Best Quarter in ICL's History - Sales, Profits and Margins at Record
Levels -
TEL-AVIV, Israel, November 17 /PRNewswire-FirstCall/ -- Highlights
- Best quarter in ICL's history (excluding one-time tax effect)
- Net income more than doubled for the quarter
- Record gross profit and operating income: for the quarter, gross
profit and operating profit rose by 32% and 94%, respectively
- Continued strong cash flow: $266 million cash from operations
since beginning of 2004
Israel Chemicals Ltd. ("ICL" or the "ICL Group") (TASE: CHIM), a
multinational fertilizer and specialty chemicals company, today reported
revenues for the third quarter and first nine months ended September 30, 2004.
For the three month period, sales increased by 15.5% to $677.9 million
from $586.9 million in the third quarter of 2003. Operating income for the
quarter was $102.1 million, an increase of 93.5% compared to $52.8 million in
the third quarter of 2003. Net income for the quarter more than doubled,
rising 113% to $61.8 million from $29.0 million in the third quarter of 2003.
For the first nine months of 2004, sales increased by 15% to $1,968.5
million from $1,707.3 million in the first nine months of 2003. Operating
income for the period was $253.4 million, an increase of 43% compared to
$177.0 million in the first nine months of 2003. Net income for the period
rose by 89% to $168.7 million from $89.3 million in the first nine months of
2003.
These record results reflect:
- Higher average prices for most goods, especially potash, phosphate
fertilizers, bromine and some bromine compounds, magnesium metal, food and
technical grade phosphoric acid and some products from the ICL Performance
Products segment due to tighter market conditions
- Growth in sales volume of some of the Company's products, particularly
in the ICL Industrial Products segment
- Improvement in profits of all business segments, including a first-ever
breakeven for ICL Metallurgy
- Continued progress according to strategic work plan: increasing
efficiency, intensified focus on core businesses, increasing diversification
of sources of capital
- Additional factors: rising costs of sulfur (a key raw material for
manufacturing phosphoric acid and phosphate fertilizers), Bisophenol A (a key
raw material used in the production of flame retardants) and some other raw
materials; increasing energy prices and shipping rates. In addition, the
Group's results were affected by a strike of Israel's port workers during the
third quarter.
- Effect of fluctuations in exchange rates:
- During the third quarter, the depreciation of the New Israeli Shekel
(NIS) in dollar terms reduced the Group's expenses as expressed in dollar
terms. Conversely, the appreciation of the NIS in dollar terms during the
first nine months of 2004 increased the Company's expenses as expressed in
dollar terms.
- During both the third quarter and the nine months, the appreciation of
the Euro in dollar terms increased the Group's operating income as reported
in dollar terms.
The Company's results for the nine months include one-time income of
approximately $18 million recorded in the second quarter attributable to the
new tax law approved by Israel's parliament. Excluding the one-time income,
net income for the nine month period was approximately $150.7 million, an
increase of approximately 69% compared to the first nine months of 2003.
During the first nine months, the ICL Group recorded operating cash flow
of $266 million. Outstanding debt was reduced by $77 million during the
period.
On September 19th, 2004 the Group paid a dividend totalling approximately
$63.9 million.
The highlights of ICL Group's core business segments for the first nine
months of 2004 include:
- ICL Fertilizers: sales increased 14% to $1,070.2 million, representing
50.4% of total revenues (before offsets of inter-segment sales). This is due
primarily to higher demand throughout the world and the resulting higher
prices, together with appreciation of world currencies in dollar terms.
Operating income increased by 31% to $175.4 million due to the higher sales,
offset somewhat by higher shipping and raw material costs.
- ICL Industrial Products: sales increased 18% to $495.8 million,
representing 23.4% of total revenues (before offsets of inter-segment sales).
This is due to a rise in demand, which led to higher prices and increases in
quantities sold, as well as the appreciation of major currencies against the
dollar. Operating income more than doubled, increasing by 104% to $39.0
million due to the higher sales and increasing efficiency, offset somewhat by
higher raw material and energy costs.
- ICL Performance Products: sales increased 14% to $429.4 million,
representing 20.2% of total revenues (before offsets of inter-segment sales).
This reflects rising sales of some of the segment's products, especially food
additives, chemicals for water treatment and paper, and phosphoric acid. This
was offset somewhat by rising raw material and energy costs. Operating income
increased by 39% to $38.2 million due to the higher sales, offset somewhat by
the increased selling, general and administrative expenses that accompanied
the rising sales.
- ICL Metallurgy: sales increased by 16% to $65.1 million, representing
3.1% of total revenues (before offsets of inter-segment sales). This reflects
higher worldwide selling prices for the magnesium products, together with the
strength of the Euro in relation to the dollar. The segment's operating loss
declined by 64% to $3.4 million for the nine month period, reflecting near-
breakeven results for the third quarter (a loss of $0.2 million). The higher
prices were somewhat offset by higher energy and raw materials costs. About
the ICL Group
ICL is a multinational company with leading positions in potash and
bromine. In 2003, approximately 93% of ICL's sales were outside of Israel and
approximately 45% of ICL's total sales were of products that ICL manufactured
outside of Israel.
ICL has direct access to low-cost, high-quality materials through an
exclusive concession from the State of Israel to extract minerals from the
Israeli side of the Dead Sea. ICL extracts from the Dead Sea potash, bromine,
magnesium chloride and sodium chloride. ICL also mines phosphate rock from
Israel's Negev Desert and potash and salt from its mines in Spain and the
United Kingdom.
ICL's principal manufacturing and production facilities are located in
Israel, Germany, The Netherlands, Spain, the United Kingdom, the United
States and France. ICL has additional manufacturing and production facilities
in Austria, Belgium, Turkey, China, Brazil, Argentina and Australia. ICL also
has marketing offices and distribution and logistics facilities worldwide.
ICL enjoys transportation and logistical advantages due to the proximity of
its production facilities to seaports in both Israel and Europe.
ICL is a public company in Israel whose shares are listed on the Tel Aviv
Stock Exchange (TASE: CHIM). Israel Corporation Ltd., a company listed on the
Tel Aviv Stock Exchange and controlled by the Ofer Group, currently holds
approximately 51.4% of ICL's outstanding shares. ICL's remaining outstanding
shares are held by Potash Corporation of Saskatchewan (NYSE: POT), who holds
approximately 8.8% of ICL's outstanding shares, by various institutional
investors and by the general public.
ICL Group Ltd.
Principal Financial Results
Three Months and Nine Months Ended September 30, 2004
All Figures in US$ Millions (m)
3 months ended September 9 months ended September
30, 30,
2004 2003 2004 2003
$ (m) %of $ (m) %of $ (m) %of $ (m) %of
sales sales sales sales
Net Sales 677.9 100.0 586.9 100.0 1,968.5 100.0 1,707.3 100.0
Gross profit 240.1 35.4 182.5 31.1 672. 3 34.1 553.5 32.4
Operating 102.1 15.1 52.8 9.0 253.4 12.9 177.0 10.4
income
Income before
taxes 93.9 13.9 42.1 7.2 227.3 11.5 137.6 8.1
Net
income(loss) 61.8 9.1 29.0 4.9 168.7 8.6 89.3 5.2
Net cash
provided by
operating
activities 59.3 86.1 266.2 375.7
Investment in
property, plant
and equipment
less grants
received 32.6 22.8 80.7 90.8
ICL Group Ltd.
Principal Results From Core Business Segments
Three Months and Nine Months Ended September 30, 2004
All Figures in US$ Millions (m)
3 months ended September 30 9 months ended September 30
2004 2003 2004 2003
Sales CIF by $ (m) %of $ (m) %of $ (m) %of $ (m) %of
segment gross gross gross gross
sales sales sales sales
ICL Fertilizers 373.2 50.8 334.6 52.6 1,070.2 50.4 941.1 51.1
ICL Industrial
Products* 173.1 23.6 141.8 22.3 495.8 23.4 418.8 22.7
ICL Performance
Products 145.6 19.8 125.9 19.8 429.4 20.2 377.2 20.5
ICL Metallurgy 21.5 2.9 16.7 2.6 65.1 3.1 56.2 3.0
Other and
offsets (35.5) (32.1) (92.0) (86.0)
Total 677.9 586.9 1,968.5 1,707.3
* Including agricultural products
Note: Segment sales data and their percentage of total sales are before
offsets of inter-segment sales.
All Figures in US$ Millions (m)
3 months ended September 30 9 months ended September 30
2004 2003 2004 2003
Operating $ (m) %of $ (m) %of $ (m) %of $ (m) %of
income by segment segment segment segment
segment sales sales sales sales
ICL
Fertilizers 71.0 19.0 38.6 11.5 175.4 16.4 133.9 14.2
ICL Industrial
Products* 16.4 9.5 6.3 4.4 39.0 7.9 19.1 4.6
ICL Performance
Products 13.4 9.2 8.2 6.5 38.2 8.9 27.4 7.3
ICL Metallurgy (0.2) (0.1) (3.0) (17.9) (3.4) (5.3) (9.4) (16.7)
Other and 1.5 2.7 4.2 6.0
offsets
Total 102.1 52.8 253.4 177.0
* Including agricultural products
Press Contact
Fleisher Communications and Public Relations
Amiram Fleisher
+972-3-624-1241
amiram@fleisher-pr.com
SOURCE ICL - Israel Chemicals Ltd.
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CONTACT:
Press Contact: Fleisher Communications and
Public Relations, Amiram Fleisher, +972-3-624-1241,
amiram@fleisher-pr.com
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