ICL Fertilizers, the fertilizer unit of Israel Chemicals Ltd. (ICL), reported operating income of $232 million for the first quarter ending March 31, 2010, up 67 percent from the year-ago $138.8 million. ICL said this reflected an increase in quantities sold, countered by a decline in some selling prices, together with the strengthening of the shekel compared with the dollar.
Fertilizer sales were up 106 percent, to $766 million, compared to the year-ago $371.1 million. During the quarter, ICL sold 1.33 million mt of potash, an increase of more than 300 percent from the year-ago quarter. During January 2010, ICL signed contracts with several customers in China for a total of 620,000 mt of potash, including an option, in 2010. In addition, in March 2010, it signed contracts with Indian customers for a record total of 1.43 million mt of potash, including options, for the year beginning April 2010.
Company-wide, ICL said it was the company’s second-best-ever first quarter, bested only by the first quarter of 2008, which was a “spike” year for the industry. Net income was up 52 percent, to $241 million, compared to the year-ago $159 million. Operating income was $303 million, up from the year-ago $206 million. EBITDA moved up to $353.1 million from $259.3 million. Sales were up 54 percent, to $1.38 billion from the year-ago $898 million. All segments saw improved sales.
In addition, ICL announced that its board has decided to distribute a one-time dividend of $500 million, which it says will create a desirable debt-to-equity ratio and an appropriate return to shareholders. ICL came to this decision after analyzing its continuous improvement in its financial position, operational scope, profitability, cash flow, and ongoing reduction in debt.
The board is also re-establishing its policy of distributing a quarterly dividend of up to 70 percent of its net income. In line with this decision, it has approved the distribution of a dividend totaling $168 million for the first quarter. The total $668 million in dividends will be paid June 28, 2010.
ICL paid dividends of $155 million on April 27, 2010, for the fourth quarter 2009, bringing total 2009 dividends to $530 million.