ICL Group Ltd., Tel Aviv, reported a 17% increase in net income attributable to shareholders of the company for the fourth quarter ended Dec. 31, 2022, to $331 million versus the year-ago $283 million, missing the average analyst estimate of $398.8 million (Bloomberg Consensus).
Diluted earnings per share for the quarter was $0.25, compared with the year-ago $0.21.
Revenue increased 3% to $2.09 billion, up from $2.04 billion the previous year, versus the average analyst estimate of $2.2 billion, while operating income came in 17% up on the year at $540 million, up from $461 million.
“ICL delivered record sales of more than $10 billion and adjusted EBITDA of more than $4 billion [$4.01 billion] for 2022, and this amount exceeded our guidance, which we raised each quarter,” said ICL President and CEO Raviv Zoller, highlighting the strong performance of all of the specialities’ businesses (Industrial Products, Phosphate Specialties, and Growing Solutions), as well as significant market upside.
The company said last November it expected its FY2022 adjusted EBITDA to be at the upper end of its previously issued guidance range for adjusted EBITDA of between $3.8 billion to $4.0 billion (GM Nov. 11, 2022).
Zoller noted that as expected, ICL saw a return to more traditional seasonality, in the fourth quarter.
“Throughout the year, we navigated global uncertainty, supply chain challenges, and cost inflation, while simultaneously focusing on operating efficiency and productivity, introducing new innovative products, and delivering value to all of our stakeholders,” said Zoller.
Full-year 2022 net income attributable to shareholders of the company came in 176% up on the previous year, at $2.16 billion (diluted EPS: $1.67) versus the year-ago $783 million (diluted EPS: $0.60).
FY2022 revenue increased by 44% to $10.02 billion, up from $6.96 billion, while operating income rose by 191% to $3.52 billion from $1.21 billion the previous year.
For the full year 2023, ICL expects adjusted EBITDA to be within a range of $2.2 billion to $2.4 billion (following markets’ return to more normalized conditions in fourth quarter of 2022) with approximately $1.1 billion of this amount estimated to come from the company’s specialties focused businesses.
Looking at individual business segments, the Potash segment reported a 87% increase year-over-year in annual sales in 2022 to $3.31 billion, up from $1.78 billion, and a significant rise in segment EBITDA, to $1.99 billion from $547 million the previous year.
Potash production was up 3% year-over-year in the fourth quarter, to 1.22 million mt, while FY2022 output increased by 4% to 4.69 million mt.
The company cited ongoing operational improvements at both ICL Dead Sea and ICL Iberia in Spain. It highlighted that the Dead Sea operation reached an all-time annual potash production record of 4.011 million mt in 2022, following the continued process improvements.
Operational improvements at ICL Iberia in 2022 included, among others, the connection of the ramp to the Cabanasses mine. ICL said it expects ongoing performance improvement projects at the site to result in increased production going forward and to address operational and geological challenges, which it said had negatively impacted production in recent years.
Fourth-quarter potash sales volumes (including internal sales) declined 7%, to 1.07 million mt versus the year-ago 1.15 million mt. ICL reported decreased sales volumes from ICL Dead Sea in the quarter, partially offset by higher sales volumes from ICL Iberia.
Full-year sales volumes saw a small uptick (1.5%) to 4.5 million mt, mainly due to higher sales to India, Brazil, and Asia, but partially offset by lower sales to Europe and the US, ICL reported.
ICL Potash Production, Sales Volumes, Average Price
| ‘000 mt | 4Q-2022 | 4Q-2021 | % change | FY2022 | FY2021 | % change |
| Production | 1,224 | 1,188 | +3 | 4,691 | 4,514 | +4 |
| Total sales (including internal sales) | 1,068 | 1,147 | (7) | 4,499 | 4,434 | +1.5 |
| Average potash price – CIF ($/mt) | 594 | 520 | 682 | 356 |
ICL expects to produce about 4.8 million mt of potash in 2023, 2% up over last year, and is assuming sales volumes of 4.8 million mt, a 7% increase, Zoller told analysts at a company earnings call.
“We do have some capability to go down on inventory and go up to 4.9 million mt. But in terms of modeling, we modeled 4.8 million mt,” he said.
ICL plans to get to production of 5.1 million mt of potash by 2026, Zoller said.
In terms of pricing, the company sees its realized potash price per ton averaging about $500/mt in 2023. This compares to $643/mt for FY2022, which was up more than 90% over 2021. For the fourth quarter, the company achieved $564/mt, which was up 16%, or more than $75 versus the fourth quarter of 2021.
In the company’s Phosphate Solutions segment, ICL said the specialty phosphates business benefited from higher prices in all regions in 2022, while persistent supply-chain challenges negatively impacted raw material and production costs.
The segment posted a FY2022 segment EBITDA of $966 million on sales of $3.11 billion, up from the prior-year $501 million and $2.25 billion respectively.
The company reported annual sales of its phosphate fertilizers business within the segment saw an increase in annual sales on both higher prices and volumes. While noting that prices declined during the fourth quarter, the company said they began to moderate by the end of the year, due to increasing demand – mainly in Latin America, and also supported by better affordability and limited supply available from China.
ICL is sold out on phosphate until the end of the second quarter of 2023, Zoller told analysts at a company earnings call.
“If you look back to previous years, that’s more robust than in the past,” he said.
Zoller noted “the lowest price in the world right now is in the US,” which is why the company is not selling in the US.
“I think we have sold a few thousand tons to cover commitments we had in the US, but we have no reason to sell in the US at this point,” said Zoller.
The Growing Solutions segment (formerly known as Innovative Agricultural Solutions) in 2022 changed its managerial structure, as well as its name, so that the activities of ICL Boulby and other European business components were transferred from the Potash and Phosphate Solutions segments, respectively, to the Growing Solutions segment.
The segment posted an FY2022 segment EBITDA of $448 million on sales of $2.42 billion, up from $135 million and $1.67 billion, respectively, the previous year.
At ICL Boulby, annual production of polysulfate – the marketed form of polyhalite – increased by 21% to 953,000 mt in 2022. The company said sales of FertilizerpluS products increased year-over-year due to higher selling prices, but did not disclose any numbers.
Based on the fourth-quarter results, ICL’s Board of Directors declared a dividend of 13.83 cents per share, or approximately $178 million, payable on March 15, 2023.