TEL AVIV, Israel, August 20 /PRNewswire-FirstCall/ -- Highlights:
Q2 2008 Q2 2007 H1 2008 H1 2007
Sales $2,080M $963M $3,608M $1,846M
Operating income $863M $179M $1,328M $312M
Net income to the $703M $129M $1,050M $220M
Company's shareholders
Gross margin 55.2% 37.2% 52.0% 35.7%
Operating margin 41.5% 18.6% 36.8% 16.9%
Net margin 33.8% 13.4% 29.1% 11.9%
- Record sales: Q2 sales up 116% to $2.1 billion reflecting
180% growth of ICL Fertilizers, 67% growth of ICL Industrial Products
and 50% growth of ICL Performance Products
- Record profitability: highest-ever gross, operating, EBITDA and
net margins driven by rising prices of fertilizers as well as other
products, and volume increases primarily in potash and phosphate rock
- Primary business drivers: positive factors - sharp rise in prices
and strong demand for potash and phosphates; higher sales and
production volumes in all segments but primarily in potash and
phosphate rock; acquisition of Supresta (August 2007) and Henkel water
treatment business (January 2008). Negative factors - significant
increases in costs of raw materials, energy and transportation as well
as some other inputs, and the appreciation of the New Israeli Shekel
(NIS) compared to the US dollar.
- Highest-ever quarterly dividend: the Company has declared a $300
million dividend to be paid on September 23, 2008.
Israel Chemicals Ltd. ("ICL") (TASE:ICL), a multinational fertilizer and
specialty chemicals company, today reported results for the second quarter
and six months ended June 30, 2008.
Revenues for the quarter increased by 116% to a record $2,079.8 million
compared to $963.1 million in the second quarter of 2007. The rise in sales
derived primarily from ICL Fertilizers, which is benefiting from the
continued rise in demand and prices of potash and phosphate fertilizers. In
addition, growth was contributed by ICL Industrial Products, which completed
its Supresta acquisition during the prior 12-month period and improved demand
for some of its products, and ICL Performance Products, which benefited
primarily from higher selling prices. On a geographic basis, sales rose in
all target markets, with particularly strong growth achieved in South
America, Europe and Asia.
Gross profit increased by 220% to $1,147.2 million, with gross margin for
the quarter reaching 55.2% compared to 37.2% in the second quarter of 2007.
The improvement reflected the rising prices of many of the Company's
products, as well as some volume growth and mix improvement. This was
partially offset by significant increases in the costs of raw materials
(primarily sulphur), energy, and some other inputs.
Operating income for the quarter was $862.8 million, an increase of 383%
compared with $178.8 million in the second quarter of 2007, despite higher
bulk shipping rates and the negative effect of the lower shekel dollar
exchange rate on the Company's shekel-based expenses. Operating margin for
the quarter reached a record 41.5% compared to 18.6% in the second quarter of
2007. EBITDA (Earnings Before Income Tax, Depreciation and Amortization) for
the quarter was $904.3 million, an increase of 314% compared with the second
quarter of 2007.
Net income to the Company's shareholders for the quarter increased by
445% to a record $703.2 million compared with $129.1 million in the second
quarter of 2007, reflecting the higher operating income together with a
reduced effective tax rate. This represents a record net margin of 33.8%
compared with 13.4% in the parallel quarter of 2007.
Cash flow generated from operating activities for the quarter reached a
record of $473.5 million, an increase of 167% compared to $177.4 million in
the second quarter of 2007.
The highlights of ICL's core business segments for the first half of 2008
include:
- ICL Fertilizers: sales for the first half of 2008 increased
by 147% to $2,302.7 million, representing 62.4% of the Company's total
revenues (before offsets of inter-segment sales), reflecting
significant year-over-year price increases of most of the segment's
products and a rise in the quantities sold of potash and phosphate
rock. The strong demand for the segment's products is due to rising
worldwide demand for grains combined with historically low levels of
grain inventories. This reflects the combination of a number of
factors: particularly the rising worldwide population, improving
dietary standards in emerging regions, and the
increased use of corn and other grains for the production of bio-fuels.
The segments' operating income increased by 514% to $1,138.8 million,
raising the segment's operating margin to 49.5% from 19.9% in the first half
of 2007. This reflected primarily the sharp rise in selling prices, countered
somewhat by increasing raw material, energy and transportation costs,
together with the appreciation of the shekel compared to the dollar.
- ICL Industrial Products: sales for the first half increased
by 58% to $651.0 million, representing 17.7% of total revenues (before
offsets of inter-segment sales). This reflected the addition of $149.3
million in revenues during the six-month period from Supresta, which
ICL acquired on August 14, 2007, together with an increase in sales of
flame retardants, inorganic brominated products, magnesia and
chlorine-based products. This was countered by a decrease in sales of
agricultural products due to the Montreal Protocol. Operating income
for the first half of 2008 decreased by 15.0% to $74.1 million despite
the increase in sales. This is due primarily to the effect of the
changes in the NIS/U.S. dollar exchange rate, which increased
production costs as expressed in dollar terms, together with increased
costs of energy, transportation, key raw materials and other expenses.
- ICL Performance Products: sales for the first half increased
by 39% to $734.6 million, representing 19.9% of total revenues (before
offsets of inter-segment sales). The increase reflects continued price
rises for the Company's phosphorus-based products, and a somewhat
improved volume and product mix, the consolidation for the first time
of the Henkel water treatment business, which the segment acquired in
the first quarter of 2008, and the strengthening of the Euro against
the dollar, which increased the segment's European sales as expressed
in dollar terms. Operating income increased by 146% to $117.3 million,
reflecting the higher revenue, countered partially by rising energy and
raw material costs.
Dividends:
- ICL's Board of Directors declared on August 19, 2008 that a
dividend totaling $300 million will be paid to its shareholders on
September 23, 2008.
- On June 25, 2008, the Company paid a dividend totaling $173
million.
- On April 30, 2008, the Company paid a dividend totaling $115
million.
About ICL
ICL is one of the world's leading fertilizer and specialty chemicals
companies. ICL produces approximately a third of the world's bromine and
approximately 9% of its potash. 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 benefits from exclusive
concessions to extract minerals from Israel's Dead Sea, a vast source of
high-quality and low-cost 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 UK.
ICL's (Israel Chemicals Ltd.) revenues for 2007 were $4.1 billion with
operating income of $743 million. ICL's shares are traded on the Tel Aviv
Stock Exchange (TASE: ICL).
(financial tables follow)
ICL
PRINCIPAL FINANCIAL RESULTS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2008
3 months ended June 30, 6 months ended June 30,
2008 2007 2008 2006
$ % of $ % of $ % of $ % of
millions sales millions sales millions sales millions sales
Sales 2,079.8 100.0 963.1 100.0 3,607.9 100.0 1,846.0 100.0
Gross profit 1,147.2 55.2 358.1 37.2 1,877.7 52.0 658.8 35.7
Operating 862.8 41.5 178.8 18.6 1,327.8 36.8 312.3 16.9
income
Pre-tax income 835.5 40.2 169.0 17.5 1,249.9 34.6 287.4 15.6
Net income to 703.2 33.8 129.1 13.4 1,049.8 29.1 219.9 11.9
the Company's
shareholders
Operating cash 473.5 177.4 679.2 268.1
flow
EBITDA* 904.3 43.5 218.4 22.7 1,412.2 39.1 401.8 21.8
Investment in 87.4 29.9 154.4 85.9
fixed assets
less grants
* EBITDA is calculated as follows:
3 months ended June 30, 6 months ended June 30,
2008 2007 2008 2007
Net income to the 703.2 129.1 1.049.8 219.9
Company's
shareholders
Amortization & 45.8 35.4 89.9 79.7
depreciation
Financing expenses, 28.9 10.7 84.9 26.9
net
Taxes on income 126.4 43.2 187.6 72.1
Unusual or one-time - - - 3.2
expenses
EBITDA 904.3 218.4 1,412.2 401.8
ICL
PRINCIPAL RESULTS FROM CORE MANAGERIAL SEGMENTS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2008
3 months ended June 30, 6 months ended June 30,
2008 2007 2008 2007
Sales CIF by $ % of $ % of $ % of $ % of
segment millions gross millions gross millions gross millions gross
sales sales sales sales
ICL 1,349.9 63.4 481.4 49.4 2,302.7 62.4 933.5 49.8
Fertilizers
ICL 361.4 17.0 216.0 22.1 651.0 17.7 412.7 22.0
Industrial
Products
ICL 418.2 19.6 278.3 28.5 734.6 19.9 527.4 28.2
Performance
Products
Other and (49.7) (12.9) (80.4) (27.6)
offsets
Total 2,079.8 963.1 3,607.9 1,846.0
Note: Segment sales data and their percentage of total sales are before
offsets of inter-segment sales.
3 months ended June 30, 6 months ended June 30,
2008 2007 2008 2007
Operating $ % of $ % of $ % of $ % of
income milli segment milli segment milli segment milli segment
by segment -ons sales -ons sales -ons sales -on sales
ICL 731.4 54.2 114.2 23.7 1,138.8 49.5 185.5 19.9
Fertilizers
ICL 45.4 12.6 42.7 19.8 74.1 11.4 87.2 21.1
Industrial
Products
ICL 81.5 19.5 27.8 10.0 117.3 16.0 47.6 9.0
Performance
Products
Other and 4.5 (5.9) (2.4) (8.0)
offsets
Total 862.8 178.8 1,327.8 312.3
Press Contact:
Fleisher Communications and Public Relations
Amiram Fleisher
+972-3-6241241
amiram@fleisher-pr.com
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