ICL reports third quarter 2024 results

ICL (NYSE: ICL) (TASE: ICL) , a leading global specialty minerals company, reported its financial results for the third quarter ended September 30, 2024. Consolidated sales were $1.75 billion versus $1.86 billion in the prior year. Operating income was $214 million, with adjusted operating income of $243 million, versus $227 million of operating income in the third quarter of last year. Adjusted EBITDA was $383 million versus $346 million. Diluted earnings per share were $0.09, with adjusted diluted EPS of $0.11, versus $0.11 in the third quarter of last year.

″ICL delivered another sequential increase in EBITDA, as well as versus the prior year, marking four consecutive quarters of improvement, despite lower potash prices. All three of our specialties-driven businesses showed significant year-over-year improvement in EBITDA, demonstrating the strength of our strategy and our ability to consistently deliver strong cash generation,″ said Raviv Zoller, president and CEO of ICL. ″While we are still facing some challenges related to geopolitical uncertainties, we remain focused on developing our innovative product portfolio pipeline and executing targeted cost and efficiency efforts.″

The company raised its guidance for full year 2024 and now expects specialties-driven EBITDA of between $0.95 billion to $1.05 billion, an increase from previous guidance of $0.8 billion to $1.0 billion. The company intends to limit its total 2024 annual potash sales volumes to 4.6 million metric tons, already committed, which is in-line with 2023 sales volumes and in expectation of improved conditions in 2025. 

Key Financials

Third 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 nine months 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.

Potash

Third quarter 2024

• Sales of $389 million vs. $526 million.

• EBITDA of $120 million vs. $164 million.

• Grain Price Index decreased 19.6% year-over-year, with corn, rice, soybeans and wheat down 27.2%, 4.3%, 26.4% and 29.0%, respectively. On a sequential basis, the Grain Price Index decreased 14.3%, with corn, rice, soybeans and wheat down 11.5%, 16.4%, 11.9% and 14.1%, respectively.

Key developments versus prior year

• Potash price: $297 per ton (CIF).

• Down 1% sequentially and 13% year-over-year.

• Potash sales volumes: 1,060 thousand metric tons.

• Decreased by 220 thousand metric tons year-over-year.

• ICL Dead Sea

• Production decreased, primarily due to external forces.

• ICL Iberia

• Record third quarter production, with continued operational and efficiency improvements.

• Metal Magnesium

• Both volumes and prices declined, as market prices continued to trend lower.

Phosphate Solutions

Third quarter 2024

• Sales of $577 million vs. $595 million.

• EBITDA of $140 million vs. $118 million.

• Third sequential quarter of sales growth, with EBITDA up nearly 20% year-over-year.

Key developments versus prior year

• White phosphoric acid: Sales decreased, as higher volumes in most regions were unable to offset lower prices in Europe, as well as in North and South America.

• Industrial phosphates: Sales increased, as higher volumes in all major regions offset lower prices related to decreasing cost inputs.

• Food phosphates: Despite higher volumes, sales decreased due to lower market prices, which reflected reduced raw material costs.

• Battery materials: China sales increased, as market demand expanded there. Elsewhere, the company continued to execute on its long-term battery materials strategy, with the U.S. customer innovation and qualification center (CIQC) on-track for completion by year-end. The business also expanded into South America, with the addition of a new customer.

• Commodity phosphates: Overall phosphate prices firmed in the third quarter, with tight stock positions in key markets, strategic allocation decisions and prevailing policies.

Growing Solutions

Third quarter 2024

• Sales of $538 million vs. $550 million.

• EBITDA of $64 million vs. $37 million.

• Third sequential quarter of sales and EBITDA growth, with EBITDA up more than 70% year-over-year.

Key developments versus prior year

• Brazil: Sales declined, due to exchange rate fluctuations, but higher prices and lower raw material costs drove an increase in gross profit.

• Europe: Sales decreased, but gross profit increased on higher volumes and lower raw material costs.

• North America: Sales increased, with higher volumes and slightly higher prices contributing to increased gross profit.

• Asia: Sales increased, and higher volumes, prices and product mix drove higher gross profit.

• Product trends: Specialty agriculture sales decreased, as exchange rate fluctuations, mainly in Brazil, and lower sales volumes in China offset higher prices. Turf and ornamental sales increased, with both turf and landscape and ornamental horticulture contributing.

Industrial Products

Third quarter 2024

• Sales of $309 million vs. $267 million.

• EBITDA of $65 million vs. $42 million.

• Year-over-year growth driven by market share gains in flame retardants.

Key developments versus prior year

• Flame retardants: Sales increased, as higher volumes for both brominated- and phosphorous-based solutions offset lower prices overall, while demand from both the electronics and construction end-markets remained soft.

• Elemental bromine: Higher volumes drove an increase in sales, offsetting lower prices.

• Clear brine fluids: Sales declined, despite strength in the Gulf of Mexico, as oil and gas demand in the Eastern Hemisphere was lower, due to the normal pattern of the drilling operations cycle.

• Specialty minerals: Increased sales were driven by higher volumes for industrial applications, while prices were lower.

Financial Items

Financing Expenses

Net financing expenses for the third quarter of 2024 were $39 million, down versus $42 million in the corresponding quarter of last year.

Tax Expenses

Reported tax expenses in the third quarter of 2024 were $49 million, reflecting an effective tax rate of 28%, compared to $43 million in the corresponding quarter of last year, reflecting an effective tax rate of 23%. The lower tax rate in the third quarter of last year was mainly due to the devaluation of the shekel versus the U.S. dollar.

Available Liquidity

ICL’s available cash resources, which are comprised of cash and deposits, unutilized revolving credit facility, and unutilized securitization, totaled $1,749 million, as of September 30, 2024.

Outstanding Net Debt

As of September 30, 2024, ICL’s net financial liabilities amounted to $1,948 million, a decrease of $147 million compared to December 31, 2023.

Dividend Distribution

In connection with ICL’s third quarter 2024 results, the Board of Directors declared a dividend of 5.27 cents per share, or approximately $68 million, versus 5.31 cents per share, or approximately $68 million, in the third quarter of last year. The dividend will be payable on December 18, 2024, to shareholders of record as of December 4, 2024.