UPDATE 1-ICL eyes dividends, new listing to ride out potash shake-up

Wed Aug 7, 2013 3:56am EDT
 
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JERUSALEM Aug 7 (Reuters) - Israel Chemicals promised dividend payouts and a programme of share buybacks as it reported a 23 percent drop in quarterly net profit on Wednesday and braced itself for more fallout from a sea change on world potash markets.

Chairman Nir Gilad for the first time said the world's sixth-largest producer of the key crop nutrient also intends to list its shares on an international stock exchange and would target regular distribution of dividends of up to 70 percent of net income.

ICL's shares fell more than 20 percent, erasing some 10 billion shekels ($2.8 billion) from its market value, following Uralkali's departure from one of the world's two big potash cartels last month.

Company shares rose 1.9 percent in early trade in Tel Aviv on Wednesday.

Its results in the second quarter were hurt by a fall in prices of potash and reduced sales in China, pushing down earnings to $316 million from $408 million a year earlier and expectations of $323 million. Revenue slipped to $1.77 billion from $1.91 billion.

ICL said Uralkali's decision raised the risk of lower prices in the short run.

"But in the long term, higher demand would bring higher prices," it said.

The company also said share repurchases or a one-time dividend of up to $500 million were under review. It declared a dividend of $221 million, or 17.4 cents per share, for the second quarter, up from 16.7 cents a share in the first quarter.

ICL said the dividend plans were part of a strategic plan approved by the board which also aimed at achieving profits that exceed the market average and boosting revenues by a few hundred million dollars a year by 2016.