(Adds analysts' comments, closing share price)
By Tova Cohen
TEL AVIV, March 30 (Reuters) - Israel Chemicals (ICL) (ICL.TA), a maker of fertilisers and specialty chemicals, beat expectations with an 82.5 percent rise in fourth-quarter net profit, boosted by record sales and high fertiliser prices.
ICL also said it plans to boost production of potash and phosphate rock between 2008 and 2011 due to rising demand for fertilisers.
The second-largest company listed on the Tel Aviv Stock Exchange by market value, ICL's quarterly net profit rose to a record $164.7 million from $90.2 million a year earlier.
Sales in the October-December period increased 44 percent to $1.211 billion from $839.6 million.
Analysts on average expected ICL to earn $144.5 million on revenue of $1.074 billion, according to a Reuters poll.
ICL said the rise in sales was driven by strong demand for fertilisers, leading to continued sharp rises in potash and phosphate fertiliser prices and significantly higher potash sales volume.
Its acquisition in August of Supresta, a maker of phosphorus-based flame retardants, contributed $68.8 million to sales in the quarter.
The sales increase was countered partially by reduced sales of some bromine-based products, ICL said.
ICL's fertiliser segment posted sales of $675 million in the fourth quarter, up from $440 million a year earlier.
The profit increase reflects the sharp rise in sales of fertilisers, which was offset partially by the shekel ILS= strengthening against the dollar as well as higher shipping and energy costs.
Limor Gruber, an analyst at the Psagot Ofek brokerage, said that in light of the results she was raising her price target for ICL to 63 shekels from 54 and maintained a "buy" rating.
"We believe there is a good chance for a continued rise in fertiliser prices, which of course will strengthen the attractiveness of the investment," she wrote in a note.
The Harel Finance brokerage said it might raise its 55 shekel price target and maintained an "overweight" rating.
ICL shares closed down 1.2 percent at 49.41 shekels, compared with declines of 2.3 percent in the broader market.
HIGHER POTASH, PHOSPHATE OUTPUT
ICL, which produced 5.1 million tonnes of potash in 2007, or 9 percent of world output, said it will boost output of potash at various sites by a total of 800,000 tonnes by 2011.
It will boost output by 250,000 tonnes at its Dead Sea site starting in early 2009. In addition, it plans to use improved technology to gradually increase output at Sodom in southern Israel by 250,000 tonnes by 2011.
In Spain it has invested in new equipment and in England in developing new mining sites and plans further investments to gradually raise production by 300,000 tonnes by 2010.
ICL said that in light of increased demand for phosphate rock and phosphate fertiliser, it will boost output of the rock by 500,000 tonnes in 2008 to take advantage of high prices.
"The company will study further production increases until it utilises its full production capacity in accordance with the market's situation," ICL said.
It also plans to gradually increase phosphate rock production capacity by an additional 600,0000 tonnes by 2010.
In 2007 the company produced 3.1 million tonnes of phosphate rock and 1.8 million tonnes of fertiliser.
The company's board declared a dividend of $115 million to be paid on April 30.
ICL is 52 percent owned by holding company the Israel Corp (ILCO.TA). Potash Corp of Saskatchewan (POT.TO) (POT.N) holds 10 percent of the company.
(Additional reporting by Steven Scheer; editing by Sue Thomas)