ICL Group Ltd. reported a 71% drop in second-quarter net income attributable to shareholders of the company, to $163 million from the year-ago $563 million. Diluted earnings per share were $0.13 against $0.44 the previous year.
Second-quarter adjusted EBITDA fell 65%, to $441 million from the year-ago $1.26 billion, while sales were 36% lower year-over-year, to $1.83 billion from $2.9 billion. ICL reported specialties sales totaling $1.176 billion in the second quarter, a 30% decline from the year-ago $1.679 billion.
“Second-quarter sales of $1.83 billion were in line with revised expectations but down as expected versus an extraordinary second-quarter 2022, when commodity prices peaked,” said ICL President and CEO Raviv Zoller. “Lower prices in the second quarter also significantly affected our adjusted EBITDA. However, we did see some benefit from lower raw material and transportation costs. We continued destocking throughout the second quarter and proactively adjusted production as needed.”
ICL is maintaining its full-year 2023 adjusted EBITDA guidance of $1.6-$1.8 billion, which was revised downwards in late June due to the negative impact of the lower-than-anticipated China potash contract settlement price and the delayed recovery in demand for flame retardants (GM June 23, p. 25).Of the guidance total, $0.8-$0.9 billion is expected to come from the company’s specialties-focused businesses.
The group’s Potash segment posted a 43% decline in second-quarter sales, to $546 million on EBITDA of $213 million, down from last year’s $951 million and $616 million, respectively.
Potash production was 8% lower year-over-year, to 1.11 million mt from1.21 million mt, which ICL attributed in part to operational challenges at the ICL Iberia operation in Spain. A fatal accident at the Cabanasses mine in March was followed by a gradual ramp-up, which led to production losses (GM March 10, p. 28).
Second-quarter Potash sales volumes (including internal sales) were 10% higher, at 1.26 million mt versus 1.15 million mt last year, reflecting increased sales volumes to China, India, and the US, partially offset by lower sales to Brazil, ICL said.
ICL said its average potash price was $403/mt CIF during the quarter, down from $801/mt CIF in last year’s second quarter. ICL earlier had expected to produce about 4.8 million mt of potash this year, but that target has been revised to 4.7 million. ICL expects potash sales volumes in the third and fourth quarters to be “relatively similar” to the second quarter.
In terms of the average potash price for the year, Zoller said “that becomes easier for us now, as we are completely sold out of granular potash until the end of the year.” He said ICL still has some standard product to sell because shipments to India were halted and it hasn’t supplied all of the current India contract, which runs until Sept. 30. ICL expects its average potash price for the second half of 2023 to be around $340/mt CIF.
ICL’s Phosphate Solutions segment saw a 34% decline in sales, to $605 million from $915 million one year ago, while segment EBITDA dropped to $130 million from $315 million. ICL said lower prices and volumes were partially offset by lower raw material and transportation costs.
Growing Solutions posted a 31% decline in second-quarter sales, to $481 million from $700 million. Segment EBITDA was just $22 million, down from $155 million the previous year, with ICL citing margin decreases due to destocking in a declining price environment.
Polysulfate production at ICL’s Boulby operation in northeast England increased 9% year-over-year, to 267,000 mt, which ICL described an as quarterly record. The group noted that sales of some of its polysulfate-based products like FertilizerPlus were impacted by the decline in potash prices as well as the delayed start to the season, especially in Europe, where demand was weaker than expected.
For the first half of 2023, ICL reported net income attributable to shareholders of $443 million, down from the year-ago $1.195 billion. Diluted earnings per share were $0.34 against $0.93 the previous year. Six-month adjusted EBITDA was 53% lower at $1.05 billion versus $2.26 billion. Sales were down 27%, to $3.93 billion from $5.41 billion.
ICL’s Board has declared a cash dividend of $0.06321 per share, or about $81 million, to be paid on Sept. 13.