Tel Aviv — Israel Chemicals Ltd. (ICL) reported a decline in revenues and net profit in the second quarter of 2013. Revenues totaled $1.770 billion, versus $1.907 billion in the corresponding quarter in 2012. Net profit fell by 23 percent, to $316 million from $408 million. ICL attributed the decline to lower potash and phosphate prices and a decline in sales to China, as well as a drop in the sale of bromine compounds. Israeli analysts are predicting that company revenues and profits will decline in coming quarters following last week’s announcement by Russia’s Uralkali pulled out of a joint venture with Belaruskali, its Belarus based partner. ICL said “the Uralkali announcement creates uncertainty about potash prices and increases the risk of a drop in prices in the short term. But the long term market trend points to higher demand, which will boost prices.” ICL revenues totaled $1.072 billion, versus $1.188 billion in the second quarter of 2012. Operating profit of the division fell to $306 million from $410 million in the same quarter last year. Potash revenues fell to $593 million, versus $718 million last year. The company produced 1.230 million mt of potash, compared to 1.303 million mt in the second quarter of 2012. Phosphate and fertilizer revenues actually rose slightly, to $517 million versus $498 million last year. Phosphate rock production totaled 855,000 mt versus 851,000 mt last year, and fertilizer production totaled 464,000 mt versus 384,000 mt. Meanwhile, Standard & Poor’s Maalot Ltd. has put ICL on its watch list, with a negative outlook following the Uralkali developments. Maalot gave ICL an AA+ rating. In its latest report the rating company said “we believe that direct sales by Uralkali are liable to have adverse repercussions on ICL’s financial ratios as a result of the expected change in the dynamics which prevailed in the potash market up to now.” Maalot cited the possibility of aggressive price competition.
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