ICL Group (ICL) Q4 2021 earnings summary

Executive summary

• FY2021 sales rose 38% YoY to $6,955M; operating income was $1,210M versus $202M, and net income attributable to shareholders was $783M versus $11M.

• Adjusted operating income was $1,194M versus $509M; adjusted net income attributable to shareholders was $824M versus $258M.

Financial highlights

• Gross profit increased 75% to $2,611M; income before taxes was $1,092M versus $49M, and diluted EPS was $0.60 versus $0.01.

• Sales growth reflected higher realized potash and phosphate prices, stronger demand across several product lines, and $341M of contribution from the Brazil acquisitions.

• Higher sulphur, other raw-material, electricity and transport costs partially offset sales gains; marine transportation expense rose to $369M from $213M.

• Net finance expense declined to $122M from $158M; tax expense increased to $260M from $25M, with effective tax rates of 24% and 51%, respectively.

Outlook and guidance

• Spanish potash operations target an annual running rate of ~1M tons in H2 2022, with future capacity of up to ~1.3M tons after further surface-facility adjustments.

• Production at the new natural-gas-fired Rotem facility was expected to begin in 2022; Energean gas deliveries were delayed to Q3 2022, with interim supply arrangements and cost risks.

• Food-grade phosphoric acid output in China and battery-grade MAP sales for the LFP battery market were expected to increase in 2022.

• Environmental spending was estimated at ~$197M for 2022; the decarbonization roadmap targets a 30% reduction in Scope 1 and 2 emissions by 2030 versus 2018.