UPDATE 1-Israel's ICL Q2 profit, revenue fall as COVID-19 hurts demand

(Adds details on cost cutting plans, future savings, potash sales)

TEL AVIV, July 29 (Reuters) - Israel’s ICL reported a drop quarterly earnings as sales fell on low commodity prices and a slide in demand for clear brine fluids and some flame retardants.

“The results for the second quarter of 2020 were impacted by the COVID-19 pandemic and the resulting decline in demand for oil,” ICL said on Wednesday. Clear brine fluids are used in oil and gas production and the flame retardants are used in the automotive and construction industries.

The fertiliser and speciality chemicals company posted diluted adjusted earnings per share (EPS) of 6 cents in the second quarter, down from 12 cents a year earlier. Sales declined to $1.2 billion from $1.43 billion.

Analysts on average forecast adjusted EPS of 5 cents on sales of $1.24 billion, according to I/B/E/S data from Refinitiv.

ICL said it was implementing cost cutting plans, including discontinuing unprofitable phosphate rock production in Israel, accelerating the closure of the Vilafruns potash mine in Spain, and a global reduction of about 250 employees, mostly through early retirement. The company expects annual savings of about $50 million, starting in 2021.

ICL is the world’s sixth-largest producer of potash with exclusive rights in Israel to extract minerals from the Dead Sea.

Second-quarter potash sales decreased to $340 million from $432 million a year earlier, as sales to Brazil and India fell and the average selling price per tonne declined to $226 from $289. Production slipped by 7,000 tonnes to 1.11 million as higher production in Israel was more than offset by lower output in Spain, mainly due to COVID-19 operational challenges.

The company said it would pay a quarterly dividend of $36 million, up from $30 million in the first quarter. (Reporting by Tova Cohen; Editing by Gareth Jones and Mark Potter)