Despite the global economic downturn in 2009, Israel Chemicals Ltd. (ICL) reported its second-best year and its best-ever fourth quarter.
ICL 2009 net income to shareholders was $770.4 million on sales of $4.55 billion, down from 2008’s $2 billion and $6.9 billion, respectively. While sales and income were off from 2008, ICL noted that 2008 was an exceptional “spike” year for the fertilizer and chemical industries. Fourth-quarter net income was $202.7 million on sales of $1.23 billion, up from the year-ago $175.8 million and $1.19 billion.
On March 24, ICL’s board declared a dividend totaling $155 million, which will be paid April 27, 2010, in recognition of its fourth-quarter 2009 results. This brings the total dividends paid in 2009 to $530 million.
ICL’s fertilizer segment, ICL Fertilizers, reported an 82 percent increase in operating income for the fourth quarter ending Dec. 31, 2009, to $219.3 million on sales of $633.2 million, compared to the year-ago $120.4 million and $508.8 million, respectively. The increase reflected the rise in sales and decline in input costs, especially sulfur, countered partially by a decline in some selling prices.
Quarterly sales were up 24 percent. The increase reflects a 94 percent increase in the quantity of potash sold due to rising activities in India and Brazil. In addition, there was a 143 percent increase in the quantities sold of phosphate fertilizers due to steadily rising demand in India, Brazil, and other markets.
For the year, the fertilizer unit had income of $723.1 million on sales of $2.15 billion, down from 2008’s record $2.02 billion and $4.25 billion. Sales were off 49.5 percent, reflecting a sharp decrease in quantities sold of all products – especially potash – and the reduction in average selling prices. The company said the primary markets evidencing a high level of activity in 2009 were Brazil and India. Towards the end of 2009, demand from other markets began to strengthen.
ICL noted that since January 2010, ICL Fertilizers has signed agreements with a number of customers in China for the delivery of 620,000 mt of potash, including an option, during 2010. In addition, in March the company announced that it will supply Indian customers with a total of 1.43 million mt of potash, including options, at $370/mt CFR over a 12-month period beginning in April 2010. This quantity is the largest ever sold by ICL.