Israel Chem profit less than expected, potash sales hit record
JERUSALEM May 15 (Reuters) - Israel Chemicals (ICL) reported a bigger than expected fall in profit in the first quarter, hurt by a workers' strike and a one-time tax expense.
ICL, the world's sixth-largest potash producer, said on Thursday it earned an adjusted $189 million in the first three months of 2014, down from $305 million a year earlier.
Despite an increase in quantities sold, sales slipped 1 percent to $1.61 billion, largely due to reductions in selling prices in China and India.
ICL was forecast to have earned profit of $199 million on revenue of $1.49 billion, according to a Reuters poll of analysts.
The adjusted profit excluded a $58 million expense due to increased costs from a strike at a plant in Israel's Negev desert as well as a non-recurring tax expense as a result of ongoing assessment discussions in European subsidiaries.
ICL plans to eliminate 115 jobs at the Rotem Amfert plant to reduce costs and improve competitiveness of its phosphate operations. As a result of the strike, operating profit is expected to be impacted by $11 million in 2014 in addition to the $7 million recorded in the first quarter.
During the quarter, ICL said it sold a record 1.47 million tonnes of potash, up from 1.31 million a year earlier, citing a rise in quantities sold to China, Brazil and Europe.
It signed potash supply contracts with customers in China for the first half of 2014 at $305 per tonne, down $95 per tonne from last year. The price for Indian customers fell $105 a tonne over the past year, ICL noted.
ICL, which is preparing to dual-list its shares on the New York Stock Exchange, said it will pay a quarterly dividend of $91.5 million, or 7 cents a share. (Reporting by Steven Scheer)
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