May 16, 2011 / 6:07 AM / 8 years ago

UPDATE 2-Israel Chemicals Q1 profit beats forecast

* Q1 revenue $1.528 bln vs $1.389 bln forecast

* Net profit $279.7 mln vs $267 mln forecast

* Potash sales fall due to workers’ strike

* Shares up 1.9 percent

(Adds details, analysts’ comments, share reaction)

By Tova Cohen

TEL AVIV, May 16 (Reuters) - Fertiliser and specialty chemicals maker Israel Chemicals (ICL) (ICL.TA) reported a 16 percent rise in first-quarter net profit despite a workers’ strike as increased prices for its products boosted revenue.

ICL, the world’s sixth-larger producer of potash, said on Monday a 44-day strike by workers at its Dead Sea plant reduced potash production by 450,000 tonnes and led to lost sales, but it expects to make up most of these sales by year end.

Potash sales fell 12 percent to 1.05 million tonnes.

Citi analyst Sophie Jourdier said the results were strong.

“We had expected a greater effect from the six-week strike at the Dead Sea Works facilities,” Jourdier said.

Migdal Capital Markets head of research Amir Adar said the average price for potash of $435 per tonne was higher than the $400 he had expected.

ICL remains in a strong position to grow market share given its potash inventory of 1.3 million tonnes, Jourdier said.

“The outlook is encouraging — demand is strong, spot potash prices are now over $500 a tonne and negotiations are underway in India,” said Jourdier, who rates ICL “hold” with a 62 shekel price target.

Canada’s Potash Corp POT.TO, the world’s largest fertiliser producer, owns 13.9 percent of ICL, whose shares were up 1.9 percent to 57.08 shekels in morning trade in Tel Aviv.

Quarterly net profit rose to $279.7 million from $240.5 million a year earlier.

Revenue grew 11 percent to $1.528 billion, reflecting an increase in prices partly offset by reduced quantities of potash sold due to the strike. Revenue from Europe and North America rose, reflecting higher demand for fertilisers and bromine.

ICL, the second-largest company on the Tel Aviv Stock Exchange and controlled by conglomerate Israel Corp (ILCO.TA), was forecast to earn $267 million on revenue of $1.389 billion, according to Thomson Reuters I/B/E/S.

It is the world leader in brominated flame retardants — fire resistant chemicals used for consumer products — for the electronics industry.

Its industrial division, which includes bromine, posted a 28 percent rise in sales to a record $373 million as it benefited from higher prices for flame retardants and reduced production of bromine in China.

“Demand for flame retardants and most of the segment’s other products continues to grow throughout the world, and especially in the Far East, due to a resurgence in demand for consumer electronics, automobiles and building supplies,” ICL said.

In April ICL acquired Spanish specialty fertiliser company Fuentes and said it would develop over one billion tonnes of mineral salt polyhalite reserves beneath its UK potash mines.

It said it would pay a dividend of $195 million on June 28, up frm $170 million in the fourth quarter. (Editing by Jon Loades-Carter)

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