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ICL Reports Financial Results For The Third Quarter Of 2012

TEL AVIV, Israel, November 21, 2012 /PRNewswire/ --

  • ICL's Leading Market Positions & Balanced Portfolio Continue to Counterbalance External Headwinds
  • Q3'12 Revenues Down $9M Compared with Q3'11 Before Exchange Rate Fluctuations, Which Accounted for $72M
  • In Contrast to   Low Demand in World Potash Markets,   ICL Fertilizers' Q3 Potash Shipments Were Similar to Their Level in Q3'11
  • Weak Global Economic Environment Impacting ICL-IP & ICL-PP   Less Than In Previous Cycles

ICL (TASE:ICL), a multinational fertilizer and specialty chemicals company, today reported its financial results for the third quarter ended September 30, 2012.

Mr. Stefan Borgas, ICL ' s CEO since September 20, 2012, commented: "Despite the challenging global economic environment, ICL continues to demonstrate resilience due to its numerous leading market positions and a balanced portfolio that counterbalances low economic growth. The products that we manufacture for the agriculture, food, water and materials markets are an answer to the essential, fundamental requirements of the world's growing population. ICL develops products and processes that will enable it to grow and strengthen the contribution that it makes to consumers in these critical areas."

Financial Results

Revenues: ICL's revenues for the third quarter of 2012 totaled $1,817.5 million, an $81 million decline compared with $1,898.3 million in the third quarter of 2011. The decrease was due primarily to the impact of unfavorable exchange rate fluctuations, which accounted for approximately $72 million of the difference. The Company's revenues during the quarter were enhanced by the consolidation of companies acquired during the past 12 months.

For the nine-month period, sales totaled $5,334.2 million compared with $5,355.5 million in the first nine months of 2011, a decline of approximately $21 million. Excluding the impact of unfavorable exchange rate fluctuations (primarily the Euro/dollar exchange rate), which reduced revenues by approximately $155 million, the Company's sales for the quarter would have risen by $134 million for the nine-month period. This reflected the rise of prices, on average, and the stable quantities sold, coupled with the contribution of newly-consolidated companies acquired during the past 12 months.

Gross profit: Gross profit for the third quarter totaled $786.0 million compared with $871.4 million in the third quarter of 2011. The decline reflected the period's lower sales, coupled with the impact of increased raw material, energy and other costs. Gross margin for the period was 43.2% compared with 45.9% for the third quarter of 2011.

For the nine-month period, gross profit totaled $2,250.1 million, a 5% decline compared with $2,380.2 million in the first nine months of 2011. Gross margin for the period was 42.2% compared with 44.4% for the first nine months of 2011.

Operating income: Operating income for the third quarter of 2012 was $487.9 million compared with $556.2 million for the third quarter of 2011. For the nine-month period, operating income totaled $1,382.5 million, a 5% decline compared with $1,459.5 million in the first nine months of 2011. The decrease derived from the reduction in the gross margin, countered partially by reduced sales, marketing and administrative expenses.

Net income: Net income to shareholders for the third quarter of 2012 totaled $394.8 million compared with $436.3 million in the parallel period of 2011. For the nine-month period, net income to shareholders totaled $1,091.0 million compared with $1,142.2 million in the first nine months of 2011.

Cash flow: During the third quarter of 2012, operating cash flow totaled $680.1 million, a 36% increase compared with $498.8 million in the third quarter of 2011. For the nine-month period, cash flow totaled $1,317.7 million, an increase of 42% compared with $925.0 million for the first nine months of 2011.

Outlook:

  • The continued decline of global grain stock-to-use ratios to historically low levels, as predicted by the U.S. Department of Agriculture, and other indicators point to a market environment that will support strong sales of fertilizers in the 2013 planting season.
  • The completion of potash deliveries under the framework of existing contracts signed with customers in India and China, coupled with the delay of new contract renewals with these customers, is expected to reduce potash shipments during the fourth quarter as compared with the fourth quarter of 2011.
  • ICL continues manufacturing potash at its normal rate, benefiting from its strategic ability to store very large quantities of potash outdoors .
  • Due to the decrease in demand for flame retardants during the third quarter, production was halted at one of ICL Industrial Products' production units. This shutdown is expected to continue into the fourth quarter.
  • Due to the seasonality of ICL Performance Products' sales of some of its products, especially its fire safety products, and the general holiday-related slowdown of sales in December, the fourth quarter is generally characterized by lower profit margins.

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