1.
|
Q2 2021 Results
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
||||||
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
Sales
|
1,617
|
-
|
1,203
|
-
|
3,127
|
-
|
2,522
|
-
|
5,043
|
-
|
Gross profit
|
570
|
35
|
320
|
27
|
1,065
|
34
|
720
|
29
|
1,490
|
30
|
Operating income (loss)
|
243
|
15
|
(169)
|
-
|
428
|
14
|
(37)
|
-
|
202
|
4
|
Adjusted operating income (1)
|
236
|
15
|
128
|
11
|
421
|
13
|
260
|
10
|
509
|
10
|
Net income (loss) - shareholders of the Company
|
140
|
9
|
(168)
|
-
|
275
|
9
|
(108)
|
-
|
11
|
-
|
Adjusted net income - shareholders of the Company (1)
|
135
|
8
|
72
|
6
|
270
|
9
|
132
|
5
|
258
|
5
|
Diluted earnings (loss) per share (in dollars)
|
0.11
|
-
|
(0.13)
|
-
|
0.22
|
-
|
(0.08)
|
-
|
0.01
|
-
|
Diluted adjusted earnings per share (in dollars) (2)
|
0.11
|
-
|
0.06
|
-
|
0.21
|
-
|
0.10
|
-
|
0.20
|
-
|
Adjusted EBITDA (2)
|
351
|
22
|
246
|
20
|
646
|
21
|
496
|
20
|
990
|
20
|
Cash flows from operating activities
|
242
|
-
|
177
|
-
|
448
|
-
|
343
|
-
|
804
|
-
|
Purchases of property, plant and equipment and intangible assets (3)
|
151
|
-
|
161
|
-
|
298
|
-
|
300
|
-
|
626
|
-
|
(1) |
See “Adjustments to Reported Operating and Net income (non-GAAP)” below.
|
(2) |
See “Adjusted EBITDA and Diluted Adjusted Earnings Per Share for the periods of activity" below.
|
(3) |
See “Condensed consolidated statements of cash flows (unaudited)” to the accompanying financial statements.
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Operating income (loss)
|
243
|
(169)
|
428
|
(37)
|
202
|
Impairment and disposal of assets, provision for closure and restoration costs (1)
|
1
|
219
|
1
|
219
|
229
|
Judicial proceedings (2)
|
(8)
|
-
|
(8)
|
-
|
-
|
Provision for early retirement (3)
|
-
|
78
|
-
|
78
|
78
|
Total adjustments to operating income (loss)
|
(7)
|
297
|
(7)
|
297
|
307
|
Adjusted operating income
|
236
|
128
|
421
|
260
|
509
|
Net income (loss) attributable to the shareholders of the Company
|
140
|
(168)
|
275
|
(108)
|
11
|
Total adjustments to operating income (loss)
|
(7)
|
297
|
(7)
|
297
|
307
|
Total tax impact of the above operating income (loss)
|
2
|
(57)
|
2
|
(57)
|
(60)
|
Total adjusted net income - shareholders of the Company
|
135
|
72
|
270
|
132
|
258
|
(1) |
For 2021, reflects a disposal of an initial investment that will not materialize in Spain and an increase in restoration costs related to Rotem
Amfert Israel, which was offset by a reversal of impairment in Rotem Amfert Israel due to the strengthening of phosphate prices.
For 2020, reflects an impairment and write-off of certain assets in Rotem Amfert Israel, following low phosphate prices and the
discontinuation of the unprofitable production and sale of phosphate rock activity, which also led to an increase in the provision for asset retirement obligation (ARO) and in facility restoration costs. Also reflects an impairment of
assets and an increase in closure costs as a result of the closure of the Sallent site (Vilafruns) in Spain.
|
(2) |
For 2021, reflects a reversal of VAT provision following a court ruling in Brazil, less reimbursement of arbitration costs pursuant to the
tribunal's decision in Europe regarding the investment in the Ethiopian potash project. For further information, see "Legal Proceedings" below.
|
(3) |
For 2020, this reflects an increase in the provision following implementation of an efficiency plan, primarily through an early retirement plan,
at Israeli production facilities (Rotem Amfert Israel, Bromine Compounds and Dead Sea Magnesium).
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Net income (loss) attributable to the shareholders of the Company
|
140
|
(168)
|
275
|
(108)
|
11
|
Financing expenses, net
|
30
|
31
|
50
|
83
|
158
|
Provision for income taxes
|
64
|
(33)
|
87
|
(13)
|
25
|
Minority and equity income, net (1)
|
9
|
1
|
16
|
1
|
8
|
Operating income (loss)
|
243
|
(169)
|
428
|
(37)
|
202
|
Minority and equity income, net (2)
|
(9)
|
(1)
|
(16)
|
(1)
|
(8)
|
Depreciation and amortization
|
124
|
119
|
241
|
237
|
489
|
Adjustments (3)
|
(7)
|
297
|
(7)
|
297
|
307
|
Total adjusted EBITDA
|
351
|
246
|
646
|
496
|
990
|
(1) |
Calculated by deducting the share in earnings of equity-accounted investees and adding the net income attributable to non-controlling interests.
|
(2) |
Calculated by adding the share in earnings of equity-accounted investees and deducting the net income attributable to non-controlling interests.
|
(3) |
See "Adjustments to Reported Operating and Net income (non-GAAP)" above.
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Net income (loss) attributable to the shareholders of the Company
|
140
|
(168)
|
275
|
(108)
|
11
|
Adjustments (1)
|
(7)
|
297
|
(7)
|
297
|
307
|
Total tax impact of the above Operating Income & Finance expenses adjustments
|
2
|
(57)
|
2
|
(57)
|
(60)
|
Adjusted net income - shareholders of the Company
|
135
|
72
|
270
|
132
|
258
|
Weighted-average number of diluted ordinary shares outstanding (in thousands)
|
1,285,658
|
1,280,721
|
1,284,873
|
1,280,175
|
1,280,273
|
Diluted adjusted earnings per share (in dollars) (2)
|
0.11
|
0.06
|
0.21
|
0.10
|
0.20
|
(1) |
See "Adjustments to Reported Operating and Net income (non-GAAP)" above.
|
(2) |
The diluted adjusted earnings per share is calculated as follows: dividing the adjusted net income‑shareholders of the Company by the weighted-average number of diluted ordinary shares outstanding (in thousands).
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
Q2 2020 figures
|
1,203
|
(1,372)
|
(169)
|
|
Total adjustments Q2 2020*
|
-
|
297
|
297
|
|
Adjusted Q2 2020 figures
|
1,203
|
(1,075)
|
128
|
|
Quantity
|
177
|
(135)
|
42
|
|
Price
|
175
|
-
|
175
|
|
Exchange rates
|
62
|
(75)
|
(13)
|
|
Raw materials
|
-
|
(49)
|
(49)
|
|
Energy
|
-
|
(6)
|
(6)
|
|
Transportation
|
-
|
(30)
|
(30)
|
|
Operating and other expenses
|
-
|
(11)
|
(11)
|
|
Adjusted Q2 2021 figures
|
1,617
|
(1,381)
|
236
|
|
Total adjustments Q2 2021*
|
-
|
7
|
7
|
|
Q2 2021 figures
|
1,617
|
(1,374)
|
243
|
- |
Quantity – The positive impact on operating income was primarily related to higher sales volumes of bromine-based and phosphorus-based flame retardants, and is also attributed to increased sales volumes of
bromine-based industrial solutions, mainly clear brine fluids, as well as acids, phosphate fertilizers and phosphate-based food additives and salts. This was partly offset by a decrease in sales volumes of potash.
|
- |
Price – The positive impact on operating income was primarily related to an increase in the selling prices of phosphate fertilizers, a $55 increase in the average realized price per tonne of potash, a record level of elemental bromine prices in China
and higher selling prices of bromine- and phosphorus-based flame retardants.
|
- |
Exchange rates – The unfavorable impact on operating income was primarily related to the appreciation of the average exchange rate of
the Israeli shekel and the British pound against the dollar, which increased operational costs. This trend was partly offset by the appreciation of the average exchange rate of the euro and the Chinese yuan against the dollar, which led
to a positive effect on the operating income.
|
- |
Raw materials – The negative impact of raw material prices on operating income was primarily related to higher prices of sulphur
consumed during the quarter and higher prices of raw materials used in the production of bromine- and phosphorus-based flame retardants.
|
- |
Energy - The negative impact on operating income was primarily related to an increase in electricity prices.
|
- |
Transportation – The negative impact on operating income was primarily related to higher marine transportation costs.
|
- |
Operating and other expenses - The negative impact on operating income was primarily related to decreased production of potash and
higher royalties paid, mainly as a result of higher selling prices. This trend was partially offset by a positive operational impact due to increased production at Rotem Amfert Israel and at YPH joint venture, as well as the efficiency
plan for Rotem Amfert Israel, implemented in 2020.
|
4-6/2021
|
4-6/2020
|
|||
$ millions
|
% of Sales
|
$ millions
|
% of Sales
|
Europe
|
519
|
32
|
416
|
35
|
Asia
|
462
|
29
|
355
|
30
|
North America
|
271
|
17
|
188
|
16
|
South America
|
262
|
16
|
136
|
11
|
Rest of the world
|
103
|
6
|
108
|
8
|
Total
|
1,617
|
100
|
1,203
|
100
|
- |
Europe – The increase in sales primarily related to an increase in sales volumes of Innovative Ag Solutions segment products, bromine-
and phosphorus-based flame retardants, an increase in the selling prices of phosphate fertilizers, together with the positive impact of the appreciation of the average exchange rate of the euro against the dollar. The increase was
partly offset by a decrease in sales volumes of phosphate fertilizers.
|
- |
Asia – The increase in sales primarily related to an increase in sales volumes and selling prices of phosphate fertilizers, acids and
bromine‑based flame retardants, an increase in the selling price of potash, together with the positive impact of the appreciation of the average exchange rate of the Chinese yuan against the dollar. The increase was partly offset by a
decrease in sales volumes of potash.
|
- |
North America – The increase in sales primarily related to an increase in sales volumes and selling prices of phosphate fertilizers, potash and phosphorus-based flame retardants, as well as higher sales volumes of phosphate-based food additives.
|
- |
South America – The increase in sales primarily related to an increase in sales volumes and selling prices of phosphate fertilizers and
potash, as well as higher sales volumes of acids, clear brine fluids and specialty agriculture products, which include sales from our recently acquired Fertiláqua business.
|
- |
Rest of the world – The decrease in sales primarily related to a decrease in sales volumes of dairy proteins.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
YTD 2020 figures
|
2,522
|
(2,559)
|
(37)
|
|
Total adjustments YTD 2020*
|
-
|
297
|
297
|
|
Adjusted YTD 2020 figures
|
2,522
|
(2,262)
|
260
|
|
Quantity
|
245
|
(192)
|
53
|
|
Price
|
236
|
-
|
236
|
|
Exchange rates
|
124
|
(142)
|
(18)
|
|
Raw materials
|
-
|
(62)
|
(62)
|
|
Energy
|
-
|
(3)
|
(3)
|
|
Transportation
|
-
|
(44)
|
(44)
|
|
Operating and other expenses
|
-
|
(1)
|
(1)
|
|
Adjusted YTD 2021 figures
|
3,127
|
(2,706)
|
421
|
|
Total adjustments YTD 2021*
|
-
|
7
|
7
|
|
YTD 2021 figures
|
3,127
|
(2,699)
|
428
|
- |
Quantity – The positive impact on operating income was primarily related to an increase in sales volumes of bromine- and phosphorus-based
flame retardants, bromine-based industrial solutions, as well as Innovative Ag Solutions products, acids, phosphate fertilizers and phosphate-based food additives.
|
- |
Price – The positive impact on operating income was primarily related to an increase in the selling prices of phosphate fertilizers, a
$32 increase in the average realized price per tonne of potash, a record level of elemental bromine prices in China and higher selling prices of bromine- and phosphorus-based flame retardants.
|
- |
Exchange rates – The unfavorable impact on operating income was primarily related to the appreciation of the average exchange rate of the
Israeli shekel and the British pound against the dollar, which increased operational costs more than it contributed to revenue. This trend was partly offset by the appreciation of the average exchange rate of the euro and the Chinese yuan
against the dollar, which led to a positive effect on operating income.
|
- |
Raw materials – The negative impact of raw material prices on operating income was primarily related to higher prices of sulphur consumed
during the period and an increase in prices of raw materials used in the production of bromine- and phosphorus-based flame retardants.
|
- |
Transportation – The negative impact on operating income was primarily related to higher marine transportation costs.
|
- |
Operating and other expenses – The negative impact on operating income was primarily related to decreased production of potash and higher
royalties paid, mainly as a result of higher selling prices. This trend was partly offset by positive operational impact due to increased production at Rotem Amfert Israel and at YPH joint venture, as well as the efficiency plan for Rotem
Amfert Israel, implemented in 2020.
|
1-6/2021
|
1-6/2020
|
|||
$ millions
|
% of Sales
|
$ millions
|
% of Sales
|
Europe
|
1,147
|
37
|
976
|
39
|
Asia
|
846
|
27
|
663
|
26
|
North America
|
566
|
18
|
437
|
17
|
South America
|
371
|
12
|
248
|
10
|
Rest of the world
|
197
|
6
|
198
|
8
|
Total
|
3,127
|
100
|
2,522
|
100
|
- |
Europe – The increase in sales primarily related to an increase in sales volumes and selling prices of bromine- and phosphorus-based
flame retardants, an increase in sales volumes of Innovative Ag Solutions segment products and acids, an increase in the selling prices of phosphate fertilizers, together with the positive impact of the appreciation of the average
exchange rate of the euro against the dollar. The increase was partly offset by a decrease in sales volumes of phosphate fertilizers and green phosphoric acid.
|
- |
Asia – The increase in sales primarily related to an increase in sales volumes and selling prices of phosphate fertilizers, acids, and
bromine-based flame retardants, an increase in the selling prices of potash, together with the positive impact of the appreciation of the average exchange rate of the Chinese yuan against the dollar. The increase was partly offset by a
decrease in sales volumes of potash.
|
- |
North America – The increase in sales primarily related to an increase in sales volumes and selling prices of phosphate fertilizers and
potash, as well as higher sales volumes of phosphate-based food additives and phosphorus‑based flame retardants. The increase was partly offset by a decrease in sales volumes of clear brine fluids.
|
- |
South America – The increase in sales primarily related to an increase in sales volumes and selling prices of phosphate fertilizers and
potash, as well as higher sales volumes of acids, clear brine fluids and specialty agriculture products, which include sales from our recently acquired Fertiláqua business.
|
- |
Rest of the world – The decrease in sales primarily related to a decrease in sales volumes of dairy proteins.
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Segment Sales
|
410
|
285
|
808
|
649
|
1,255
|
Sales to external customers
|
406
|
281
|
800
|
642
|
1,242
|
Sales to internal customers
|
4
|
4
|
8
|
7
|
13
|
Segment Profit
|
114
|
70
|
219
|
173
|
303
|
Depreciation and amortization
|
14
|
18
|
31
|
35
|
77
|
Capital expenditures
|
14
|
24
|
31
|
45
|
84
|
• |
All-time record quarterly sales and operating income driven by strong demand for the segment’s products, mostly flame retardants for various
applications and markets, despite raw material availability and marine transportation constraints.
|
• |
Sales of elemental bromine increased year-over-year, mainly due to higher selling prices in China. Market prices for elemental bromine in China
continued their upward trend, reaching a record level during the second quarter of 2021, due to higher demand and limited local supply in light of the local authorities' strict policy regarding environmental aspects.
|
• |
Sales of bromine-based flame retardants increased year-over-year, due to higher demand in most market segments, which was supported by the
segment’s production capacity expansions and several new long-term strategic agreements.
|
• |
The continued recovery of oil prices during the second quarter of 2021, led to renewal of drilling activities in several areas and higher
year-over-year demand for clear brine fluids. However, overall demand for clear brine fluids remains under pressure and has not returned to pre-COVID levels.
|
• |
Phosphorus-based flame retardants’ sales increased year-over-year due to strong demand in light of the supply constraints from Chinese
producers, due to local environmental regulatory restrictions and global shipping challenges.
|
• |
Most of the segment’s magnesia and calcium product lines are sold out due to strong demand in the supplements and pharmaceuticals markets. Sales
of Dead Sea salts increased year-over-year, with strong demand from the oil drilling and animal feed markets.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
Q2 2020 figures
|
285
|
(215)
|
70
|
|
Quantity
|
90
|
(49)
|
41
|
|
Price
|
27
|
-
|
27
|
|
Exchange rates
|
8
|
(9)
|
(1)
|
|
Raw materials
|
-
|
(17)
|
(17)
|
|
Energy
|
-
|
1
|
1
|
|
Transportation
|
-
|
(4)
|
(4)
|
|
Operating and other expenses
|
-
|
(3)
|
(3)
|
|
Q2 2021 figures
|
410
|
(296)
|
114
|
- |
Quantity – The positive impact on the segment’s operating income was primarily related to an increase in sales volumes of bromine- and
phosphorus-based flame retardants, as well as bromine-based industrial solutions, mainly clear brine fluids. This trend was driven by higher demand in most end-markets and expanded production capacity supported by the operation of the new
TBBA plant at Neot Hovav.
|
- |
Price – The positive impact on the segment’s operating income was primarily related to a record level of elemental bromine prices in
China and higher selling prices of bromine- and phosphorus-based flame retardants.
|
- |
Exchange rates – The unfavorable impact on the segment’s operating income was primarily related to the appreciation of the average
exchange rate of the Israeli shekel against the dollar, which increased operational costs. This trend was partly offset by the appreciation of the average exchange rate of the euro against the dollar, which led to a positive effect on the
operating income.
|
- |
Raw materials – The negative impact on the segment’s operating income was primarily related to an increase in prices of raw materials
used in the production of bromine- and phosphorus-based flame retardants.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
YTD 2020 figures
|
649
|
(476)
|
173
|
|
Quantity
|
110
|
(65)
|
45
|
|
Price
|
34
|
-
|
34
|
|
Exchange rates
|
15
|
(17)
|
(2)
|
|
Raw materials
|
-
|
(20)
|
(20)
|
|
Energy
|
-
|
1
|
1
|
|
Transportation
|
-
|
(6)
|
(6)
|
|
Operating and other expenses
|
-
|
(6)
|
(6)
|
|
YTD 2021 figures
|
808
|
(589)
|
219
|
- |
Quantity – The positive impact on the segment’s operating income was primarily related to an increase in sales volumes of bromine- and
phosphorus-based flame retardants. This trend was mainly driven by strong demand in most end-markets supported by expanded production of the new TBBA plant at Neot Hovav.
|
- |
Price – The positive impact on the segment’s operating income was primarily related to a record level of elemental bromine prices in
China and higher selling prices of bromine- and phosphorus-based flame retardants, as well as specialty minerals products.
|
- |
Exchange rates – The unfavorable impact on the segment’s operating income was primarily related to the appreciation of the average
exchange rate of the Israeli shekel against the dollar, which increased operational costs. This trend was partly offset by the appreciation of the average exchange rate of the euro against the dollar, which led to a positive effect on the
operating income.
|
- |
Raw materials – The negative impact on the segment’s operating income was primarily related to higher prices of raw materials used in the
production of bromine- and phosphorus-based flame retardants.
|
- |
Transportation - The negative impact on the segment’s operating income was
primarily related to higher marine transportation prices.
|
- |
Operating and other expenses – The negative impact on the segment’s operating income was primarily related to higher royalties and sales
commissions paid, as a result of higher revenue.
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Segment Sales
|
412
|
340
|
797
|
654
|
1,346
|
Potash sales to external customers
|
296
|
253
|
550
|
479
|
979
|
Potash sales to internal customers
|
27
|
24
|
49
|
47
|
95
|
Other and eliminations(1)
|
89
|
63
|
198
|
128
|
272
|
Gross Profit
|
154
|
123
|
292
|
219
|
472
|
Segment Profit
|
43
|
38
|
72
|
52
|
120
|
Depreciation and amortization
|
42
|
42
|
79
|
81
|
166
|
Capital expenditures
|
72
|
55
|
137
|
116
|
296
|
Average realized price (in $) (2)
|
281
|
226
|
269
|
237
|
230
|
(1) |
Primarily includes salt produced in underground mines in the UK and Spain, Polysulphate® and Polysulphate®-based products, magnesium-based
products and sales of excess electricity produced by ICL’s power plants in Israel.
|
(2) |
Potash average realized price (dollar per tonne) is calculated by dividing total potash revenue by total sales quantities. The difference
between Free On Board (FOB) price and average realized price is primarily due to marine transportation costs.
|
• |
Grain Price Index increased year-over-year, mainly due to an increase in prices of corn, soybean and wheat by 100.9%, 53.8% and 42.5%,
respectively. The increase in grain prices is mainly a result of strong global demand.
|
• |
The July 2021 WASDE (World Agricultural Supply and Demand
Estimates) report published by the USDA further supports the above-mentioned increase in grain prices, while showing a decrease in the expected ratio of global inventories of grain to annual consumption, to 27.8% for the 2021/22
agriculture year, compared to 28.2% for the 2020/21 agriculture year, and 30.4% for the 2019/20 agriculture year.
|
• |
Increase in grain prices, especially of corn and soybeans, supported higher potash prices during the quarter, especially in the U.S and Brazil.
For additional information on potash prices and imports in key markets, see ‘Global potash market - average prices and imports’ table below.
|
• |
ICL's average potash realized price per tonne of $281 was 9% higher compared to the first quarter of 2021 and 24% higher year-over-year.
|
• |
In April 2021, ICL signed a contract with Indian Potash Limited (IPL), India’s largest importer of potash, to supply an aggregate 600,000 metric
tonnes of potash, with mutual options for additional 50,000 metric tonnes, to be supplied through December 2021, at a selling price of $280 per tonne CIFFO (Cost Insurance and Freight Free Out) at the destination port. This price reflects
a $50 per tonne increase on the previous contract price. As at the date of this report, the Company has not yet signed a supply contract for 2021 with its customers in China.
|
• |
ICL Dead Sea’s annual shutdown for facility maintenance was successfully completed in April 2021.
|
• |
The Company has successfully completed the excavation of the ramp connecting the Cabanasses mine with the Suria plant and is now operational and
ramping up to capacity. Completion of the infrastructure works, including the installation of conveyor belts, was followed by a site shutdown of about three weeks, which started in the last week of the first quarter and ended at the
beginning of the second quarter.
|
• |
On April 30, 2021, Nobian filed a claim with the Spanish Court for full enforcement of the arbitration award according to its understanding
thereof, emphasizing several matters, including investing reasonable commercial efforts to complete the construction of the salt production facility. The Company believes that it is in compliance with the arbitration award, including in
the said matters. This is further demonstrated by the Company declaring completion of the salt production facility on July 13, 2021. Despite Nobian's objection against the Company's announcement, the Company is in the opinion that all the
necessary requirements for completion have been fulfilled. The Company believes that the challenges Nobian poses, despite the Company's compliance with the arbitration award, provides the Company with further rights under its agreement
with Nobian, including a right to terminate the partnership agreement. For further information, see Note 6 to the Company’s Interim Financial Statements.
|
• |
As part of the collaboration between ICL's subsidiary in Spain (ICL Iberia) and the government of Catalonia to achieve environmental
sustainability goals, the Company has undertaken to carry out restoration of the salt piles in its sites, mainly by processing the material and removing it to the sea via a Collector. In April 2021, the Company signed an agreement with
the Catalan Water Agency for the construction and operation of the Collector. For further information, see Note 6 to the Company’s Interim Financial Statements.
|
• |
Production of Polysulphate® went up by 5% year-over-year to approximately 193 thousand tonnes in the second quarter of 2021, while sales volume
significantly increased by 40% year-over-year, to approximately 183 thousand tonnes.
|
Average prices
|
4-6/2021
|
4-6/2020
|
VS Q2 2020
|
1-3/2021
|
VS Q1 2021
|
Granular potash – Brazil
|
CFR spot
($ per tonne)
|
383
|
222
|
72.5%
|
283
|
35.3%
|
Granular potash – Northwest Europe
|
CIF spot/contract
(€ per tonne)
|
256
|
245
|
4.5%
|
235
|
8.9%
|
Standard potash – Southeast Asia
|
CFR spot
($ per tonne)
|
281
|
243
|
15.6%
|
248
|
13.3%
|
Potash imports
|
||||||
To Brazil
|
million tonnes
|
3
|
3.1
|
(3.2)%
|
2.2
|
36.4%
|
To China
|
million tonnes
|
2
|
1.7
|
17.6%
|
2.6
|
(23.1)%
|
To India
|
million tonnes
|
0.59
|
0.9
|
(34.4)%
|
0.75
|
(21.3)%
|
Thousands of tonnes
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
Production
|
1,022
|
1,110
|
2,174
|
2,255
|
4,527
|
Total sales (including internal sales)
|
1,148
|
1,226
|
2,223
|
2,222
|
4,666
|
Closing inventory
|
226
|
448
|
226
|
448
|
275
|
- |
Production – Production in the second quarter of 2021 was lower by 88 thousand tonnes year‑over‑year, due to a week-long annual
maintenance shutdown at ICL Dead Sea's facilities, the two-week shutdown at ICL Iberia, dedicated to connecting the ramp to the Cabanasses mine, and the closure of the Sallent site at ICL Iberia at the end of June 2020.
|
- |
Sales – The quantity of potash sold was 78 thousand tonnes lower year-over-year, primarily due to the decrease in potash sales, mainly to
China. This was partly offset by an increase in sales to India and Brazil.
|
- |
Production – In the six-month period ended June 30, 2021, potash production was 81 thousand tonnes lower than the corresponding period
last year, mainly due to over two-week shutdown at ICL Iberia, dedicated to connecting the ramp to the Cabanasses mine and the closure of the Sallent site at ICL Iberia at the end of June 2020. ICL Dead Sea Production was similar to last
year despite the one-week maintenance shutdown during the second quarter of 2021.
|
- |
Sales – The quantity of potash sold in the six-month period ended June 30,2021, was about the same compared to the corresponding period
last year.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
Q2 2020 figures
|
340
|
(302)
|
38
|
|
Quantity
|
8
|
(17)
|
(9)
|
|
Price
|
58
|
-
|
58
|
|
Exchange rates
|
6
|
(16)
|
(10)
|
|
Energy
|
-
|
(6)
|
(6)
|
|
Transportation
|
-
|
(18)
|
(18)
|
|
Operating and other expenses
|
-
|
(10)
|
(10)
|
|
Q2 2021 figures
|
412
|
(369)
|
43
|
- |
Quantity – The negative impact on the segment’s operating income was due to lower sales volumes of potash, partly offset by higher sales
of lower-margin products.
|
- |
Price – The positive impact on the segment’s operating income was primarily related to an increase of $55 in the average realized price
per tonne of potash year-over-year, as well as an increase in the selling prices of FertilizerpluS products.
|
- |
Exchange rates – The unfavorable impact on the segment’s operating income was primarily related to the appreciation of the average
exchange rate of the Israeli shekel against the dollar, which increased operational costs, as well as the appreciation of the average exchange rate of the British pound and the euro against the dollar, which led to a negative effect on
the operating income.
|
- |
Energy - The negative impact on the segment’s operating income was primarily related to an increase in electricity prices.
|
- |
Transportation – The negative impact on the segment’s operating income was primarily related to an increase in marine transportation
costs.
|
- |
Operating and other expenses – The negative impact on the segment’s operating income was primarily related to the one-week annual
shutdown for facility maintenance at ICL Dead Sea, a two-week shutdown at ICL Iberia, dedicated to connecting the ramp
to the Cabanasses mine, as well as higher payments of royalties due to the increase in potash prices. This trend was partly offset by the impact of COVID-19 pandemic recorded in the corresponding period.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
YTD 2020 figures
|
654
|
(602)
|
52
|
|
Quantity
|
44
|
(43)
|
1
|
|
Price
|
81
|
-
|
81
|
|
Exchange rates
|
18
|
(34)
|
(16)
|
|
Energy
|
-
|
(5)
|
(5)
|
|
Transportation
|
-
|
(27)
|
(27)
|
|
Operating and other expenses
|
-
|
(14)
|
(14)
|
|
YTD 2021 figures
|
797
|
(725)
|
72
|
- |
Quantity – The positive impact on the segment’s operating income was primarily related to an increase in sales volumes of potash, partly
offset by an increase in sales volumes of lower-margin products.
|
- |
Price – The positive impact on the segment’s operating income was primarily related to an increase of $32 in the average realized price
per tonne of potash year-over-year, as well as an increase in the selling prices of FertilizerpluS products.
|
- |
Exchange rates – The unfavorable impact on the segment’s operating income was primarily related to the appreciation of the average
exchange rate of the Israeli shekel against the dollar, which increased operational costs, as well as the appreciation of the average exchange rate of the British pound against the dollar, which led to a negative effect on the operating
income. This trend was partly offset by the appreciation of the average exchange rate of the euro against the dollar, which led to a positive effect on the operating income.
|
- |
Energy - The negative impact on the segment’s operating income was primarily related to an increase in electricity prices.
|
- |
Transportation – The negative impact on the segment’s operating income was primarily related to an increase in marine transportation
costs.
|
- |
Operating and other expenses – The negative impact on the segment’s operating income was primarily related to a week-long annual shutdown
at ICL Dead Sea, an over two weeks shutdown at ICL Iberia dedicated to connecting the ramp to the Cabanasses mine, as well as higher payments of royalties due to the increase in potash prices. This trend was partly offset by the impact of
the COVID-19 pandemic, recorded in the corresponding period.
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Segment Sales
|
623
|
439
|
1,168
|
941
|
1,948
|
Sales to external customers
|
599
|
421
|
1,124
|
904
|
1,871
|
Sales to internal customers
|
24
|
18
|
44
|
37
|
77
|
Segment Profit
|
77
|
8
|
117
|
17
|
66
|
Depreciation and amortization
|
57
|
52
|
111
|
101
|
210
|
Capital expenditures
|
68
|
63
|
119
|
124
|
275
|
• |
Phosphate salts sales were significantly up year-over-year, with higher sales of food grade phosphates and industrial salts.
|
- |
Food grade phosphates: with continued focus on integrated solutions and next generation product development, second quarter 2021 sales were
notably higher year-over-year, supported by positive volumes momentum in North America, as well by higher prices globally.
|
- |
Industrial salts: overall sales of industrial salts increased year-over-year. Higher demand in most regions and industries, continuously
recovering from COVID-19 related weakness in the corresponding period, compensated for lower sales volumes to the body care industry in China. Pricing levels increased slightly year-over-year.
|
• |
White phosphoric acid (WPA) sales increased significantly year-over-year, driven by higher sales volumes in all regions, especially in South
America, and higher sales prices in all regions.
|
• |
Dairy protein sales in the second quarter of 2021 increased year-over-year as a result of maintaining global leadership position in organic cow
and goat-milk ingredients, despite mid-term market growth adjustments in Asia Pacific.
|
• |
Phosphate fertilizers prices continued to surge during the second quarter of 2021 to highs last recorded over a decade ago. The increase in
phosphate fertilizers prices was supported by high crop prices, which were driven mainly by continuing food security concerns related to COVID-19 and by China’s efforts to rebuild its hog herds that are recovering from the African Swine
Fever.
|
- |
DAP imports to India increased significantly during the quarter due to low availability of local production following the sharp
quarter-over-quarter increase of $203 per tonne in the second quarter phosphoric acid contract price. This trend was further supported by the Indian government's decision to more than double its relevant Nutrient-Based Subsidy (NBS),
while decreasing the DAP Maximum Retail Price (MRP) for the 2021/2 agriculture year.
|
- |
Prices in the U.S. continued to increase during the second quarter of 2021, following the U.S. authorities' final decision during the previous
quarter to impose countervailing duties on phosphate imports from Morocco and Russia. Strong summer fill demand and an expected decrease in DAP and MAP production by Mosaic at its Faustina site, further supported that trend.
|
- |
In Brazil, tight supply, drought conditions, strong farmer affordability and an increase in planted area drove fertilizer prices higher, with
MAP prices reaching highs not recorded in over a decade.
|
- |
The prices of sulphur, one of the main raw materials of phosphate fertilizers, followed the above trend and continued to increase significantly
as well, but stabilized towards the end of this quarter. Marine transportation costs have also increased significantly due to worldwide bulk carrier shortage.
|
• |
On July 5, 2021, OCP (Morocco) concluded its third quarter phosphoric acid supply contracts to India at a price of $1,160 per tonne (CFR 100% P2O5),
an increase of $162 per tonne compared to the previous quarter. This is the sixth consecutive price increase indicated in these quarterly contracts since the first quarter of 2020, with an accumulated increase of $570/tonne, reflecting
the continuing positive global sentiment in the phosphate commodity market.
|
Average prices
|
$ per tonne
|
4-6/2021
|
4-6/2020
|
VS Q2 2020
|
1-3/2021
|
VS Q1 2021
|
DAP
|
CFR India Spot
|
565
|
316
|
79%
|
455
|
24%
|
TSP
|
CFR Brazil Spot
|
527
|
245
|
115%
|
408
|
29%
|
SSP
|
CPT Brazil inland 18-20% P2O5 Spot
|
250
|
173
|
45%
|
206
|
21%
|
Sulphur
|
Bulk FOB Adnoc monthly contract
|
185
|
60
|
208%
|
138
|
34%
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
Q2 2020 figures
|
439
|
(431)
|
8
|
|
Quantity
|
67
|
(56)
|
11
|
|
Price
|
85
|
-
|
85
|
|
Exchange rates
|
32
|
(33)
|
(1)
|
|
Raw materials
|
-
|
(29)
|
(29)
|
|
Energy
|
-
|
-
|
-
|
|
Transportation
|
-
|
(7)
|
(7)
|
|
Operating and other expenses
|
-
|
10
|
10
|
|
Q2 2021 figures
|
623
|
(546)
|
77
|
- |
Quantity – The positive impact on the segment's operating income was driven mainly by strong sales volumes of phosphate fertilizers,
acids and phosphate-based food additives and salts.
|
- |
Price – The positive impact on the segment's operating income was primarily related to an increase in the selling prices of phosphate
fertilizers, which surged to highs last recorded over a decade ago.
|
- |
Exchange rates – The unfavorable impact on the segment’s operating income was primarily related to the appreciation of the average
exchange rate of the Israeli shekel against the dollar, which increased operational costs. This trend was partly offset by the appreciation of the average exchange rate of the euro and the Chinese yuan against the dollar, which led to a
positive effect on the operating income.
|
- |
Raw materials – The negative impact of raw material prices on the segment’s operating income was due to higher prices of sulphur consumed
during the quarter.
|
- |
Transportation - The negative impact on the segment’s operating income was
primarily related to an increase in marine transportation prices.
|
- |
Operating and other expenses – The positive impact on the segment's operating income was primarily related to positive operational impact
due to increased production at Rotem Amfert Israel and at YPH joint venture, as well as cost-reduction initiatives implemented in 2020, including an efficiency plan for Rotem Amfert Israel.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
YTD 2020 figures
|
941
|
(924)
|
17
|
|
Quantity
|
55
|
(46)
|
9
|
|
Price
|
116
|
-
|
116
|
|
Exchange rates
|
56
|
(54)
|
2
|
|
Raw materials
|
-
|
(40)
|
(40)
|
|
Energy
|
-
|
1
|
1
|
|
Transportation
|
-
|
(11)
|
(11)
|
|
Operating and other expenses
|
-
|
23
|
23
|
|
YTD 2021 figures
|
1,168
|
(1,051)
|
117
|
- |
Quantity – The positive impact on the segment's operating income was primarily related to an increase in the sales volumes of phosphate
fertilizers, acids and phosphate-based food additives.
|
- |
Price – The positive impact on the segment's operating income was primarily related to an increase in the selling prices of phosphate
fertilizers, which surged to highs last recorded over a decade ago, as well as higher selling prices in the phosphate specialties business.
|
- |
Exchange rates – The favorable impact on the segment’s operating income was primarily related to the appreciation of the average exchange
rate of the euro and the Chinese yuan against the dollar, which led to a positive effect on the operating income. Additionally, the devaluation of the average exchange rate of the Brazilian real against the dollar decreased operational
costs. The above trend was partly offset by the appreciation of the average exchange rate of the Israeli shekel against the dollar, which increased operational costs.
|
- |
Raw materials – The negative impact of raw material prices on the segment’s operating income was primarily related to higher prices of
sulphur consumed during the period.
|
- |
Transportation - The negative impact on the segment’s operating income was
primarily related to an increase in marine transportation prices.
|
- |
Operating and other expenses – The positive impact on the segment's operating income was primarily related to a positive operational
impact due to increased production at Rotem Amfert Israel and at YPH joint venture, as well as cost-reduction initiatives implemented in 2020, including an efficiency plan for Rotem Amfert Israel.
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Segment Sales
|
237
|
196
|
478
|
395
|
731
|
Sales to external customers
|
235
|
193
|
473
|
389
|
715
|
Sales to internal customers
|
2
|
3
|
5
|
6
|
16
|
Segment Profit
|
20
|
15
|
42
|
29
|
40
|
Depreciation and amortization
|
7
|
7
|
14
|
12
|
25
|
Capital expenditures
|
5
|
4
|
* 9
|
7
|
20
|
* |
Not including capital expenditures as part of business combination. For further information,
see Note 3 to the Company’s Interim Financial Statements.
|
• |
The segment reached an all-time operating income record in the second quarter of 2021. The improved performance is attributed to strong demand
and higher sales volumes and prices, favorable exchange rates and product mix, partially offset by higher costs of raw materials.
|
• |
Sales to the specialty agriculture market increased year-over-year, mainly due to higher sales volumes of straight, liquid and
controlled-release fertilizers, as well as a positive impact of exchange rates. The increase in sales volumes was recorded in most regions, mainly in Europe, China, North America, and South America - especially in Brazil.
|
• |
Sales and operating income of the Turf and Ornamental business (T&O) increased year-over-year. Higher sales volumes and selling prices drove
strong growth globally.
|
• |
The acquisition of Compass Minerals América do Sul S.A., was completed successfully at the beginning of July 2021. It positions ICL as the
leading specialty plant nutrition company in Brazil, one of the world’s fastest growing agriculture markets. It will also significantly expand ICL’s product portfolio and profitability, while providing further seasonal balance between the
Northern and Southern hemispheres, already in 2021.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
Q2 2020 figures
|
196
|
(181)
|
15
|
|
Quantity
|
17
|
(16)
|
1
|
|
Price
|
8
|
-
|
8
|
|
Exchange rates
|
16
|
(14)
|
2
|
|
Raw materials
|
-
|
(6)
|
(6)
|
|
Energy
|
-
|
-
|
-
|
|
Transportation
|
-
|
-
|
-
|
|
Operating and other expenses
|
-
|
-
|
-
|
|
Q2 2021 figures*
|
237
|
(217)
|
20
|
- |
Quantity – The positive impact on the segment's operating income was primarily related to higher sales volumes of both specialty
agriculture and turf and ornamental products, mainly controlled-release and straight fertilizers.
|
- |
Price – The positive impact on the segment's operating income was primarily related to higher selling prices of specialty agriculture
products.
|
- |
Exchange rates – The favorable impact on the segment’s operating income was primarily related to the appreciation of the average exchange
rate of the euro against the dollar, which contributed to the segment's revenue.
|
- |
Raw materials – The negative impact on the segment's operating income was due to higher costs of commodity fertilizers and ammonia.
|
Sales
|
Expenses
|
Operating income
|
||
$ millions
|
YTD 2020 figures
|
395
|
(366)
|
29
|
|
Quantity
|
41
|
(38)
|
3
|
|
Price
|
9
|
-
|
9
|
|
Exchange rates
|
33
|
(29)
|
4
|
|
Raw materials
|
-
|
(3)
|
(3)
|
|
Energy
|
-
|
-
|
-
|
|
Transportation
|
-
|
-
|
-
|
|
Operating and other expenses
|
-
|
-
|
-
|
|
YTD 2021 figures*
|
478
|
(436)
|
42
|
- |
Quantity – The positive impact on the segment's operating income was primarily related to higher sales volumes of both turf and
ornamental and specialty agriculture products, mainly controlled-release and straight fertilizers.
|
- |
Price – The positive impact on the segment's operating income was primarily related to an increase in the selling prices of both turf and
ornamental and specialty agriculture products.
|
- |
Exchange rate – The favorable impact on the segment’s operating income was primarily related to the appreciation of the average exchange
rate of the euro and the Israeli shekel against the dollar, which led to a positive effect on the operating income.
|
(1) |
Item 8 in our 2020 Annual Report on Form 20-F provides
disclosure regarding the arbitration proceedings between the Company's subsidiary ICL Europe Coöperatief U.A. ("ICL Europe") and the Federal Democratic
Republic of Ethiopia ("Ethiopia"), that were administrated by the Hague-based Permanent Court of Arbitration. ICL Europe commenced this arbitration to assert claims against Ethiopia under the
Netherlands-Ethiopia Bilateral Investment Treaty (“BIT”) seeking compensation for losses to its investment in its Ethiopian potash project due to mistreatment by the Ethiopian Government. ICL
Europe claimed that the Ethiopian tax authority imposed a discriminatory, arbitrary and baseless tax on ICL Europe’s Ethiopian project company, Allana Potash Afar Plc (“Allana Afar”). On July 9, 2021, the arbitration tribunal rendered its award. Despite indications that Ethiopia’s tax assessment was flawed, the tribunal interpreted the BIT as significantly limiting the
BIT’s protections in relation to disputes regarding taxation. Among other things, this had the significant effect of precluding ICL Europe's claims that Ethiopia violated the requirement to accord fair and equitable treatment to ICL
Europe's investments in Ethiopia. Consequently, the tribunal rejected ICL Europe's claims and ordered ICL Europe to pay an amount of approximately $2.5 million as reimbursement of arbitration costs in accordance with the applicable
arbitration rules. Since 2017, Allana Afar is not included in ICL's consolidated financial statements. This award does not have a material impact on the Company’s Financial Statements.
|
(2) |
The Annual reports provides disclosure regarding the agreement with Energean to supply natural gas (NG) and its announcement from June 2020,
regarding postponement of the gas supply until the first quarter of 2022. In May 2021, Energean announced that the gas supply is expected to be further postponed until mid-2022. The Company reserves all of its rights in relation with
Energean's announcements. No significant impact is expected on the Company following the said delay.
|
June 30,
2021 |
June 30,
2020 |
December 31, 2020
|
|
$ millions
|
$ millions
|
$ millions
|
Current assets
|
|||
Cash and cash equivalents
|
318
|
323
|
214
|
Short-term investments and deposits
|
92
|
86
|
100
|
Trade receivables
|
1,097
|
831
|
883
|
Inventories
|
1,207
|
1,202
|
1,250
|
Investments at fair value through other comprehensive income
|
180
|
38
|
53
|
Prepaid expenses and other receivables
|
344
|
384
|
341
|
Total current assets
|
3,238
|
2,864
|
2,841
|
Non-current assets
|
|||
Investments at fair value through other comprehensive income
|
-
|
76
|
83
|
Deferred tax assets
|
143
|
116
|
127
|
Property, plant and equipment
|
5,601
|
5,228
|
5,550
|
Intangible assets
|
725
|
634
|
670
|
Other non-current assets
|
373
|
308
|
393
|
Total non-current assets
|
6,842
|
6,362
|
6,823
|
Total assets
|
10,080
|
9,226
|
9,664
|
Current liabilities
|
|||
Short-term debt
|
630
|
544
|
679
|
Trade payables
|
801
|
720
|
740
|
Provisions
|
55
|
51
|
54
|
Other payables
|
659
|
576
|
704
|
Total current liabilities
|
2,145
|
1,891
|
2,177
|
Non-current liabilities
|
|||
Long-term debt and debentures
|
2,212
|
2,297
|
2,053
|
Deferred tax liabilities
|
368
|
305
|
326
|
Long-term employee liabilities
|
622
|
579
|
655
|
Long-term provisions and accruals
|
278
|
227
|
267
|
Other
|
76
|
69
|
98
|
Total non-current liabilities
|
3,556
|
3,477
|
3,399
|
Total liabilities
|
5,701
|
5,368
|
5,576
|
Equity
|
|||
Total shareholders’ equity
|
4,201
|
3,722
|
3,930
|
Non-controlling interests
|
178
|
136
|
158
|
Total equity
|
4,379
|
3,858
|
4,088
|
Total liabilities and equity
|
10,080
|
9,226
|
9,664
|
For the three-month
period ended
|
For the six-month
period ended
|
For the year ended
|
|||
June 30, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
December 31, 2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Sales
|
1,617
|
1,203
|
3,127
|
2,522
|
5,043
|
Cost of sales
|
1,047
|
883
|
2,062
|
1,802
|
3,553
|
Gross profit
|
570
|
320
|
1,065
|
720
|
1,490
|
Selling, transport and marketing expenses
|
246
|
183
|
475
|
371
|
766
|
General and administrative expenses
|
67
|
56
|
129
|
120
|
232
|
Research and development expenses
|
14
|
10
|
29
|
24
|
54
|
Other expenses
|
25
|
244
|
30
|
246
|
256
|
Other income
|
(25)
|
(4)
|
(26)
|
(4)
|
(20)
|
Operating income (loss)
|
243
|
(169)
|
428
|
(37)
|
202
|
Finance expenses
|
64
|
54
|
62
|
88
|
219
|
Finance income
|
(34)
|
(23)
|
(12)
|
(5)
|
(61)
|
Finance expenses, net
|
30
|
31
|
50
|
83
|
158
|
Share in earnings of equity-accounted investees
|
1
|
1
|
1
|
2
|
5
|
Income (loss) before income taxes
|
214
|
(199)
|
379
|
(118)
|
49
|
Provision for income taxes
|
64
|
(33)
|
87
|
(13)
|
25
|
Net income (loss)
|
150
|
(166)
|
292
|
(105)
|
24
|
Net income attributable to the non-controlling interests
|
10
|
2
|
17
|
3
|
13
|
Net income (loss) attributable to the shareholders of the Company
|
140
|
(168)
|
275
|
(108)
|
11
|
Earnings per share attributable to the shareholders of the Company:
|
|||||
Basic earnings (loss) per share (in dollars)
|
0.11
|
(0.13)
|
0.22
|
(0.08)
|
0.01
|
Diluted earnings (loss) per share (in dollars)
|
0.11
|
(0.13)
|
0.22
|
(0.08)
|
0.01
|
Weighted-average number of ordinary shares outstanding:
|
|||||
Basic (in thousands)
|
1,281,977
|
1,280,524
|
1,281,192
|
1,279,977
|
1,280,026
|
Diluted (in thousands)
|
1,285,658
|
1,280,721
|
1,284,873
|
1,280,175
|
1,280,273
|
For the three-month period ended
|
For the six-month period ended
|
For the year ended
|
|||
June 30, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
December 31, 2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Net income (loss)
|
150
|
(166)
|
292
|
(105)
|
24
|
Components of other comprehensive income that will be reclassified subsequently to net income
|
|||||
Currency translation differences
|
46
|
29
|
(18)
|
(35)
|
118
|
Change in fair value of cash flow hedges transferred to the statement of income
|
(13)
|
(20)
|
16
|
(2)
|
(54)
|
Effective portion of the change in fair value of cash flow hedges
|
11
|
42
|
(26)
|
(9)
|
53
|
Tax relating to items that will be reclassified subsequently to net income
|
-
|
(5)
|
2
|
3
|
-
|
44
|
46
|
(26)
|
(43)
|
117
|
|
Components of other comprehensive income that will not be reclassified to net income
|
|||||
Net changes of investments at fair value through other comprehensive income
|
91
|
(22)
|
119
|
(14)
|
18
|
Gains (losses) from defined benefit plans
|
8
|
(6)
|
18
|
12
|
(15)
|
Tax relating to items that will not be reclassified to net income
|
(13)
|
-
|
(15)
|
(5)
|
(6)
|
86
|
(28)
|
122
|
(7)
|
(3)
|
|
Total comprehensive income (loss)
|
280
|
(148)
|
388
|
(155)
|
138
|
Comprehensive income attributable to the non-controlling interests
|
14
|
5
|
20
|
-
|
23
|
Comprehensive income (loss) attributable to the shareholders of the Company
|
266
|
(153)
|
368
|
(155)
|
115
|
For the three-month period ended
|
For the six-month period ended
|
For the year ended
|
|||
June 30, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
December 31, 2020
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Cash flows from operating activities
|
|||||
Net income (loss)
|
150
|
(166)
|
292
|
(105)
|
24
|
Adjustments for:
|
|||||
Depreciation and amortization
|
124
|
119
|
241
|
237
|
489
|
(Reversal of) Impairment of fixed assets
|
(9)
|
90
|
(9)
|
90
|
90
|
Exchange rate, interest and derivative, net
|
-
|
14
|
53
|
97
|
90
|
Tax expenses (income)
|
64
|
(33)
|
87
|
(13)
|
25
|
Change in provisions
|
12
|
153
|
(9)
|
128
|
113
|
Other
|
8
|
4
|
10
|
8
|
5
|
199
|
347
|
373
|
547
|
812
|
|
Change in inventories
|
(3)
|
34
|
27
|
62
|
54
|
Change in trade receivables
|
(27)
|
111
|
(174)
|
(75)
|
(89)
|
Change in trade payables
|
36
|
(4)
|
75
|
67
|
84
|
Change in other receivables
|
(31)
|
(8)
|
(40)
|
(14)
|
5
|
Change in other payables
|
(17)
|
(87)
|
(29)
|
(59)
|
54
|
Net change in operating assets and liabilities
|
(42)
|
46
|
(141)
|
(19)
|
108
|
Interests paid
|
(37)
|
(36)
|
(55)
|
(56)
|
(109)
|
Income taxes paid, net of refund
|
(28)
|
(14)
|
(21)
|
(24)
|
(31)
|
Net cash provided by operating activities
|
242
|
177
|
448
|
343
|
804
|
Cash flows from investing activities
|
|||||
Proceeds from deposits and investments, net
|
90
|
17
|
98
|
29
|
34
|
Business combinations
|
-
|
-
|
(64)
|
(27)
|
(27)
|
Purchases of property, plant and equipment and intangible assets
|
(151)
|
(161)
|
(298)
|
(300)
|
(626)
|
Proceeds from divestiture of businesses net of transaction expenses
|
-
|
17
|
-
|
17
|
26
|
Other
|
3
|
4
|
3
|
5
|
10
|
Net cash used in investing activities
|
(58)
|
(123)
|
(261)
|
(276)
|
(583)
|
Cash flows from financing activities
|
|||||
Dividends paid to the Company's shareholders
|
(67)
|
(30)
|
(101)
|
(53)
|
(118)
|
Receipt of long-term debt
|
187
|
355
|
497
|
877
|
1,175
|
Repayments of long-term debt
|
(144)
|
(408)
|
(455)
|
(551)
|
(1,133)
|
Receipts (repayments) of short-term debt, net
|
25
|
(99)
|
(16)
|
(108)
|
(52)
|
Receipts (payments) from transactions in derivatives
|
(32)
|
14
|
(18)
|
(2)
|
24
|
Other
|
-
|
-
|
-
|
-
|
(1)
|
Net cash provided by (used in) financing activities
|
(31)
|
(168)
|
(93)
|
163
|
(105)
|
Net change in cash and cash equivalents
|
153
|
(114)
|
94
|
230
|
116
|
Cash and cash equivalents as at the beginning of the period
|
157
|
434
|
214
|
95
|
95
|
Net effect of currency translation on cash and cash equivalents
|
8
|
3
|
10
|
(2)
|
3
|
Cash and cash equivalents as at the end of the period
|
318
|
323
|
318
|
323
|
214
|
Attributable to the shareholders of the Company
|
Non-controlling interests
|
Total
equity
|
|||||||
Share
capital
|
Share premium
|
Cumulative translation adjustments
|
Capital reserves
|
Treasury shares,
at cost
|
Retained earnings
|
Total shareholders' equity
|
|||
$ millions
|
For the three-month period ended June 30, 2021
|
|||||||||
Balance as at April 1, 2021
|
546
|
207
|
(397)
|
43
|
(260)
|
3,861
|
4,000
|
164
|
4,164
|
Share-based compensation
|
1
|
10
|
-
|
(9)
|
-
|
-
|
2
|
-
|
2
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(67)
|
(67)
|
-
|
(67)
|
Comprehensive Income
|
-
|
-
|
42
|
77
|
-
|
147
|
266
|
14
|
280
|
Balance as at June 30, 2021
|
547
|
217
|
(355)
|
111
|
(260)
|
3,941
|
4,201
|
178
|
4,379
|
Attributable to the shareholders of the Company
|
Non-controlling interests
|
Total
equity
|
|||||||
Share
capital
|
Share premium
|
Cumulative translation adjustments
|
Capital reserves
|
Treasury shares,
at cost
|
Retained earnings
|
Total shareholders' equity
|
|||
$ millions
|
For the three-month period ended June 30, 2020
|
|||||||||
Balance as at April 1, 2020
|
546
|
199
|
(500)
|
(12)
|
(260)
|
3,930
|
3,903
|
131
|
4,034
|
Share-based compensation
|
-
|
1
|
-
|
1
|
-
|
-
|
2
|
-
|
2
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(30)
|
(30)
|
-
|
(30)
|
Comprehensive Income (loss)
|
-
|
-
|
26
|
(5)
|
-
|
(174)
|
(153)
|
5
|
(148)
|
Balance as at June 30, 2020
|
546
|
200
|
(474)
|
(16)
|
(260)
|
3,726
|
3,722
|
136
|
3,858
|
Attributable to the shareholders of the Company
|
Non-controlling interests
|
Total
equity
|
|||||||
Share
capital
|
Share premium
|
Cumulative translation adjustments
|
Capital reserves
|
Treasury shares,
at cost
|
Retained earnings
|
Total shareholders' equity
|
|||
$ millions
|
For the six-month period ended June 30, 2021
|
|||||||||
Balance as at January 1, 2021
|
546
|
204
|
(334)
|
22
|
(260)
|
3,752
|
3,930
|
158
|
4,088
|
Share-based compensation
|
1
|
13
|
-
|
(10)
|
-
|
-
|
4
|
-
|
4
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(101)
|
(101)
|
-
|
(101)
|
Comprehensive income
|
-
|
-
|
(21)
|
99
|
-
|
290
|
368
|
20
|
388
|
Balance as at June 30, 2021
|
547
|
217
|
(355)
|
111
|
(260)
|
3,941
|
4,201
|
178
|
4,379
|
Attributable to the shareholders of the Company
|
Non-controlling interests
|
Total
equity
|
|||||||
Share
capital
|
Share premium
|
Cumulative translation adjustments
|
Capital reserves
|
Treasury shares,
at cost
|
Retained earnings
|
Total shareholders' equity
|
|||
$ millions
|
For the six-month period ended June 30, 2020
|
|||||||||
Balance as at January 1, 2020
|
546
|
198
|
(442)
|
3
|
(260)
|
3,880
|
3,925
|
136
|
4,061
|
Share-based compensation
|
-
|
2
|
-
|
3
|
-
|
-
|
5
|
-
|
5
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(53)
|
(53)
|
-
|
(53)
|
Comprehensive loss
|
-
|
-
|
(32)
|
(22)
|
-
|
(101)
|
(155)
|
-
|
(155)
|
Balance as at June 30, 2020
|
546
|
200
|
(474)
|
(16)
|
(260)
|
3,726
|
3,722
|
136
|
3,858
|
Attributable to the shareholders of the Company
|
Non-controlling interests
|
Total
equity
|
|||||||
Share
capital
|
Share premium
|
Cumulative translation adjustments
|
Capital reserves
|
Treasury shares,
at cost
|
Retained earnings
|
Total shareholders' equity
|
|||
$ millions
|
For the year ended December 31, 2020
|
|||||||||
Balance as at January 1, 2020
|
546
|
198
|
(442)
|
3
|
(260)
|
3,880
|
3,925
|
136
|
4,061
|
Share-based compensation
|
-
|
6
|
-
|
2
|
-
|
-
|
8
|
-
|
8
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(118)
|
(118)
|
(1)
|
(119)
|
Comprehensive income
|
-
|
-
|
108
|
17
|
-
|
(10)
|
115
|
23
|
138
|
Balance as at December 31, 2020
|
546
|
204
|
(334)
|
22
|
(260)
|
3,752
|
3,930
|
158
|
4,088
|
A. |
The Reporting Entity
|
B. |
Material events in the reporting period
|
A. |
Basis of Preparation
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the three-month period ended June 30, 2021
|
|||||||
Sales to external parties
|
406
|
370
|
599
|
235
|
7
|
-
|
1,617
|
Inter-segment sales
|
4
|
42
|
24
|
2
|
-
|
(72)
|
-
|
Total sales
|
410
|
412
|
623
|
237
|
7
|
(72)
|
1,617
|
Segment profit (loss)
|
114
|
43
|
77
|
20
|
(2)
|
(16)
|
236
|
Other expenses not allocated to the segments
|
7
|
||||||
Operating income
|
243
|
||||||
Financing expenses, net
|
(30)
|
||||||
Share in earnings of equity-accounted investees
|
1
|
||||||
Income before income taxes
|
214
|
||||||
Depreciation, amortization and impairment
|
14
|
42
|
57
|
7
|
1
|
(6)
|
115
|
Capital expenditures
|
14
|
72
|
68
|
5
|
2
|
3
|
164
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the three-month period ended June 30, 2020
|
|||||||
Sales to external parties
|
281
|
301
|
421
|
193
|
7
|
-
|
1,203
|
Inter-segment sales
|
4
|
39
|
18
|
3
|
2
|
(66)
|
-
|
Total sales
|
285
|
340
|
439
|
196
|
9
|
(66)
|
1,203
|
Segment profit (loss)
|
70
|
38
|
8
|
15
|
(2)
|
(1)
|
128
|
Other expenses not allocated to the segments
|
(297)
|
||||||
Operating loss
|
(169)
|
||||||
Financing expenses, net
|
(31)
|
||||||
Share in earnings of equity-accounted investees
|
1
|
||||||
Loss before income taxes
|
(199)
|
||||||
Depreciation, amortization and impairment
|
18
|
42
|
52
|
7
|
-
|
131
|
250
|
Capital expenditures
|
24
|
55
|
63
|
4
|
-
|
-
|
146
|
Capital expenditures as part of business combination
|
-
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the six-month period ended June 30, 2021
|
|||||||
Sales to external parties
|
800
|
716
|
1,124
|
473
|
14
|
-
|
3,127
|
Inter-segment sales
|
8
|
81
|
44
|
5
|
1
|
(139)
|
-
|
Total sales
|
808
|
797
|
1,168
|
478
|
15
|
(139)
|
3,127
|
Segment profit (loss)
|
219
|
72
|
117
|
42
|
(4)
|
(25)
|
421
|
Other expenses not allocated to the segments
|
7
|
||||||
Operating income
|
428
|
||||||
Financing expenses, net
|
(50)
|
||||||
Share in earnings of equity-accounted investees
|
1
|
||||||
Income before income taxes
|
379
|
||||||
Depreciation, amortization and impairment
|
31
|
79
|
111
|
14
|
1
|
(4)
|
232
|
Capital expenditures
|
31
|
137
|
119
|
9
|
3
|
6
|
305
|
Capital expenditures as part of business combination
|
-
|
-
|
-
|
70
|
-
|
-
|
70
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the six-month period ended June 30, 2020
|
|||||||
Sales to external parties
|
642
|
572
|
904
|
389
|
15
|
-
|
2,522
|
Inter-segment sales
|
7
|
82
|
37
|
6
|
2
|
(134)
|
-
|
Total sales
|
649
|
654
|
941
|
395
|
17
|
(134)
|
2,522
|
Segment profit (loss)
|
173
|
52
|
17
|
29
|
(2)
|
(9)
|
260
|
Other expenses not allocated to the segments
|
(297)
|
||||||
Operating loss
|
(37)
|
||||||
Financing expenses, net
|
(83)
|
||||||
Share in earnings of equity-accounted investees
|
2
|
||||||
Loss before income taxes
|
(118)
|
||||||
Depreciation, amortization and impairment
|
35
|
81
|
101
|
12
|
7
|
132
|
368
|
Capital expenditures
|
45
|
116
|
124
|
7
|
4
|
1
|
297
|
Capital expenditures as part of business combination
|
-
|
-
|
-
|
-
|
25
|
-
|
25
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the year ended December 31, 2020
|
|||||||
Sales to external parties
|
1,242
|
1,183
|
1,871
|
715
|
32
|
-
|
5,043
|
Inter-segment sales
|
13
|
163
|
77
|
16
|
3
|
(272)
|
-
|
Total sales
|
1,255
|
1,346
|
1,948
|
731
|
35
|
(272)
|
5,043
|
Segment profit (loss)
|
303
|
120
|
66
|
40
|
(5)
|
(15)
|
509
|
Other expenses not allocated to the segments
|
(307)
|
||||||
Operating income
|
202
|
||||||
Financing expenses, net
|
(158)
|
||||||
Share in earnings of equity-accounted investees
|
5
|
||||||
Income before income taxes
|
49
|
||||||
Depreciation, amortization and impairment
|
77
|
166
|
210
|
25
|
3
|
98
|
579
|
Capital expenditures
|
84
|
296
|
275
|
20
|
6
|
15
|
696
|
Capital expenditures as part of business combination
|
-
|
-
|
-
|
-
|
26
|
-
|
26
|
4-6/2021
|
4-6/2020
|
1-6/2021
|
1-6/2020
|
1-12/2020
|
||||||
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
$
millions
|
% of
sales
|
China
|
255
|
16
|
216
|
18
|
500
|
16
|
357
|
14
|
806
|
16
|
USA
|
245
|
15
|
173
|
14
|
520
|
17
|
405
|
16
|
793
|
16
|
Brazil
|
230
|
14
|
122
|
10
|
316
|
10
|
216
|
9
|
447
|
9
|
Germany
|
94
|
6
|
76
|
6
|
189
|
6
|
177
|
7
|
327
|
6
|
United Kingdom
|
88
|
5
|
73
|
6
|
215
|
7
|
189
|
7
|
336
|
7
|
Israel
|
75
|
5
|
71
|
6
|
138
|
4
|
130
|
5
|
260
|
5
|
France
|
67
|
4
|
59
|
5
|
141
|
5
|
124
|
5
|
238
|
5
|
Spain
|
66
|
4
|
52
|
4
|
148
|
5
|
124
|
5
|
243
|
5
|
India
|
61
|
4
|
34
|
3
|
86
|
3
|
82
|
3
|
194
|
4
|
Austria
|
44
|
3
|
31
|
3
|
71
|
2
|
57
|
2
|
103
|
2
|
All other
|
392
|
24
|
296
|
25
|
803
|
25
|
661
|
27
|
1,296
|
25
|
Total
|
1,617
|
100
|
1,203
|
100
|
3,127
|
100
|
2,522
|
100
|
5,043
|
100
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the three-month period ended June 30, 2021
|
|||||||
Europe
|
142
|
96
|
185
|
113
|
6
|
(23)
|
519
|
Asia
|
148
|
128
|
150
|
39
|
-
|
(3)
|
462
|
North America
|
87
|
32
|
125
|
28
|
-
|
(1)
|
271
|
South America
|
22
|
112
|
116
|
12
|
-
|
-
|
262
|
Rest of the world
|
11
|
44
|
47
|
45
|
1
|
(45)
|
103
|
Total
|
410
|
412
|
623
|
237
|
7
|
(72)
|
1,617
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the three-month period ended June 30, 2020
|
|||||||
Europe
|
99
|
84
|
154
|
89
|
7
|
(17)
|
416
|
Asia
|
98
|
132
|
93
|
36
|
-
|
(4)
|
355
|
North America
|
66
|
14
|
83
|
26
|
1
|
(2)
|
188
|
South America
|
6
|
64
|
62
|
4
|
-
|
-
|
136
|
Rest of the world
|
16
|
46
|
47
|
41
|
1
|
(43)
|
108
|
Total
|
285
|
340
|
439
|
196
|
9
|
(66)
|
1,203
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the six-month period ended June 30, 2021
|
|||||||
Europe
|
286
|
276
|
372
|
242
|
13
|
(42)
|
1,147
|
Asia
|
278
|
203
|
292
|
80
|
-
|
(7)
|
846
|
North America
|
182
|
89
|
239
|
59
|
1
|
(4)
|
566
|
South America
|
35
|
141
|
174
|
22
|
-
|
(1)
|
371
|
Rest of the world
|
27
|
88
|
91
|
75
|
1
|
(85)
|
197
|
Total
|
808
|
797
|
1,168
|
478
|
15
|
(139)
|
3,127
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the six-month period ended June 30, 2020
|
|||||||
Europe
|
226
|
232
|
342
|
196
|
15
|
(35)
|
976
|
Asia
|
204
|
197
|
201
|
68
|
-
|
(7)
|
663
|
North America
|
173
|
33
|
181
|
52
|
1
|
(3)
|
437
|
South America
|
17
|
98
|
124
|
9
|
-
|
-
|
248
|
Rest of the world
|
29
|
94
|
93
|
70
|
1
|
(89)
|
198
|
Total
|
649
|
654
|
941
|
395
|
17
|
(134)
|
2,522
|
Industrial Products
|
Potash
|
Phosphate Solutions
|
Innovative Ag Solutions
|
Other
Activities
|
Reconciliations
|
Consolidated
|
|
$ millions
|
For the year ended December 31, 2020
|
|||||||
Europe
|
458
|
411
|
665
|
334
|
30
|
(76)
|
1,822
|
Asia
|
405
|
433
|
480
|
127
|
1
|
(14)
|
1,432
|
North America
|
299
|
86
|
372
|
105
|
2
|
(5)
|
859
|
South America
|
40
|
230
|
227
|
21
|
-
|
(1)
|
517
|
Rest of the world
|
53
|
186
|
204
|
144
|
2
|
(176)
|
413
|
Total
|
1,255
|
1,346
|
1,948
|
731
|
35
|
(272)
|
5,043
|
June 30, 2021
|
June 30, 2020
|
December 31, 2020
|
||||
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
|
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
$ millions
|
Loans bearing fixed interest
|
106
|
112
|
73
|
78
|
89
|
96
|
Debentures bearing fixed interest
|
||||||
Marketable
|
1,495
|
1,713
|
1,451
|
1,590
|
1,625
|
1,870
|
Non-marketable
|
196
|
210
|
281
|
292
|
281
|
296
|
1,797
|
2,035
|
1,805
|
1,960
|
1,995
|
2,262
|
Level 1
|
June 30,
2021
|
June 30,
2020
|
December 31, 2020
|
$ millions
|
$ millions
|
$ millions
|
Investments at fair value through other comprehensive income (1)
|
180
|
115
|
136
|
Level 2
|
June 30,
2021
|
June 30,
2020
|
December 31, 2020
|
|
$ millions
|
$ millions
|
$ millions
|
Derivatives designated as economic hedge, net
|
(3)
|
(35)
|
(32)
|
Derivatives designated as cash flow hedge, net
|
77
|
47
|
87
|
74
|
12
|
55
|
(1) |
In the second quarter of 2021, the Company sold about 57 million of its shares in YYTH for a consideration of $70 million. As at June 30, 2021, the remaining balance of the shares was about 4.5% of YYTH's
share capital. Subsequent to the date of the report, the remaining holding is about 2%, following an additional sale of 46 million shares for a consideration of $90 million.
|
A. |
Share based payments - Non-marketable options
|
1. |
In May 2021 and July 2021, the Company’s HR & Compensation Committee and the Board of Directors, approved an equity grant of about 647
thousand options in the form of non‑marketable and non-transferable options for no consideration, under the 2014 Equity Compensation Plan to two senior employees. The Fair
value at the grant date (June 30, 2021) is about $859 thousand.
|
2. |
In the second quarter, 7.2 million options were exercised for about $ 10 million.
|
B. |
Dividend Distributions
|
Decision date for dividend distribution by the Board of Directors
|
Actual date of dividend distribution
|
Distributed amount
($ millions)
|
Dividend per share ($)
|
February 11, 2021
|
March 16, 2021
|
34
|
0.03
|
May 6, 2021
|
June 16, 2021
|
67
|
0.05
|
July 28, 2021(after the reporting date)*
|
September 1, 2021
|
68
|
0.05
|
1. |
On March 18, 2021, an application for a class action was filed with the district court in Tel Aviv against the Company, Israel Corporation
Ltd. and the controlling shareholder of Israel Corporation (hereinafter – the Respondents). The application includes a series of allegations concerning, among others, alleged misleading and violation of the Company’s reporting and
disclosure obligations to the public under the Israeli Securities Law, 5728-1968, relating the implications of the royalties claim filed in 2011 by the State of Israel against its subsidiary, Dead Sea Works Ltd., pursuant to the Dead
Sea Concession Law, 5721-1961 and which was conducted and concluded within an arbitration proceeding. The applicant is a shareholder of the Company acting on behalf of a represented class including all those who acquired Company shares
or Israel Corp. shares from August 17, 2011 and held them until May 27, 2014. According to the application, such a group incurred alleged damages by the Respondents, and accordingly, the Court is requested to rule in favor of the group
the entire sum of damage allegedly caused to group members who are shareholders of the Company, in the amount of about NIS 133 million (about $40 million) and to group members who are shareholders of Israel Corp. the additional amount
of NIS 57 million (about $17 million), as of May 27, 2014.
|
2. |
Note 18 to the Company’s Annual Financial Statements provides disclosure regarding the regulatory aspects, which are essential in securing
the future of Rotem phosphate mining and production operations in Israel. Following are the main developments:
|
a. |
In June 2021, the Company's emission permit under the Israeli Clean Air Act (hereinafter - the Law) was renewed until September 2023.
The renewed permit reflects an updated outline of requirements. As for a limited number of projects, their postponement was granted within the framework of an
administrative order under section 45 of the Law, received in July 2021.
|
b. |
The Company's license for oil shale production expired in May 2021. In the
second quarter of 2021, the Ministry of Energy approved the Company's plan to regulate the license areas in terms of safety and ecology, including removal of exposed oil shales. In order to ensure the continuity of energy
production in Rotem Israel, and in accordance with the policy of the Ministry of Energy and the Ministry of Environmental Protection, the Company is working to accelerate the completion of a project to replace the natural
gas-based steam boiler so it will be completed before the mined reserves of the oil shale are utilized.
|
c. |
The Company acts to promote the plan for mining phosphates in Barir field (within the framework of NOP 14B). The approval of NOP 14B is
subject to legal proceedings in the Israeli Supreme Court. In June 2021, following the resolution in another petition which the Court was obligated to wait for, and the
requests of the Company and the State to renew the proceedings, the hearing deadline on the case was brought forward to 28 July 2021.
|
2. |
(cont'd)
|
d. |
Dry and wet phosphogypsum storage – the Company is working with the relevant authorities to obtain the new required Urban Building Plan. As
part of the renewal process, the Company submitted a plan which is expected to be approved in October 2021. According to the new Plan, once approved, the Company will be required to pay a permit tariff for the Dry and wet phosphogypsum.
Since the guidelines regarding the calculation method of the tariff are unclear, there is a difficulty in estimating the future required outflows.
|
3. |
The production process in YPH JV in China requires the Company to operate gypsum and flotation ponds that accumulate phosphogypsum fluid and
other materials formed in the production processes. YPH is planning to expand its ponds area as part of its ongoing operational plan beyond 2021. The Company obtained most of the required certifications, and is working, with the support
and coordination of the Yunnan government, to resolve the remaining issues and to reach an appropriate solution. The Company believes that it is more likely than not that an amicable solution will be found, within the required
timeframe, in order to maintain the regular operation of the site. Failure to obtain a solution or significant delay in obtaining it may have a material impact on YPH's operation.
|
4. |
Note 15 to the Annual Financial Statements provides disclosure regarding the Law for Taxation of Profits from Natural Resources in Israel and
the Company's tax position. In March 2021, the Israeli Tax Authority (ITA) issued an assessment for the years 2016‑2017, which includes a demand for payment of surplus profit levy, in the amount of approximately $81 million, including
interest. The amount mainly represents the different interpretation regarding the measurement of operational property, plant and equipment. The Company submitted its objection to the ITA. The Company believes it is more likely than not
that its position will be accepted.
|
5. |
Note 17 to the Annual Financial Statements provides disclosure regarding the renewal of DSW's water production license for 2021, which
includes a reference to the production of drilled saline water and the intention of the Government Authority Director to examine the change in the Company's definition from "Supplier-Producer" to "Consumer-Producer". In March 2021, a
decision was made by the Water Authority, whereby DSW does not constitute a 'supplier', as defined in the Water Regulations, and should be considered as a 'consumer' for the purpose of charging water fees, starting with the production
license for 2021.
|
5. |
(cont'd)
|
6. |
Note 18 to the Annual Financial Statements provides disclosure regarding the application for certification of a claim as a class action
against the subsidiaries, Rotem Israel and Periclase, according to which severe and extreme environmental hazards, allegedly caused pollution of the groundwater aquifer and the
Ein Bokek spring by industrial wastewater. In June 2021, the petitioners notified the Court on the decision to cease the mediation process and requested to renew the court proceedings.
|
7. |
Note 18 to the Company’s Annual Financial Statements provides disclosure regarding an application for certification of a class action against
the Company, Israel Corporation, and office holders with respect to the manner in which the IT (the Harmonization) project was managed and terminated. In July 2021, the Tel Aviv District Court ruled that the Applicants may file a reply
as well as an application for disclosure of documents and in November 2021, instructions will be given regarding the continuation of the proceedings. Following this decision, in July 2021, the Applicants requested the Supreme Court to
suspend the decision on the application to appeal, pending the aforementioned District Court's ruling. Considering the proceedings are in early stages and even suspended, there is a difficulty in estimating the chances the application
will be accepted. No provision has been recorded in the Company's books.
|
8. |
As part of the collaboration between ICL's subsidiary in Spain (ICL Iberia) and the government of Catalonia to achieve environmental
sustainability goals, the Company has undertaken to carry out restoration of the salt piles in its sites, mainly by processing and removing them to the sea via a Collector. In
April 2021, the Company signed an agreement with the Catalan Water Agency for the construction and operation of the Collector. The main highlights of the agreement include, among others, the way in which the project will be managed, the
financing aspects of the project, the definition of project costs and the determination of the operational maintenance mechanism, including usage costs. Based on the said agreement and the Spanish Water law, it was determined that ICL
Iberia's share will be up to 90% of the project's cost (approximately $110 million), to be paid throughout the construction and operation period. The construction period is expected to extend over four years and the operation period is
expected to be 25 years.
|
9. |
Note 18 to the Annual Financial Statements provides disclosure regarding the arbitration proceeding conducted between Iberpotash, a Spanish subsidiary
(IBP), and AkzoNobel (hereinafter - Nobian) for the termination of the partnership agreement between them. In March 2021, a final arbitration award was rendered dismissing Nobian's compensation claims. The Arbitral Tribunal
determined that the agreement between IBP and Nobian remains in force, that IBP did not breach the agreement and therefore is not liable to Nobian for any damages, and that only Nobian can determine, within a reasonable time and in
good faith, whether it prefers to terminate the agreement. Based on the Company's estimation, the arbitration award has no material impact on its Financial Statements. On April 30, 2021, Nobian filed a claim with the Spanish Court
for full enforcement of the arbitration award according to its understanding thereof. The Company believes that it is in compliance with the arbitration award. This is further demonstrated by the Company declaring completion of the
salt production facility on July 13, 2021. Despite Nobian's objection against the Company's announcement, the Company is of the opinion that all the necessary requirements for completion have been fulfilled. The Company believes
that the challenges Nobian poses, despite the Company's compliance with the arbitration award, provides the Company with further rights under its agreement with Nobian, including a right to terminate the partnership agreement and
accordingly, on July 23 2021, the Company notified Nobian of the termination of the agreement.
|
10. |
In accordance with the Company's policy regarding the periodic examination of the estimated useful life of Property, Plant and Equipment, in
the first quarter of 2021, the Company conducted an examination of the estimated remaining useful life of Property, Plant and Equipment at its facilities in Israel, which was
based on the Group's experience, level of maintenance and operation of the facilities over the years. According to the examination, it was found that following the increase in
maintenance activity and the implementation of operational excellence processes, the life expectancy of certain Property, Plant and Equipment is higher than their current
remaining useful life. Based on the assessment, the estimated useful life of the said assets was extended by 5-10 years, as of January 2021. The impact on the first half of 2021, is a reduction in depreciation expenses, with $16 million
in earnings and the balance of $9 million as a change in inventory value.
|
11. |
One of the Company's strategic goals is to achieve leadership positions in Brazil, a high‑growth
specialty plant nutrition market. On March 24, 2021, the Company entered into a definitive agreement to acquire Compass Minerals America Do Sul LTDA (Hereinafter - Compass Minerals), which includes the South American Plant Nutrition
business of Compass Minerals. On July 1, 2021, the Company completed the transaction for a total consideration of about $420 million, including Compass Minerals' net debt of about $107 million. The transaction may include a
performance‑based earnout of up to $18 million. Compass Minerals offers a broad range of solutions for plant nutrition and stimulation, soil treatment, seed treatment and plant health, covering all key Brazilian crops and as such, will
significantly expand ICL’s product portfolio and profitability, while providing further seasonal balance between the Northern and Southern hemispheres.
|
12. |
As part of the Company's strategy to expand the specialty fertilizer business and focus on growing markets, in January 2021, the Company
completed the acquisition of Agro Fertiláqua Participações S.A., one of Brazil's leading specialty plant nutrition companies, for a consideration of $122 million (before deduction of Fertiláqua's net debt of $40 million).
|
13. |
In April 2021, the Company entered into a definitive agreement with China Sanjiang Fine Chemicals Company Limited to sell Jiaxing ICL Chemical
Co. Ltd (ICL Zhapu), which is part of the Industrial Products segment, for a consideration of about $25 million. The transaction was completed in July 2021. As a result, in the third quarter of 2021, the Company will recognize a capital
gain of about $15 million.
|
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