MIRA
INFORM REPORT
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Report Date : |
09.01.2007 |
IDENTIFICATION
DETAILS
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Name : |
DEAD SEA WORKS LTD. |
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Registered Office : |
P.O. Box 75 (84100), 1 Kreitzer Street, Potash House, Beer Sheva 84894 |
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Country : |
Israel
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Financials (as on) : |
31.12.2005 |
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Date of Incorporation : |
1930 |
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Legal Form : |
Public Limited Liability Company |
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Line of Business : |
Producers, manufacturers, exporters and
marketers of potash and other chemicals from the Dead Sea. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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Status : |
Satisfactory
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
name
DEAD SEA WORKS LTD.
address
P.O. Box 75 (84100)
1 Kreitzer Street, Potash House
BEER SHEVA 84894 ISRAEL
Telephone 972 8 646 51 11
Fax 972
8 646 55 09
HISTORY
A public limited liability company, incorporated as per file No. 52-001937-3 on the 26.6.1952, continuing activities which originally began in 1930.
At a later date subject published a prospectus offering shares to the public.
In March 2000 following a successful tender offer for subject’s shares published by its parent, ISRAEL CHEMICALS LTD., the latter gained full control of subject, and consequently, subject’s shares were de-listed from the Tel Aviv Stock Exchange.
SHARE CAPITAL
Authorized share capital NIS 650,000,000.00, divided into - 1 special share,
649,999,999 ordinary shares, all of NIS 1.00 each, of which shares amounting to NIS 309,093,149.00 were issued.
SHAREHOLDERS
Subject is a fully owned by ISRAEL CHEMICALS LTD. (hereinafter ICL), a public limited liability company whose shares are traded on the Tel Aviv Stock Exchange, of the ISRAEL CORP. LTD. Group, controlled by the Ofer Bros.
In 1999 the OFER BROS Group acquires the ISRAEL CORP. LTD. which controls subject (via ICL).
In March 2000, ICL gained full control of subject, after it purchased 10.8% of subject’s shares from the public, in consideration of NIS 584 million.
The one single special share is held by the State of Israel (given the fact subject holds rights on Israel national resource).
DIRECTORS
Yossi Rosen - Chairman of ICL and CEO of THE ISRAEL CORP.,
Akiva Moses - Chairman of subject and CEO of ICL,
Eli Amit - CFO of ICL,
Gilad Shavit,
Alexander Paz,
Moshe Vidman,
Haim Erez,
Ehud Buch,
Shlomo Maoz,
Amir Makov,
Avisar paz,
Yossi Lastigson,
Avi Deutchman,
Yehoshua Gold.
GENERAL MANAGER
Asher Greenbaum.
BUSINESS
Subject is part of ICL FERTILIZERS Division in the ICL Group, which is the largest division in ICL. Producers, manufacturers, exporters and marketers of potash and other chemicals from the Dead Sea.
Potash is extracted from the Dead Sea in the largest solar evaporation pond array in the world, and is also mined in Spain and England.
Subject holds the rights from the State for mineral production from the Dead Sea. Over 90% of sales are for export, to over 60 countries worldwide.
Operating from large premises near the Dead Sea and offices in Potash House, 1 Kreitzer Street, Beer Sheva and from large potash plants in Spain and the UK. Also operating from offices of subsidiaries and affiliated worldwide.
Having several thousands employees. There are 9,470 employees serving the ICL Group.
MEANS
Financial data is included in the consolidated B/S of parent company, ISRAEL CHEMICALS LTD., which shows:
ASSETS 31.12.2005 30.09.2006
Current
Assets:
Cash and cash equivalents 57,236 53,963
Investments, deposits and short term
loans 58,767 70,049
Customers 503,446 480,750
Other debtors 115,382 164,673
Stock __652,521 __748,670
1,387,352 1,518,105
Long
term investments and debit balance 89,297 109,687
Fixed
assets (net) 1,661,936 1,668,692
Other
assets and deferred expenses (net) __185,357 __179,692
3,323,942 3,476,176
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LIABILITIES
Current
Liabilities 897,130 914,531
Long
term liabilities 926,321 917,193
Minority
rights 7,747 9,109
Equity 1,492,744 1,635,343
3,323,942 3,476,176
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ICL’s current market value US$ 7,626.4 million.
Subject is an “Approved Enterprise”, and as such enjoys State benefits and tax incentives.
In November 2000, the Investment Center Administration approved investment plans of subject and sister company DEAD SEA BROMINE, for the sum of US$ 140 million.
The investment Centre has also approved subject's plan to establish an Aluminum Chloride plant in Sodom (estimated investment US$ 7 million).
In December 2003, the Investment Center Administration approved a further US$ 14 million investment plan in the expansion of subject's plant.
There are 2 charges for unlimited amounts registered on the company's assets, in favor of the State of Israel and CRYSTAL PURCHASING LTD.
ANNUAL SALES
Subject pays royalties to the State of Israel as part of the rights given for mineral production from the Dead Sea.
Subject ended 2000 with a net profit of NIS 69,726,000.
Subject ended 2002 with a net profit of US$ 35,950,000.
Subject ended 2003 with a net profit of US$ 102,776,000.
Subject ended 2004 with a net profit of US$ 179,295,000.
Subject ended 2005 with a net profit of US$ 260,423,000.
Subject's sales comprise around two thirds of ICL FERTILIZERS Division. Sales of potash in 2005 were little over US$ 1,000,000,000, with operational profit of US$ 333,000,000.
ISRAEL CHEMICALS LIMITED
Consolidated Statement of Income
US$
(thousands)
Year
ended 31.12
2003 2004 2005
Sales 2,270,906 2,714,955 2,986,001
Gross profit 712,757 937,050 1,140,653
Operating income 210,688 354,368 561,329
Income before taxes on
income 126,971 309,455 514,272
Net income 103,077 250,503 422,173
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Consolidated ICL sales for the 3 quarters of 2006 US$ 2,418,533,000 (a 9.4% increase compared to the parallel period in 2005), making a gross profit of US$ 842,246,000, an operating income of US$ 388,722,000 and a net profit of US$ 283,695,000.
OTHER COMPANIES
Subject’s
subsidiaries:
ASHLEY CHEMICALS (HOLLAND) B.V. 100%
IBER POTASH S.A., Spain, 100% owned by the a/m
ASHLEY CHEMICALS LIMITED – U.K., 100%
POTASH TECHNOLOGY INDUSTRIES LTD., 100%
POTASH TECHNOLOGY INDUSTRIES B.V., Holland, 92.5%
SINO ISRAEL KINKAY POTASH CO., 33.33%
CLEAVLAND POTASH LIMITED, UK
Also
part of ICL FERTILIZERS Division:
ICL FERTILIZERS MARKETING LP,
FERTILIZERS AND CHEMICALS LTD., manufacturers, marketers, exporters of nitrogen and phosphorus fertilizers, industrial chemicals, feed additives, etc.
ROTEM AMFERT NEGEV LTD., manufacturers,
exporters and marketers of sulphate acid, phospate acid fertilizers and allied
goods, cast mining of phosphates, food additives, etc.
AMSTERDAM FERTILIZERS B.V., The Netherlands,
ICL FERTILIZERS EUROPE (EUROCIL B.V.), the marketing arm in Europe,
ICL FERTILIZERS (INDIA) PRIVATE LIMITED, India,
P.M. CHEMICALS SRL., Italy,
RANTHAI AGRO CO. LTD., Thailand,
ROTEM BKG LLC, USA.
Other
companies part of the ICL Group:
ICL FINE CHEMICALS LTD.,
DEAD SEA MAGNESIUM LTD.,
DEAD SEA BROMINE CO. LTD. and subsidiary BROMINE COMPOUNDS LTD., manufacturers, exporters and marketers of bromine compounds extracted from the Dead Sea (the world’s largest bromine source),
PAMA LTD.,
NEGEV INDUSTRIAL MINERALS LTD.,
MIFALEI TOVALA LTD.,
I.D.E. TECHNOLOGIES LTD., 50%,
And many others, including companies in the ICL Group and THE ISRAEL CORP. concern.
BANKERS
The
ICL Group is known to all local bankers. Among others, working with:
Mizrahi Tefahot Bank Ltd., Beer Sheva Business Center Branch (No. 426), Beer Sheva, account No. 53596.
A check with the Central Banks' database
did not reveal anything detrimental on subject’s a/m account.
CHARACTER AND
REPUTATION
In March 2001 CONTRAC LINE filed a lawsuit to the Tel Aviv District Court against subject for compensation sum of NIS 223 million, due to damages and loss of profits that subject caused while violating patent rights. The dispute is more than 10 years long.
In November 2005, it was reported that both sides reached an agreement.
Apart of that, nothing unfavorable learnt.
Subject is the world's 4th largest potash manufacturer.
Parent ISRAEL CHEMICALS LTD. is one of the largest companies in Israel.
The OFER BROS Group, which subject is part
of, is one the largest and most influential groups in the Israeli market.
Subject is ISO 9001:2000, ISO-18001 and ISO-14001 certified.
Subject was declared monopoly in Israel for part of its products.
In 1998 subject acquires control of Spain's potash production plants and establishes IBERPOTASH.
In September 2000 the Board of Directors of ICL decided to form a joint management to subject and ROTEM AMFERT NEGEV LTD. (also a subsidiary of ICL), since both companies operate in similar fields.
The Board of Directors also approved the merging of the marketing, conveying and storage activities of the 2 companies. According to ICL’s management, this unification saved US$ 40 million in the 2 companies' expenses in 2001.
The unification was completed in August 2001. The unification was named ICL FERTILIZERS.
During the first half of 2002, as part of
the reorganization process, ICL transferred all its shares in FERTILIZERS AND
CHEMICALS LTD. to ROTEM AMFERT NEGEV LTD.
In December 2001, ICL FERTILIZERS acquired
CLEAVLAND-POTASH, England’s sole potassium manufacturer, for a sum of US$ 45
million (the acqusition completed in 2002). CLEAVLAND-POTASH’s annual sales
were US$ 128 million.
During 2003, ICL completed a
reorganization, according to which all activities are divided under 4
divisions: ICL FERTILIZERS, ICL INDUSTRIAL PRODUCTS (which includes the DSBG
Group), ICL PERFORMANCE PRODUCTS and ICL METALLURGY.
In March
2003, it was reported that subject submitted a request to erect a private power
station, in an investment of US$ 400 million.
In April 2004, it was reported that ICL
intends to list its shares for trading on the New York Stock Exchange, and to
raise US$ 150-200 million.
In
August 2004, it was reported that subject signed a 5 year deal to acquire fuel
and oils from SONOL, for a sum of US$ 300 million.
In september 2005, ICL signed a deal to
acquire all activities and assets of ASTARIA of the USA, for a sum of US$ 255
million.
In recent year subject begun exporting potash to China, a market with strategic potential. After several delays due to prices controversies, subject signed in July and September 2006 supply contracts for rest of 2006 and for 3 years (2007-9). The later contract is for supply of 2 million tons of potash, representing a 30% increase in amount supplied.
Also in these months subject signed a contract to supply India over 800 thousands tons of potash from August 2006 to April 2007.
According to the Chairman of the Chemical, Pharmaceutical and Environment Division at the Industrialists Association, total sales of the branches in 2006 witnessed a remarkable 12.6% growth to US$ 17.4 billon, after in 2005 sales increased by 10% from 2004.
2006 exports of the branch were US$ 8.8 billion (some one third attributed to the chemical industry), a 15.7% increase from 2005, and sales to the local market reached US$ 8.6 billion, a 10% increase from 2005.
The chemical and pharmaceutical industries are the 2nd largest export branch (after the hi-tech) and comprise 30% of Israel’s industrial exports. The industry employs 28,700 employees.
Purchasing abroad amounted to US$ 1.5 billion in 2006.
SUMMARY
Good for
trade engagements.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
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NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
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