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ICL provides updates on Chinese potash agreement and 2023 EBITDA guidance
−− Lower-than-expected contract price and delayed market recovery to impact annual EBITDA guidance
Jun. 26, 2023
ICL (Israel Chemicals Ltd.)
IsraelFollow
IsraelICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, announced an update to its 2022 to 2024 framework agreement with its customers in China. The company has agreed to supply those customers with an aggregate amount of 800,000 metric tons of potash during 2023, with mutual options for an additional 350,000 tons. The agreed upon price is $307 per ton, which aligns with recent contract settlements.
Due to the lower-than-anticipated potash price, ICL expects to see a negative impact to its 2023 EBITDA guidance of approximately $400 million. In addition, a recovery in demand for flame retardants, which was expected in the second half of the year, has not yet begun to materialize. If a recovery is delayed until the end of 2023, it could result in a further reduction of approximately $200 million in EBITDA guidance for the year. The company reiterated it is on track with regard to its five-year plan and does not expect these developments to have a material impact on its execution.
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