ICL Group, Tel Aviv, posted a 125 percent rise in first-quarter net income attributable to shareholders, to $135 million, up from $60 million a year ago. Adjusted earnings per share were $0.11, up from $0.05 per share.
Sales for the first quarter were up 14 percent to $1.51 billion, from the year-ago $1.32 billion. EBITDA increased 18 percent to $295 million, versus the previous year’s $250 million.
ICL’s shares climbed as much as 3.7 percent to the highest level since November 2018 as its adjusted earnings per share beat the average analyst estimate of $0.07 (range $0.04 to $0.08, Bloomberg consensus), according to a Bloomberg report.
“ICL delivered quarterly sales of $1.5 billion for the first time since 2014. We executed our growth strategy, which resulted in record results across all our specialty businesses,” said ICL President and CEO Raviv Zoller.
The company cited in particular record sales and EBITDA for its Industrial Products division, as it continued to grow, due to a shift to long-term contracts, and saw strong demand returning to most end-markets.
It said Phosphate and Food Specialties also helped to deliver record sales and EBITDA, which was up more than 60 percent following 18 months of steady growth driven by product innovation and cost efficiencies as the business continued to shift to specialties.
ICL also highlighted “the double digit” growth and higher margin for its Innovative Ag Solutions (IAS) business.
“For the first quarter, IAS profitability was greater than for all of 2019, and we are poised for further growth as we expand our footprint in Brazil,” said Zoller.
Due to the improved market conditions, combined with prompt execution in the first quarter, ICL has raised its full-year 2021 adjusted EBITDA guidance. It said the probability of the company achieving the high-end of its previous guidance range has risen “considerably,” and it now expects FY2021 adjusted EBITDA of $1.09 billion to $1.18 billion, compared with the previous guidance of $1.02 billion to $1.12 billion.
Selected Segment Results
| 1Q-2021 | 1Q-2020 | % Change | |
| Potash | |||
| Segment sales1 $m | 385 | 314 | +23 |
| Segment profit $m | 29 | 14 | +107 |
| Phosphate Solutions | |||
| Segment sales1 $m | 545 | 502 | +9 |
| Segment profit $m | 40 | 9 | |
| Innovative Ag Solutions | |||
| Segment sales1 $m | 241 | 199 | +21 |
| Segment profit $m | 22 | 14 | +57 |
1 Includes sales to internal customers
For its Potash division, ICL saw a 23 percent rise in first-quarter sales to $385 million, while the segment profit was up 107 percent from a year-ago, at $29 million. The company said it achieved record potash production at ICL Dead Sea for the quarter, with more than 1 million mt produced in the first quarter. The annual one-week shutdown at the Sdom site was completed in April.
ICL said in February it expected potash production at Sdom to be between 3.9-4 million mt in full-year 2021 (GM Feb. 12, p. 31), but it provided no update in its first-quarter earnings report.
At ICL Iberia in Spain, the company said the ramp between the Cabanasses mine and the Suria plant is now operational, following a three-week shutdown beginning in late March. The project is expected to increase the mine’s capacity, with the annual run rate projected to reach approximately 1 million mt by the end of 2021, which is expected to lower the cost per ton.
In April, the company inked a new supply contract with Indian Potash Ltd. (IPL) to supply 600,000 mt firm of potash, with mutual options for an additional 50,000 mt, through December 2021, at $280/mt CIFFO (GM April 9, p. 17).
ICL did not provide any potash sales volume figures for the quarter.
The ICL Boulby polyhalite operation in northeast England achieved a 3 percent rise in production of polysulfate – the marketed form of polyhalite – in the first quarter compared with a year-ago, with output reaching 183,000 mt. Polysulfate sales were up 38 percent from first-quarter 2020, at 188,000 mt.
ICL CFO Kobi Altman, responding to an analyst’s question at a first-quarter earnings call on May 6, conceded the Boulby polysulfate business is not profitable yet. “We are still producing at a little lower than 1 million mt, and we need to get to over 1 million mt, but we believe that will happen this year,” he said.
“The other side of it is that we need to demand a higher premium on the selling price than currently is happening. We see we are getting those premiums in Europe, but not so much in other territories. But we are making advances in that respect.”
ICL’s Phosphate Solutions business segment recorded a 9 percent increase in first-quarter sales to $545 million, which the company described as “a record.”
Within the division, sales of phosphate specialties were up 5 percent from a year-ago, at $294 million, while phosphate commodities sales rose 13 percent to $251 million. ICL noted the commodity price improvement in the first quarter as contributing to the latter sales increase, along with increased prices for raw materials, including sulfur, and higher freight rates.
The company highlighted higher phosphate fertilizer sales in the quarter, with continued recovery across all markets, as well as higher phosphate salts sale, with an improvement in food grade phosphates sales partially offset by lower sales of industrial salts. White phosphoric acid sales were up significantly, driven by increased volumes in China and South America.
ICL reported its YPH phosphate joint venture in China had its “best quarter ever,” and cited higher prices, increased volume and improved product mix, as well as procurement and production efficiencies.
For its Innovative Ag Solutions business, the company reported a record sales of $241 million in the first quarter, up 21 percent on the year. It said the business benefited from unified sales and marketing organization, with strong demand in Europe, the U.S., and Asia, as well as higher volumes, and improved product mix.
The company highlighted a “double-digit” sales increase in the division’s Specialty Agriculture due to higher volumes in most regions and a positive exchange rate impact in Europe.
Turf and Ornamental sales were up 25 percent on the year, following a soft first quarter 2020. The company cited a continuation of positive gardening and landscaping trends as helping drive volume as well as geographical expansion into Eastern Europe and Asia. Profitability benefited from high margin product sales, which were boosted by new product launches, as well as the aforementioned unified sales and marketing organization, the company said.
As previously reported, ICL in March announced an agreement to acquire Compass Minerals’ South American Plant Nutrition business for total potential gross cash proceeds of approximately $418 million (GM March 26, p. 1).
The Israeli company said the transaction, when combined with existing ICL operations in Brazil and the acquisition of Fertiláqua, which was completed in (GM Jan. 8, p. 30), is expected to position ICL as Brazil’s leading specialty plant nutrition company, and will allow ICL “to deliver the critical mass” it has been seeking in the country.
ICL’s board has declared a dividend of 5.25 U.S. cents per share, or about $67 million in the aggregate, which will be payable on June 16, 2021.