JERUSALEM, Aug 3 (Reuters) - Israel Chemicals (ICL) reported on Thursday a drop in second quarter net profit due to a decline in revenue stemming from lower potash prices and higher tax payments.
ICL, which produces about a third of the world’s bromine and is the sixth-largest potash producer, posted quarterly net income of $57 million, down from $120 million a year earlier, and below analysts’ average forecast of $90.8 million.
Hurt by a decline in selling prices and shipments of potash, mainly to Europe, revenue fell to $1.32 billion from $1.38 billion.
“We ... see stabilization in spot potash market prices, supported by the recent price increase for Chinese potash contracts, while the phosphate fertilizers market continues to be volatile with further market price reductions recorded during the quarter,” said acting CEO Asher Grinbaum.
ICL earlier this week said it signed several contracts to supply 925,000 metric tons of potash this year to customers in China at prices in line with recent contract prices in the country.
ICL said it paid an effective tax rate of about 43 percent in the quarter, higher than in previous years, since Israel recently raised taxes in the sector.
The company said it recorded a small provision to cover the short-term costs of a spill at its Rotem Amfert plant in Israel’s Negev desert.
A reservoir wall partially collapsed at the phosphate factory about a month ago, letting loose a torrent of highly acidic wastewater. ICL has been working with authorities to clean the spill and minimize environmental damage.
ICL, which has exclusive rights in Israel to mine minerals from the Dead Sea, declared a quarterly dividend of $32 million, or 2.5 cents per share. (Reporting by Ari Rabinovitch and Steven Scheer; Editing by Mark Potter)