Israel Chemicals Q4 op pft trebles to $101m on demand, prices

29 March 2005 12:14  [Source: ICIS news]

LONDON (CNI)--Fertiliser and specialty chemicals company Israel Chemicals Ltd(ICL) announced Tuesday that its fourth quarter (Q4) 2004 operating profit more than trebled to $100.9m (Euro77.8m) compared with $29.2m in Q4 2003 on higher demand and product prices.

 

Sales in the quarter increased by 32% to $746.5m from $563.6m in Q4 2003. Net income in Q4 2004 was $81.8m compared with $13.8m in the same period in 2003.

 

For the full year, operating profit rose 75% to $354.4m on sales increased 20% at $2.72bn. Net income for the year was $250.5m, compared with $103.1m in 2003.

 

ICL said the result reflected a strong market environment for many of its products, leading to higher average prices. Sales of bromine-based products rose significantly and there were record sales of phosphate fertilisers.

 

The company said that it had continued to benefit from the implementation of its strategic work plan, which had led to increased efficiency, a focus on core businesses, reduced gearing and increasing diversification of financial sources.

 

As part of its strategy to diversify its financial platform, earlier in 2005 the group completed a $125m private placement of bonds with a group of international institutional investors. This extended its average term-to-maturity of its outstanding debt, enabling it to capitalise on business opportunities.

 

A number of businesses were divested during the year as part of the focus on core businesses. These included the sale of Negev Industrial Mineral for $19.4m with a capital gain of $4.4m and the disposal of ICL's holding in Socieded Quimica y Minera de Chile for $100m with a capital gain of $43.6m.

 

Currency fluctuations also had a positive effect on sales and profit reported in dollars, the company said.

 

However, during the year the company faced rising costs for sulphur, bisphenol A and other raw materials along with increased energy prices.

 

In Q4 2004 ICL’s fertilisers division recorded operating profit of $68.0m compared with $21.6m in Q4 2003. The division’s sales in the quarter were $385.7m, up 32% on Q4 2003.

 

During the quarter ICL began to use a less expensive source of phosphate rock in the production of phosphoric acid-derived downstream products and closed its Zin calcined phosphate plant. The company said this will reduce costs and improve the division's profitability.

 

Full year operating profit in the fertiliser division was up 57% at $243.5m due to higher sales, operational improvements and an increase in potash capacity. Sales were up 18% at $1.46bn, representing almost 50% of total group revenue before offsets of intersegment sales.

 

The industrial products division returned operating profits of $24m in Q4 2004, compared with $700,000 in Q4 2003. Sales in the quarter increased 48% to $210.7m. Full year operating profit in the division more than trebled to $63m on higher sales volumes and prices and improved efficiency. Sales in the division increased 26% to $706.5m.

 

The performance products division reported operating profits increased 8% to $8.9m for Q4 2004 on sales up 13% at $153.1m. Full year operating profit increased 32% to $47m on sales up 13% at $582.5m.

 

ICL’s metallurgy division returned an operating profit of $200,000 in Q4 2004 compared with a loss of $2.5m in the same period in 2003. Sales in the quarter increased 30% compared with Q4 2003 to $23.1m. Over the year the division recorded a loss of $3.3m compared with a loss of $11.9m in 2003. Sales increased 19% to $88.2m.

By: Mark Whitfield
+44 20 8652 3214

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