Aug.16, 2012 | 5:07 AM–Israel Chemicals saw profit fall 4.5% in the second quarter from a year ago to $407.3 million, as higher financial costs and a bigger tax bite ate into earnings.
But the company, which mines minerals from the Dead Sea, said its revenue grew 1.9% to $1.96 billion while operating profit edged up 0.4% to $565 million. Revenue was boosted by higher fertilizer prices as well as increased output, which overcame the negative effect of a strong dollar, ICL said.
Despite the decline, net profit for the three months came in above a Thomson Reuters I/B/E/S estimate of $405.5 million. Furthermore, the company said it is expecting a revival of fertilizer sales to India, where importers delayed shipments in the second quarter due to poor farm conditions and a weakening rupee.
The company also sounded an optimistic note regarding 2013, citing drought conditions in the United States and similarly poor agricultural conditions in Russia and the Ukraine.
This has raised prices for corn and other crops, thus encouraging farmers in Brazil and other countries where conditions are better to increase the acreage they plant and spend more on fertilizer and other inputs.
“India remains a major source of uncertainty,” Gilad Alper, an analyst at Excellence Nessuah Securities, told the Reuters news agency. “The drought in the United States that is pushing the price of grain to record highs will eventually force India to sign on new, highly priced contracts.”…Read More>>