Israel Chemicals Ltd.’s ICL Fertilizers saw a huge drop in operating income and sales during the first quarter ending March 31, 2009. Operating income was $138.8 million on sales of $371.1 million, compared to the year-ago $407.4 million and $952.9 million.
ICL cited a sharp decline in quantities sold as well as lower phosphate prices, which were somewhat offset by higher potash prices, decreases in shipping and energy costs, and the depreciation of the shekel in terms of the dollar. Efficiency measures also helped reduce the impact of lower sales.
Toward the end of the first quarter, ICL said global demand for fertilizers increased somewhat, reflecting a renewal of activity in Brazil and some other markets. It said fertilizer inventories were reduced in the country and demand was picking up due to higher soy prices and the devaluation of the local currency. ICL added that said potash demand in Southeast Asia, particularly in Indonesia and Malaysia, was up due to higher palm oil prices.
Going forward, despite the current global economic crisis and continued relative weakness of the short-term market demand, the company said long-term fertilizer fundamentals remain positive. ICL says it has intensified its cost savings and efficiency programs, and that it is taking advantage of its virtually-unlimited outdoor storage capacity at the Dead Sea to stockpile potash for future sales. It also continues to manufacture at normal levels.
Company-wide, Israel Chemicals had first-quarter net income available to shareholders of $158.8 million on sales of $898.5 million, versus the year-ago $346.7 million and $1.53 billion, respectively. Operating income was $205.6 million, down from the year-ago $465 million. EBITDA was $259.3 million, down from $507.9 million. As with ICL Fertilizer, volumes were off at the company’s other segments ?Çô ICL Industrial Products and ICL Performance Products.
On May 4, the company paid a dividend totaling $175 million in respect of its 2008 results. The company on May 20 declared that a dividend of $100 million will be paid on June 17, 2009, with respect to the first quarter results.