company
I.C.L
-2.2%
Base:3,185
opening:3,185
High:3,217
low:3,104
change:98,090,650
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which is managed by Raviv Zoler (formerly KIL), unveils a strategic plan with the aim of almost doubling the company’s revenues. ACL wants to reach an annual income of 12.8 billion dollars in 2027, when for comparison last year it brought in 6.955 billion dollars. with an increase of 84% over 6 years (including the current year), when in practice it is a growth of 11% per year.
How does she expect to be able to handle it? The company wants to significantly increase the activity of special products – phosphate products such as for the clean food industry, as well as products based on bromine and phosphorus, such as flame retardants and energy storage and also the field of plant nutrition, for example in the production of fertilizers.
ACL sets a goal that the special products activities will reach an annual EBITDA of over 2 billion dollars by 2027, that is, an increase of more than 100% compared to 2021, with an average annual growth (CAGR) of 16%. The company wants to reach a total annual EBITDA of 3.6 billion dollars in 2027, which will be 28% of its revenues at that time, compared to 1.7 billion last year, which is 24% of revenues.
In the second quarter, commodity prices dropped dramatically, and this may have an impact on the company’s future reports, especially next year, and perhaps this is also the reason why ACL wants to invest more in the special products sector – to neutralize the effects and show growth nonetheless. ICL has a significant market share of 33% in the field of industrial products and 20% in the field of special phosphates, but in the field of plant nutrition it has only 13% of the market.
Raviv Zoler, President and CEO of ICL explained that the company expects an average price of $380 per ton of potash. These are of course high prices from a historical perspective. Is this price too high? It is possible. But Zoler sticks to the high price and predicts that according to CRU this is expected to be the price in years 2023-2024. He added that based on today’s potash prices, the EBITDA target would have been much higher and would have stood at $5.4 billion.
But it is important to act conservatively in this case. To understand the warning, let’s take the Israeli shipping company Zim as an example. She greatly benefited from the surge in transport prices. For several quarters the company repeated and fanatically adhered to the fact that the prices would remain high and they did not expect a decrease, but it was clear to everyone (probably also to the company itself) that the prices would not remain so high for long. Then the last quarter came and the prices were already much lower, which hurt the company’s results. And then she had to try and justify how she didn’t see what was obvious to everyone.
In any case, back to ICL, Zoller further stated that: “We met the goals from 2020 much earlier than expected, and we intend to build on this momentum to achieve global leadership in all three special product activities. We see significant opportunities ahead of us, as a result of the needs of our customers arising from from the global sustainability challenges, and believe that we are in a very good position to realize our updated sales growth and profitability increase plans.”
He added that the increase in forecasts comes following the acquisition of two selections in Brazil which, according to him, make the company a market leader in the country in the field of fertilizers and plant nutrition. According to him, following the company’s recovery plan, three branches have gone from loss to profit – the YPH project in the field of phosphate and special phosphates, as well as the mine in the UK that, instead of mining potash, switched to multi-mineral polysulfate fertilizer, as well as the magnesium plant that recorded losses for 20 years and is now making a profit.
We will remind you that ICL recently signed a memorandum of understanding for the supply of potash in Europe. Although the identity of the customer was not disclosed, it is believed to be the Norwegian capital. This is an activity of 300 thousand tons per year and given the price of potash, this is a transaction with a financial scope of approximately 220-240 million dollars. This deal came against the backdrop of the Russia-Ukraine war and the suspension of purchases from Russia and Belarus. Europe sanctions Russia and this may transfer customers to ICL.
ACL also intends to establish an infrastructure for energy storage in the US in the amount of 400 million dollars, and it is expected to receive a grant of almost 200 million dollars from the American government for the purpose of establishing a factory for the production of cathode material for LFP batteries.
in the results for the second quarter ICL reported record results in the second quarter. Sales totaled $2.88 billion in the quarter, a 78% increase compared to $1.62 billion in the same quarter last year. Operating profit amounted to $1.14 billion, a jump compared to an adjusted operating profit of $236 million in the corresponding quarter last year.
The adjusted net profit was 751 million dollars, the adjusted EBITDA amounted to 1.26 billion dollars, compared to 360 million dollars in the corresponding quarter last year.
The forecast for 2022: For the entire year, the company expects an adjusted EBITDA of 3.8 to 4 billion dollars compared to a previous forecast of 3.5 – 3.75 billion dollars. About 1.5 to 1.6 billion of which is expected to come from the company’s special products activity, compared to previous expectations of 1.3 to 1.4 billion dollars.
In the last year the ICL share has been a roller coaster. After last year the stock jumped by 89%, this year it managed to continue to jump by another 38% and then erase almost all the increase and fall from the record by 18% (on the way it fell up to 30% from the record but in the last month it is correcting upwards). The stock is now trading at a price of NIS 31.15 and a market value of NIS 40.15 billion.