ICL has reported its 3Q16 financial results.
Consolidated sales of US$1383 million were similar to prior-year sales of US$1379 million. Higher quantities sold in the Company’s Essential Minerals division, as well as organic growth in the Specialty Solutions division were mostly offset by weaker pricing in the Essential Minerals division.
In the third quarter, the Company reported an operating loss of US$331 million, which includes write-offs resulting from the previously disclosed termination of projects totalling US$489 million: US$282 million related to the discontinuation of a global ERP project and a US$202 million charge related to the termination of a potash project in Ethiopia. In addition, an asset write-off of US$5 million was recorded at ICL UK following the transition to producing Polysulphate.
Additional items totalling US$6 million include provision for early retirement and prior periods’ royalties offset by the cancellation of provisions for retroactive electricity charges and legal claims. Excluding these items, adjusted operating profit totalled US$164 million compared to US$242 million in the prior-year. The decline derived mostly from lower Essential Mineral margins due to unfavourable pricing.
Third quarter results benefitted from the Company’s strategy to grow its specialty business while reducing the impact of commodity pricing. ICL’s potash volume increased sequentially and year-over-year following the stabilisation of the market as a result of contracts signed with Chinese and Indian customers. An average FOB price of US$200/t, reflecting the Company’s advantageous geographic position, as well as the continued efforts to reduce ICL’s potash business cost per tonne, resulted in an operating profit of US$81 million in the potash stand-alone business.
The Specialty Solution division’s adjusted operating profit grew by 29% on 3% sales growth, driven by increased volumes, improved product mix and lower costs. This partially mitigated a 57% decrease in Essential Minerals’ adjusted operating profit, mainly due to lower fertilizers prices.
Read the article online at: https://www.worldfertilizer.com/potash/25112016/icl-reports-3q16-results/