May 13, 2015 / 2:18 PM / in 3 years

UPDATE 1-Israel Chemicals optimistic govt will ease tax plan

* First-quarter adjusted net profit $193 mln

* Average analyst forecast was for $144 mln net profit

* First-quarter revenue down 13 pct to $1.4 bln

* Workers strike weighs on sales

* CEO says has met with Finance Ministry over tax hike plan (Recasts, adds details, CEO comments, share reaction)

By Steven Scheer

JERUSALEM, May 13 (Reuters) - Israel Chemicals (ICL) said on Wednesday it was optimistic the country’s incoming government might water down a plan to impose stiff taxes on mining firms.

The plan, drafted before March elections and which still needs parliamentary approval, would levy a progressive tax of 25 percent after miners reach an annual return on investment of 14 percent, rising to 42 percent for returns over 20 percent.

ICL Chief Executive Stefan Borgas said he met Finance Ministry officials this month, but not incoming Finance Minister Moshe Kahlon, and there was a new political willingness to work out a deal beneficial to both sides.

“This could be the starting point to a much more constructive dialogue,” Borgas told reporters after the company released first-quarter results.

“Emotions are down a little bit and we are talking about facts. Israel Chemicals has a big interest to build and strengthen in Israel.”

ICL, which has exclusive permits to extract minerals from the Dead Sea, has halted or put under review nearly $2 billion in investment in Israel because of the plans.

At the same time, ICL is expanding outside Israel in China, Britain and Spain. Borgas also said ICL was seeking to accelerate development of an Ethiopian mine through an offer to buy Canada’s Allana Potash.

ICL, one of the three largest suppliers of crop nutrient potash to China, India and Europe, has been hit by a strike at two of its Dead Sea plants over plans to implement an efficiency plan that includes 280 job cuts.

Its bromine unit has been closed since workers walked out in February. Employees at a potash plant joined the strike later.

Although the strike weighed on first-quarter results, ICL posted a higher net profit thanks to the sale of non-core businesses. It earned $193 million excluding one-time items up from $189 million a year earlier and above an average forecast of $144 million in Reuters poll.

Sales fell 13 percent to $1.4 billion, roughly in line with forecasts.

Borgas said ICL would recover most of its delayed potash sales when the strike ends, most likely in the second half. He said it was “manageable” since cash flow from other operations was high and it was not hurting potash supplies to China.

ICL said it would pay a first-quarter dividend of $151 million. Its New York-listed shares rose 2.3 percent to $7.06 in early trading. (Editing by David Clarke)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below