UPDATE 1-ICL profits drop on weak fertiliser sales, to cut dividend
(Adds details, data, CEO comments, share reaction)
By Tova Cohen
TEL AVIV May 18 (Reuters) - Israel Chemicals (ICL) on Wednesday reported a 50 percent drop in first-quarter earnings due to a fall in fertiliser sales and said it would cut its dividend payout ratio because of weakness in agricultural markets.
"Our board has adjusted the company's dividend policy to strengthen ICL's financial position amid the volatile situation we are facing in the agricultural commodities market," Chief Executive Stefan Borgas said.
The company said prices of agricultural commodities fell during the first months of 2016, weighing heavily on farmers' decisions on how much fertiliser to buy.
Last month, the world's biggest fertiliser company producer by capacity Potash Corp cut its full-year 2016 profit forecast due to lower demand and weak prices.
ICL, which has exclusive permits in Israel to extract minerals from the Dead Sea, earned 7 cents per diluted share, excluding one-time items, in the first quarter, down from 15 cents a year earlier. Sales fell to $1.27 billion from $1.4 billion, mainly due to a drop in potash prices and sales volumes.
ICL, one of the three largest suppliers of crop nutrient potash to China, India and Europe, was forecast to make adjusted earnings of 9 cents on sales of $1.3 billion, according to Thomson Reuters I/B/E/S.
The sale of non-core businesses and the weaker euro and pound against the dollar also hit revenue. Continued...