduced quantities sold, coupled with
higher raw material and energy costs and unfavorable exchange rate
fluctuations. For the first nine months of 2012, operating income totaled $204
million compared with $234 million in the parallel period of 2011.

Market developments: During the past year, the economic slowdown throughout
the world and especially in China has led to reduced demand for the brominated
flame retardants that are used in electronics and products for the building
industry. In parallel, China's demand for elemental bromine has declined,
leading to reduced selling prices there.

In contrast, demand for drilling fluids has been rising throughout 2012 due to
an increase in the deep-water gas and oil exploration activities in the Gulf
of Mexico.

  * ICL Performance Products: The segment's sales for the third quarter of
    2012 totaled $416 million, representing 21.7% of total revenues (before
    offsets of inter-segment sales), a 3% increase compared with $403 million
    for the third quarter of 2011. The increase reflects higher quantities
    sold, coupled with the consolidation, for the first time, of companies
    that were acquired during the past 12 months. The increase was countered
    partially by the negative impact of exchange rate fluctuations, especially
    the Euro vs. the U.S. dollar. For the nine-month period, sales totaled
    $1,137 million, a 2% decrease compared with the first nine months of 2011.

The segment's operating income for the quarter totaled $60 million, a 13%
increase compared with $53 million in the third quarter of 2011. The increase
derived from the increased sales, countered partially by the increased costs
of raw materials and energy. For the first nine months of 2012, operating
income totaled $148 million compared with $166 million in the parallel period
of 2011.

Market developments: During the third quarter, the trends that characterized
the global market throughout the year, including the lack of certainty
regarding global economic stability, political instability in the Middle East,
the slow recovery of markets in the U.S., continued to affect markets for the
majority of products that use the segment's offerings. In addition, the
slowdown of fertilizer markets, whose by-products are raw materials for the
segment's products, increased the price of the segment's inputs, primarily in
Europe. However, prices of these components in the U.S. remained stable.

Dividends:

  o On April 30, 2012, the Company paid a dividend totaling $260 million in
    respect of its fourth quarter 2011 results. This brought the total
    dividend paid in respect of 2011 results to $1,053 million.
  o On June 26, 2012, the Company paid a dividend totaling $200 million in
    respect of its first quarter 2011 results.
  o On September 12, 2012, the Company paid a dividend totaling $285 million
    in respect of its second quarter 2012 results.
  o The Company's Board of Directors today declared that a dividend totaling
    $276 million will be paid on December 19, 2012 in respect of its third
    quarter 2012 results.

About ICL

ICL is one of the world's leading fertilizer and specialty chemicals
companies. For a world challenged by population growth and scarce resources,
ICL makes products that increase global food and water supplies and improve
industrial materials and processes.

ICL produces approximately a third of the world's bromine and is the 6^th
largest potash producer in the world. ICL is a leading supplier of fertilizers
in Europe and a major player in specialty fertilizer market segments. One of
the world's most integrated manufacturers and suppliers of phosphate products,
ICL has become the world's leading provider of pure phosphoric acid and a
major specialty phosphate player.

ICL is comprised of three core segments: ICL Fertilizers, ICL Industrial
Products and ICL Performance Products. Its major production activities are
located in Israel, Europe, the US, South America and China, and are supported
by major global marketing and logistics networks. ICL extracts potash,
bromine, magnesium chloride and sodium chloride from Israel's Dead Sea, mines
phosphate rock from Israel's Negev Desert, and mines potash and salt in Spain
and the UK.

ICL's shares are traded on the Tel Aviv Stock Exchange (TASE: ICL).

Forward Looking Statement

This press release contains forward-looking assessments and judgments
regarding macro-economic conditions and the Group's markets, and there is no
certainty as to whether, when and/or at what rate these projections will
materialize. Management's projections are likely to change in light of market
fluctuations, especially in ICL's manufacturing locations and target markets.
 In addition, ICL is likely to be affected by changes in the demand and price
environment for its products as well as the cost of shipping and energy,
whether caused by actions of governments, manufacturers or consumers. ICL can
also be affected by changes in the capital markets, including fluctuations in
currency exchange rates, credit availability, interest rates, etc.  

ICL

    PRINCIPAL FINANCIAL RESULTS

    THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2012

                      3 months ended September          9 months ended September
                                 30,                              30,
                         2012            2011             2012             2011
                      $      % of      $      % of      $      % of      $      % of
                   millions  sales  millions  sales  millions  sales  millions  sales
    Net Sales       1,817.5  100.0   1,898.3  100.0   5,334.2  100.0   5,355.5  100.0
    Gross profit      786.0   43.2     871.4   45.9   2,250.1   42.2   2,380.2   44.4
    Operating
    income            487.9   26.8     556.2   29.3   1,382.5   25.9   1,459.5   27.3
    Pre-tax income    477.1   26.3     542.6   28.6   1,330.2   24.9   1,410.2   26.3
    Net income to
    the
    Company's
    shareholders      394.8   21.7     436.3   23.0   1,091.0   20.5   1,142.2   21.3
    EBITDA*           561.7   30.9     631.8   33.3   1,595.5   29.9   1,661.6   31.0
    Operating cash
    flow              680.1            498.8          1,317.7            925.0
    Investment in
    property,
    plant and
    equipment less
    grants
    received          192.2            156.4            522.0            360.8

* EBITDA is calculated as follows:

                          3 months ended Sept. 30,   9 months ended Sept. 30,
                              2012         2011         2012         2011
    Net income                394.8        436.3       1,091.0     1,142.2
    Amortization &
    depreciation               72.4         75.1         210.3       197.7
    Financing
    expenses, net              13.4         16.3          59.4        60.5
    Taxes on income            81.0        104.1         234.8       261.2
    Unusual or
    one-time expenses
    EBITDA                    561.7        631.7       1,595.5     1,661.6

    ICL

    PRINCIPAL RESULTS FROM CORE
    MANAGERIAL SEGMENTS

    THREE MONTHS AND NINE MONTHS ENDED
    SEPTEMBER 30, 2012

                    3 months ended September       9 months ended September
                              30,                            30,
                      2012            2011           2012            2011
                             % of             % of              % of             % of
    Sales CIF by      $      gross      $     gross      $      gross      $     gross
    segment       millions   sales  millions  sales  millions   sales  millions  sales
    ICL
    Fertilizers    1,066.3    55.7   1,126.0   56.1   3,102.4    55.1   3,063.5   54.3
    ICL
    Industrial
    Products         346.6    18.1     380.7   19.0   1,110.2    19.7   1,178.0   20.9
    ICL
    Performance
    Products         415.7    21.7     403.1   20.1   1,137.3    20.2   1,161.5   20.6
    Other and
    offsets         (11.1)            (11.5)           (15.7)            (47.5)
    Total          1,817.5           1,898.3          5,334.2           5,355.5

Note: Segment sales data and their percentage of total sales are before
offsets of inter-segment sales.

                  3 months ended September 30,      9 months ended September 30,
                      2012             2011             2012             2011
    Operating              % of               % of               % of              % of
    income by      $      segment     $      segment     $      segment     $      segment
    segment     millions   sales   millions   sales   millions   sales   millions   sales
    ICL
    Fertilizers   366.9     37.0     416.3     37.0    1,018.9    33.9    1,038.8    33.9
    ICL
    Industrial
    Products       58.6     19.9      75.9     19.9      203.6    19.9      234.2    19.9
    ICL
    Performance
    Products       59.9     13.1      52.9     13.1      147.9    14.3      166.0    14.3
    Other and
    offsets         2.5               11.1                12.1               20.5
    Total         487.9              556.2             1,382.5            1,459.5

Fleisher Communications and Public Relations    
Amiram Fleisher
+972-3-6241241   
amiram@fleisher-pr.com

<end_table>

SOURCE ICL - Israel Chemicals Ltd
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