Israel Chemicals Ltd. (TASE: ICL) today reported lower revenue and profits for the fourth quarter and full year of 2012, due to lower potash sales to China and India. The company expects improved potash sales in 2013, although this will be partly offset by lower sales for industrial and performance products.
Fourth quarter revenue fell to $1.34 billion from $1.71 billion for the corresponding quarter of 2011, due to reduced shipments of potash to India and China, and lower average prices. Net profit fell to $209.5 million for the fourth quarter from $369.6 million for the corresponding quarter.
Full-year revenue fell to $6.67 billion from $7.07 billion in 2011, and net profit fell to $1.3 billion from $1.51 billion.
Cash flow from operations rose 25% to $1.59 billion in 2012 from $1.27 billion in 2011. The company will distribute a $147 million dividend on its fourth quarter profits.
In its outlook, Israel Chemicals says, "The high price of agricultural products, together with the past year’s decline in fertilizer prices, has given farmers a strong incentive to increase fertilizer application. The world economic environment is expected to continue impacting the sales of ICL Industrial Products and ICL Performance Products."
Fourth quarter fertilizer sales fell 31% to $709.7 million and full-year sales fell 7% to $3.8 billion (57% of total revenue), due to lower sales to customers in China and India. The company added that, in the first quarter of 2013, it signed contracts to supply 660,000 tons of potash to Chinese customers and contracts for 820,000 tons of potash to Indian customers. The company also signed a three-year framework agreement with Chinese customers for the sale of 3.3 million tons of potash.
After a 5% drop in sales of industrial products to $1.44 billion in 2012, Israel Chemicals expects a turnaround in 2013, thanks to its new bromine-based polymeric flame retardant and a new mercury emission reduction product, which is being adopted by US power plants. The company adds that sales of drilling fluids for gas and oil exploration in the Gulf of Mexico have resumed pre-freeze levels, and deep-water drilling worldwide is increasing.
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013