ICL Group (ICL) Q4 2017 earnings summary

Executive summary

• 2017 sales were $5,418 million, up 1% YoY; operating income recovered to $629 million from a $3 million loss, and net income attributable to shareholders was $364 million versus a $122 million loss.

• Adjusted operating income rose to $652 million from $582 million; adjusted net income attributable to shareholders fell to $389 million from $451 million.

Financial highlights

• Gross profit was $1,672 million versus $1,660 million; gross margin was 30.9% in both years.

• Other expenses declined to $90 million from $618 million, largely reflecting prior-year impairment and restructuring charges; 2017 included $41 million gain on the IDE sale.

• Net cash from operations was $847 million versus $966 million; investing cash outflow was $333 million versus $800 million, and financing cash outflow was $511 million versus $239 million.

• Cash capital expenditures were $457 million, down from $632 million; year-end cash and cash equivalents were $83 million versus $87 million.

Outlook and guidance

• Estimated annual effective tax rate for 2018 and beyond is ~30%.

• Potash cost-per-ton target: reduce average costs by ~10–15% within five years while maintaining ~5 million tonnes of production capability.

• Polysulphate production plan: ~600 thousand tonnes in 2018 and up to ~800 thousand tonnes in 2019; UK potash production is expected to cease in mid-2018.

• Specialty fertilizer sales target exceeds $1 billion within five years, with margin expansion; tens of millions of dollars may be invested in new technologies and solutions.