31 May 2004 10:20 [Source: ICIS news]
LONDON (CNI)--High average prices and strong demand for potash and fertilisers plus increased internal efficiency helped Israel Chemicals Ltd (ICL) overcome a rise in raw material and shipping costs to deliver on Monday a 21% surge in first quarter operating profits.
The Israeli fertiliser and specialty chemicals company said operating income rose to $61.0m (Euro50m) from $50.6m in the first three months of last year.
Pre-tax profits leapt 38% to $52.5m on sales up 11% at $619.1m. Net earnings were 24% ahead at $32.3m.
The improved fertiliser market was reflected in a 19% rise to $45.7m in operating profits from ICL's fertiliser business. ICL said increased sales and improved efficiency outweighed higher shipping and raw material costs.
Fertiliser sales rose 8% to $334.0m on higher demand and prices plus the positive effects of appreciation of the euro against the dollar. These factors easily outweighed the impact of reduced production of some phosphate products due to industrial disputes.
ICL's industrial products division, which includes some agricultural products, also had a very strong first quarter. Operating profits were up 41% to $8.2m as higher sales offset the effects of a stronger shekel on operating expenses.
Sales rose 8% to $149.5m on the euro's strength against the dollar and higher demand for most of the division's products, with the exception of water treatment biocides.
ICL's performance products business, however, suffered a substantial decline in operating profits despite higher sales. Economic slowdown in Europe, the effect of a stronger euro on dollar-denominated expenses and prices plus higher input costs were blamed for the 19% slump to $7.8m in income from performance products.
Sales, however, rose by 19% to $139.2m on positive currency effects and slightly higher sales of food additives, chemicals for water treatment and paper, and hygiene products for the food industry.
Operating losses from ICL's metallurgy business were cut by 53% to $1.8m as higher sales outweighed the strength of the shekel on costs.
Sales rose 8% to $21.2m on higher prices due to the stronger euro plus improved product mix and geographical distribution.
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