ICL Group, Tel Aviv, posted a big jump in adjusted net income attributable to shareholders of the group for fourth-quarter 2021, to $339 million, up from the year-ago $68 million. Adjusted earnings per diluted share were $0.26, up from $0.05 a year earlier.
Adjusted EBITDA for the quarter was $575 million, up from the prior-year $268 million, while fourth-quarter sales increased by 55 percent, to $2.04 billion, from $1.32 billion.
“We continued to benefit from our strategic focus on growing our long-term specialty solutions businesses, as performance in the fourth quarter was also supported by increased demand and higher prices in most markets and continued commodity upside momentum, said ICL President and CEO Raviv Zoller.
“All four of our businesses contributed, with double-digit growth in sales and EBITDA and, as a result, we were able to deliver yet another quarter of margin expansion and bottom-line improvement,” he said.
For full-year 2021, ICL reported a net income attributable to shareholders of $783 million, up substantially on the prior-year’s $11 million, while adjusted net income increased 219 percent on the year, to $824 million, up from $258 million.
Adjusted EBITDA came in 66 percent up on FY2020, at $1.64 billion versus $990 million, while full-year sales increased 38 percent to $6.96 billion, from $5.04 billion.
ICL said it expects full-year 2022 adjusted EBITDA of $1.85-$2.05 billion, with EBITDA of $875-$925 million coming from its specialties focused business.
ICL selected business segments
| 4Q-2021 | 4Q-2020 | FY2021 | FY2020 | |
| Potash | ||||
| Segment sales (including internal sales) $m | 698 | 379 | 1,931 | 1,346 |
| Segment operating income $m | 244 | 40 | 399 | 120 |
| Segment EBITDA $m | 288 | 83 | 564 | 286 |
| Production ‘000 mt | 1,188 | 1,208 | 4,514 | 4,527 |
| Sales (including internal sales) ‘000 mt | 1,147 | 1,333 | 4,434 | 4,666 |
| Phosphate Solutions | ||||
| Segment sales (including internal sales) $m | 609 | 501 | 2,432 | 1,948 |
| Segment operating income $m | 97 | 21 | 307 | 66 |
| Segment EBITDA $m | 146 | 75 | 522 | 276 |
| Innovative Ag Solutions | ||||
| Segment sales (including internal sales) $m | 380 | 163 | 1,245 | 731 |
| Segment operating income $m | 33 | 5 | 121 | 40 |
| Segment EBITDA $m | 48 | 11 | 159 | 65 |
The Potash business segment posted an 84 percent increase in sales (including internal sales) in the fourth-quarter, to $698 million, while EBITDA grew 247 percent on the same year-ago quarter, to $288 million.
The segment’s operating income in the quarter jumped to $244 million, from the year-ago $40 million. ICL cited the positive impact of a $259 per mt or 114 percent increase in the average realized price of potash from fourth-quarter 2020 to $487/mt, as well as an increase in the selling prices of FertilizerpluS products as mainly driving the significant rise in operating income. This more than offset the impact of lower potash sales volumes at both ICL Dead Sea and ICL Iberia.
The group said it expects recent price increases will have a continued positive impact into first-half 2022.
Potash production in the quarter dipped 2 percent, to 1.19 million mt, from the prior-year 1.21 million mt. ICL attributed the dip to a decrease in total production at the Dead Sea site in parallel with an increase in granular potash production. This impact was partially offset by higher production at ICL Iberia in Spain, following the connection of the ramp to the Cabanassess mine in the first quarter of 2021.
Fourth-quarter potash sales volumes (including internal sales) fell 14 percent lower year-on-year, to 1.15 million mt, down from 1.33 million mt. The group cited lower sales volumes to China, India, the U.S., and Spain, partially offset by higher sales to Brazil, Taiwan, and Morocco.
Full-year 2021 potash production was 4.51 million mt, versus the year-ago 4.53 million mt, while full-year sales (including internal sales) were down 5 percent, to 4.43 million mt, from the prior-year 4.67 million mt.
ICL highlighted the completion of the assembly of all P-9 pumping units at the Dead Sea site in the fourth quarter, and the start of their operations in early 2022. In both the Dead Sea and Spain, the group said it maximized its granular potash production “through debottlenecking efforts,” which resulted in higher realized prices.
“The shift not only meant granular comprised approximately 50 percent of our production but it also added roughly $35 million to operating income in 2021,” Zoller told analysts at a group earnings call on Feb. 9.
Zoller told analysts the current plan is for potash sales volumes of around 1.3 million mt for 2022 to India and China. He noted this is a little bit more than 25 percent of ICL’s 4 million mt annual potash production capability. He said ICL typically sells between 1.2-1.5 million mt/y combined to the two countries
The CEO did not speculate when he thought new supply contracts to India and China would get concluded, but cited rumors suggesting the new price for China could be “somewhere between $500 and $600/mt [CFR],” that is, more than doubling on the last contract price of $247/mt CFR.
At ICL Boulby in northeast England, ICL saw an increase in both polysulfate production and sales volume in the fourth quarter, with production up 36 percent from a year ago to around 214,000 mt, while sales volumes increased 42 percent to around 230,000 mt.
As previously announced, in December the company secured approval for Boulby’s application to continue mining and production through 2048 (GM Dec. 3, 2021).
Beginning from Jan. 1, 2022, ICL said the Boulby operation will move from the Potash business segment to the company’s Innovative Ag Solutions (IOA) segment, which will “better align” Boulby’s speciality products, as the company continues to focus on targeting long-term growth through specialty solutions.
Zoller conceded that the Boulby polysulfate business, while it has developed some speciality products based on polysulfate that can command a premium, “Boulby is still not a profitable business.”
ICL’s Phosphate Solutions business segment reported a 22 percent increase in fourth-quarter sales (including internal sales), to $609 million, while EBITDA almost doubled, to $146 million.
The segment’s fourth-quarter operating income jumped to $97 million, from the prior-year $21 million.
Phosphate specialities sales in the quarter were up 28 percent on the year, at $373 million, while operating income jumped 92 percent to $46 million.
Fourth-quarter sales of phosphate commodities increased 12 percent from a year-ago, to $236 million and operating income more than doubled to $51 million, up from the year-earlier $54 million.
Higher prices and increased demand for phosphate products drove the higher results, despite continued supply chain, raw material and production cost pressures, said ICL. The group also highlighted strong results from its YPH joint venture in China.
As previously announced as 2021 drew to a close, ICL secured an extension to its phosphate mining concession in Rotem, which has provided for an additional three years mining through the end of 2024 (GM Jan. 7, p.29).
ICL’s Innovation Ag Solutions (IAS) business segment posted a 133 percent increase in fourth-quarter sales (including internal sales), to $380 million and a 336 percent increase in EBITDA to $48 million. Segment operating income in the quarter rose to $33 million, up from just $5 million a year earlier.
The group said strong organic growth, in addition to the acquisitions last year of two Brazilian specialty plant nutrition businesses – Fertiláqua, completed in January 2021 (GM Jan. 8, 2021) and ADS (formerly Compass Minerals América do Sul SA) completed in July 2021 (GM July 2, 2021) – contributed to the significant year-over-year improvement in the segment’s results in the fourth quarter. It pointed to strong demand and increased volumes across most regions and product lines, along with higher prices, which partially offset higher raw material costs.
ICL said its Board of Directors has declared a quarterly dividend of 13.18 U.S. cents per share (approximately $169 million), payable on March 8 to shareholders of record on Feb. 23, 2022.