February 11, 2015 / 2:38 PM / in 3 years

UPDATE 1-Israel Chem says 2014 was bottom year, 2015 to be better

* Q4 adjusted net profit $108 mln vs $149.3 mln forecast

* Sales of $1.4 bln in line with estimates

* ICL lost some potash market share due to strike -CEO

* Shares down 4 pct in Tel Aviv (Releads with CEO comments, adds analyst's comments)

By Tova Cohen

TEL AVIV, Feb 11 (Reuters) - After a year of restructuring and cost reductions that hurt the company's bottom line, fertiliser and speciality chemical maker Israel Chemicals (ICL) expects improvement in 2015.

ICL reported on Wednesday a lower fourth quarter profit that missed estimates, weighed down by increased financial expenses, a higher tax rate and labour disruptions.

"2014 was a clean-up year," Chief Executive Stefan Borgas told a conference call, pointing to steps taken in the wake of a government plan to raise taxes on mining activities and cost-cutting measures.

ICL has faced several strikes as a result, with one underway at its bromine plants due to plans to lay off 140 workers .

When asked whether ICL would return to growth in 2015, Borgas said: "In principle the answer is yes, it all depends on the details."

ICL would benefit if energy prices remained low but much depended on currency fluctuations, which were volatile in 2014.

"Hopefully, 2014 was the bottom," Borgas added.

ICL, which has exclusive permits to extract minerals from the Dead Sea, is one of the three largest suppliers of the crop nutrient potash to China, India and Europe.

It plans to expand abroad as the investment environment in Israel deteriorates in the wake of the government tax plan. ICL has cancelled planned investment of about $750 million in Israel and is re-evaluating investments of another $1 billion.

A strike at the company's Dead Sea operations in the fourth quarter led to a "little bit" of potash market share loss, Borgas said, adding: "Hopefully this will come back to normal; we have a strong franchise in the market."

ICL earned an adjusted $108 million in the fourth quarter, down from $195 million a year earlier. Sales slipped 1 percent to $1.4 billion due to exchange rate changes totalling $45 million and a decline in quantities sold partly offset by an increase in selling prices.

Labour interruptions at its Dead Sea operations lowered sales by $60 million in the quarter while cost-cutting measures saved $100 million in 2014.

ICL was forecast to earn $149.3 million on revenue of $1.4 billion, according to a Reuters poll of analysts.

Shares in ICL, a subsidiary of Israel Corp, were down 4 percent in late Tel Aviv trade.

Amir Adar, an analyst at brokerage Meitav Dash, said labour-management relations have been deteriorating in the past year and must improve in order for ICL to realise its potential in 2015. (Editing by Steven Scheer)

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