TEL AVIV, Israel, March 30 /PRNewswire-FirstCall/ -- Highlights:
2007 2006 Q4 2007 Q4 2006 Sales $4,100.2M $3,258.2M $1,211.0M $839.6M Operating income $714.7M $536.4M $223.5M $147.7M Net income $535.6M $373.9M $164.7M $90.2M Gross margin 36.9% 35.4% 39.3% 38.6% Operating margin 17.4% 16.5% 18.5% 17.6% Net margin 13.1% 11.5% 13.6% 10.7%
- Record sales: $4.1 billion sales driven by strong demand for fertilizers, leading to continued sharp rises in potash and phosphate fertilizer prices and significantly higher potash sales volumes, as well as the Supresta acquisition, mitigated by somewhat lower volumes for some brominated products.
- Record profitability: $535.6 million net profit reflecting price rises and sales volumes for potash and phosphate fertilizers, countered by reduced production quantities of some brominated products, the strengthening of the shekel against the dollar, and increased energy, sea shipping and raw material prices, as well as some other inputs.
- Acquisitions momentum: Supresta acquired in the third quarter; Fire-Trol acquired in the first quarter; Biogema and Henkel's water treatment business acquired in the fourth quarter (Biogema and Henkel closings were in January 2008).
- Conversion to natural gas supporting environmental responsibility: after the end of the quarter ICL announced that it signed an agreement with Yam Tethys for the supply of natural gas
Israel Chemicals Ltd. ("ICL") , a multinational fertilizer and specialty chemicals company, today reported results for the fourth quarter and full year ended December 31, 2007.
For 2007, sales increased by 25.8% to a record $4,100 million from $3,258 million in 2006. The rise in sales derived primarily from ICL Fertilizers, which is benefiting from sharply growing demand and tight supply, an environment that is leading to steep and continuous increases for both potash and phosphate fertilizers, and from the acquisition of Supresta, which contributed approximately $104.9 million since its acquisition in August 2007. The revenue increase was countered partially by reduced sales of some bromine-based products. On a geographic basis, sales rose in all target markets, with particularly strong growth achieved in South America, Asia and Western Europe.
Operating income for the year was $714.7 million, an increase of 33.2% compared with $536.4 million in 2006, resulting in an operating margin of 17.4% compared to 16.5% in 2006. Net income for the period increased by 43.3% to $535.6 million from $373.9 million in 2006. The increase in profitability reflected the period's sharp price rises and sales volumes for potash and phosphate fertilizers; countered partially by reduced production quantities of some brominated products; the strengthening of the shekel against the dollar, which increased operating expenses significantly as expressed in dollar terms; and increased sea shipping, energy and raw material prices.
Cash flow for the year, excluding securitization activities, reached $573.0 million, an increase of 60.0% compared to $358.0 million in 2006. This sum included the contribution of $45 million in insurance payments received during the year in compensation for flood damage. The year's cash flow, combined with a $437.0 million increase in net financial debt, was the primary source of funding for the Company's $192.3 million investment in fixed assets, $354.8 million acquisition of Supresta, and $547.0 million dividend payments.
For the three month period, sales increased by 44.2% to a record $1,211.0 million compared to $839.6 million in the fourth quarter of 2006. Operating income for the quarter was a record $223.5 million, an increase of 51.3% compared with $147.7 million in the fourth quarter of 2006. Operating margin for the quarter was 18.5% compared to 17.6% in the fourth quarter of 2006, reflecting the factors explained above. Net income for the quarter was a record $164.7 million, an increase of 82.5% compared with $90.2 million in the fourth quarter of 2006.
The highlights of ICL's core business segments for 2007 include:
- ICL Fertilizers: sales for 2007 increased by 45.1% to $2,147.1 million, representing 52.4% of the Company's total revenues (before offsets of inter-segment sales). This reflected significant price increases of potash and phosphate fertilizers, together with a sharp rise in quantities of potash sold as compared to 2006, when sales were low reflecting a temporary freeze of potash markets.
The segments' operating income for the year increased by 94.5% to $518.9 million, raising the sector's operating margin to 24.7% from 18.0% in 2006. This reflected the sharp rise in selling prices, countered somewhat by increasing raw material and bulk sea transportation costs, together with the appreciation of the shekel compared to the dollar.
- ICL Industrial Products: sales for 2007 increased by 10.4% to $925.0 million, representing 22.6% of total revenues (before offsets of inter-segment sales). This reflected the addition of $104.9 million in revenues from Supresta, which ICL acquired on August 14, 2007, together with an increase in sales of inorganic bromated products (except for drilling fluids), magnesia and chlorine-based products. This was countered by a decrease in sales of brominated flame retardants due to a slowdown in the printed electronics industry and more intense competition, primarily from China, as well as a decrease in sales of agricultural products due to the Montreal Protocol.
Operating income for 2007 decreased by 40.5% to $124.2 million due primarily to the lower sales volumes and reduced manufacturing quantities, in accordance with sales requirements, together with increased raw material, energy and other input costs. In addition, the appreciation of the shekel affected the segment's shekel-based operating expenses.
- ICL Performance Products: sales for 2007 increased by 7.2% to $1,101.6 million, representing 26.8% of total revenues (before offsets of inter-segment sales). This reflects the strengthening of the Euro against the dollar, a rise in the quantities sold of fire safety products in North America, and price as well as some moderate increases in sales volume for some of the segment's product lines.
Operating income increased by 3.5% to $88.9 million, reflecting the rising sales of the segment's higher-margin fire safety products and the success of its efficiency program, countered partially by higher raw material costs. After the reporting period, the segment acquired the water treatment business unit of the Henkel Group, a step which will expand its operations in the water treatment industry, and Biogema, a leading European provider of Fire Safety products.
Dividends:
- On March 27, 2008, the Board of Directors declared that a dividend of $115 million ($114.8 million net of the portion paid to consolidated companies) would be paid on April 30, 2008.
- On December 17, 2007, the Company paid a dividend totaling $104.8 million ($104.6 million net of the portion paid to consolidated companies).
- On September 18, 2007, the Company paid a dividend totaling $88.1 million ($87.9 million net of the portion due to consolidated companies).
- On June 18, 2007, the Company paid a dividend totaling $66.8 million ($66.7 million net of the portion paid to consolidated companies).
- On April 25, 2007, the Company paid a dividend of $283.9 million ($283.4 million net of the portion paid to consolidated companies).
Beginning of conversion to natural gas: After the end of the quarter, in March 2008, the Company signed an agreement to purchase approximately two billion cubic meters of natural gas from the Yam Thetys Partnership from 2008-2015. The agreement is estimated at a value of approximately $250-$330 million at current price levels. The conversion of many of the Company's manufacturing facilities from fuel oil and liquid gas to natural gas will significantly reduce their emissions and is expected to save more than $100 million per year and.
About ICL
ICL is one of the world's leading fertilizer and specialty chemicals companies. ICL produces approximately a third of the world's bromine and approximately 10% of its potash. ICL is a leading supplier of fertilizers in Europe and a major player in specialty fertilizer market segments. One of the world's most integrated manufacturers and suppliers of phosphate products, ICL has become the world's leading provider of pure phosphoric acid and a major specialty phosphate player. The Company employs approximately 9,900 employees worldwide.
ICL is comprised of three core segments: ICL Fertilizers, ICL Industrial Products and ICL Performance Products. Its major production activities are located in Israel, Europe, the US, South America and China, and are supported by major global marketing and logistics networks. ICL benefits from exclusive concessions to extract minerals from Israel's Dead Sea, a vast source of high-quality and low-cost potash, bromine, magnesium chloride and sodium chloride. ICL also mines phosphate rock from Israel's Negev Desert and potash and salt from its mines in Spain and the UK.
ICL's (Israel Chemicals Ltd.) revenues for 2007 were $4.1 billion with operating income of $715 million. ICL's shares are traded on the Tel Aviv Stock Exchange .
(financial tables follow) ICL PRINCIPAL FINANCIAL RESULTS PERIODS ENDING DECEMBER 31, 2007 3 months ended December 12 months ended December 31, 31, 2007 2006 2007 2006 $ % of $ % of $ % of $ % of millions sales millions sales millions sales millions sales Net Sales 1,211.0 100.0 839.6 100.0 4,100.2 100.0 3,258.2 100.0 Gross profit 476.3 39.3 324.5 38.6 1,515.0 36.9 1,153.2 35.4 Operating 223.5 18.5 147.7 17.6 714.7 17.4 536.4 16.5 income Income before 189.8 15.7 117.3 14.0 641.2 15.6 494.9 15.2 taxes Net income 164.7 13.6 90.2 10.7 535.6 13.1 373.9 11.5 EBITDA* 274.6 21.6 200.9 23.9 914.2 22.0 735.7 22.6 Net cash (22.5) 88.2 354.6 358.6 provided by operating activities Net cash 149.7 66.2 573 358 provided by operating activities excluding securitization transactions Investment in 67.2 42.0 553.8 137.4 property, plant and equipment less grants received * EBITDA is calculated as follows: 3 months ended December 12 months ended December 31, 31, 2007 2006 2007 2006 Net income 164.7 90.2 535.6 373.9 Amortization & 50.6 45.3 195.4 174.5 depreciation Financing 19.9 14.2 54.1 39.3 expenses, net Taxes on income 25.4 31.4 113.1 136.7 Unusual or 14.0 19.8 16.0 11.3 one-time expenses EBITDA 274.6 200.9 914.2 735.7 ICL PRINCIPAL RESULTS FROM CORE BUSINESS SEGMENTS THREE MONTHS AND FULL YEAR ENDED DECEMBER 31, 2007 3 months ended December 12 months ended December 31, 31, 2007 2006 2007 2006 Sales CIF by $ % of $ % of $ % of $ % of segment millions gross millions gross millions gross millions gross sales sales sales sales ICL 675.0 55.7 440.0 52.4 2,147.1 52.4 1,479.6 45.4 Fertilizers ICL 285.9 23.6 174.1 19.4 925.0 22.6 837.8 23.9 Industrial Products ICL 272.8 22.5 251.4 28.0 1,101.6 26.8 1,027.9 29.4 Performance Products Other and (22.7) (25.9) (73.5) (87.1) offsets Total 1,211.0 839.6 4,100.2 3,258.2
Note: Segment sales data and their percentage of total sales are before offsets of inter-segment sales.
3 months ended December 31, 12 months ended December 31,
2007 2006 2007 2006
Operating $ %of $ %of $ %of $ %of
in- millions segment millions segment millions segment millions segment
come by sales sales sales sales
segment
ICL 187.8 27.8 102.7 23.3 518.9 24.7 266.8 18.0
Fertilizers
ICL 22.3 7.8 31.0 17.8 124.2 13.4 208.9 24.9
Industrial
Products
ICL 15.1 5.5 17.0 6.8 88.9 8.0 85.9 8.4
Performance
Products
Other and (1.7) (3.0) (17.3) (23.3)
offsets
Total 223.5 18.5 147.7 17.6 714.7 17.4 536.4 16.5
Press Contact
Fleisher Communications and Public Relations
Amiram Fleisher
+972-3-6241241
