ICL continues to deliver sequential growth, with sales of $1.8 billion, operating income of $211 million and adjusted EBITDA of $377 million in Q2 2024

ICL (NYSE: ICL) (TASE: ICL) , a leading global specialty minerals company, reported its financial results for the second quarter ended June 30, 2024. Consolidated sales were $1.75 billion versus $1.87 billion in the prior year. Operating income was $211 million, with adjusted operating income of $225 million, versus $300 million of operating income in the second quarter of last year. Adjusted EBITDA was $377 million versus $441 million. Diluted earnings per share were $0.09, with adjusted diluted EPS of $0.10, versus $0.13 in the second quarter of last year.

″ICL delivered sequentially improving EBITDA for the third consecutive quarter, as we continued to build momentum by focusing on the areas under our control, including the introduction of innovative solutions and continued cost efficiencies, while managing the risks associated with geopolitical uncertainties. All three of our specialties-driven segments were up versus the second quarter of 2023 and contributed to the sequential increase in adjusted EBITDA and margins,″ said Raviv Zoller, president and CEO of ICL. ″While we were ahead of our expectations in the first half of the year, we remain cautious regarding short-term expectations for some of the end markets we serve, including electronics, housing and construction, and food.″

The company raised its guidance for full year 2024 and now expects specialties-driven EBITDA of between $0.8 billion to $1.0 billion, an increase from previous guidance of $0.7 billion to $0.9 billion, without any change to expected potash sales volumes. (1a)

Key Financials

Second Quarter 2024

(1) Adjusted operating income and margin, adjusted net income attributable to shareholders, adjusted EBITDA and margin, and diluted adjusted earnings per share are non-GAAP financial measures. Please refer to the adjustments table and disclaimer.

(2) In the first half of 2024, the company’s adjusted EBITDA was positively impacted by an immaterial accounting reclassification. Please refer to the 6-K filing for additional details.

(3) Reclassified - see Note 2 to the company's interim financial statements.

Industrial Products

Second quarter 2024

• Sales of $315 million vs. $300 million.

• EBITDA of $74 million vs. $74 million.

• Third quarter of sequential improvement in EBITDA, with continued focus on cost savings and expanding customer relationships.

Key developments

• Flame retardants: Sales increased year-over-year, as higher volumes for brominated solutions were partially offset by lower prices overall, as demand from both the electronics and construction end-markets remained soft.

• Elemental bromine: Sales increased year-over-year, as higher volumes offset lower prices.

• Oil and gas: Clear brine fluid sales declined versus the prior year, due to inclement weather and a shift in oil rig schedules.

• Specialty minerals: Lower prices drove a year-over-year decrease in sales, despite higher volumes.

Potash

Second quarter 2024

• Sales of $422 million vs. $582 million.

• EBITDA of $118 million vs. $213 million.

• Grain Price Index decreased 15.2% year-over-year, with rice up 3.2%, while corn, soybeans and wheat were down 30.1%, 18.0% and 24.7%, respectively. On a sequential basis, the Grain Price Index increased 2.7%, with corn, wheat and rice up 4.5%, 5.3% and 1.7%, respectively, while soy declined 0.5%.

Key developments

• Potash price: $300 per ton (CIF).

  - Down 7% sequentially and 26% year-over-year.

• Potash sales volumes: 1,153 thousand metric tons.

  - Decreased by 108 thousand metric tons year-over-year.

• ICL Dead Sea

  - Stable cost per ton, despite lower production year-over-year

• ICL Iberia

  - Continued operational improvement, with record second quarter production.

• Metal Magnesium

  - Lower prices offset higher volumes, as market prices trended lower versus the prior year.

Phosphate Solutions

Second quarter 2024

• Sales of $572 million vs. $565 million.

• EBITDA of $146 million vs. $129 million.

• Second quarter of sequential improvement in sales, with EBITDA up 11% sequentially and 13% year-over-year. Pricing remained firm in the second quarter, however, changing supply dynamics are expected to influence future quarters.

Key developments

• White phosphoric acid: Sales declined year-over-year, as increased volumes – especially in Europe and Asia – were unable to offset lower prices globally.

• Industrial phosphates: Sales decreased, as improved volumes were offset by weaker pricing.

• Food phosphates: Sales decreased, as higher volumes were offset by lower market prices, which reflected reduced raw material input costs.

• Battery materials: Increased volumes in China, with U.S. customer innovation and qualification center (CIQC) expected to be completed by year-end.

• Commodity phosphates: Sequential sales improvement reflected an increase in volumes, which offset a decrease in prices.

• Competition remains elevated across all global markets, as increased availability pressured prices.

Growing Solutions

Second quarter 2024

• Sales of $494 million vs. $481 million.

• EBITDA of $45 million vs. $22 million.

• Year-over-year improvement in sales and EBITDA of 3% and more than 100%, respectively, with second quarter of sequential improvement in both sales and EBITDA.

Key developments

• Brazil: Sales declined, but a better mix of higher margin foliar sales drove improved profitability.

• Europe: Sales increased, with improved gross profit, as higher quantities and lower raw material costs offset lower prices.

• North America: Sales improved year-over-year on higher volumes.

• Asia: Sales in China increased, driven by volumes, and as additional production was brought online.

• Product trends: Specialty agriculture sales increased versus the prior year, as stronger volumes offset lower prices. Turf and ornamental markets returned to more stable pre-covid demand levels, with higher sales, volumes and gross profit year-over-year. The polysulphate market continued to be challenging, as lower prices impacted profitability.

Financial Items

Financing Expenses

Net financing expenses for the second quarter of 2024 were $33 million, down versus $49 million in the corresponding quarter of last year.

Tax Expenses

Reported tax expenses in the second quarter of 2024 were $48 million, reflecting an effective tax rate of 27%, compared to $84 million in the corresponding quarter of last year, reflecting an effective tax rate of 33%. The lower tax rate reflected a lower surplus profit, mainly due to a decrease in potash prices.

Available Liquidity

ICL’s available cash resources, which are comprised of cash and deposits, unutilized revolving credit facility, and unutilized securitization, totaled $1,652 million, as of June 30, 2024.

Outstanding Net Debt

As of June 30, 2024, ICL’s net financial liabilities amounted to $2,031 million, a decrease of $64 million compared to December 31, 2023.

Dividend Distribution

In connection with ICL’s second quarter 2024 results, the Board of Directors declared a dividend of 4.884 cents per share, or approximately $63 million, versus 6.321 cents per share, or approximately $81 million, in the second quarter of last year. The dividend will be payable on September 18, 2024, to shareholders of record as of September 4, 2024.