Business in Brief: Israel Chemicals Profit Down, Cuts Dividend

Mazor shares surge on equity, marketing tie-up with Medtronic | Mizrahi Tefahot first-quarter profits rise 16% | Tel Aviv shares resume gains, led by drugs, energy

The Dead Sea Works potash fertilizer manufacturing plant belongs to Israel Chemicals.
Bloomberg

Israel Chemicals profit down, cuts dividend

Israel Chemicals yesterday reported lower quarterly profit and said it was cutting its dividend. ICL earned $85 million, or 7 cents per diluted share excluding one-time items in the first quarter, down from $193 million, or 15 cents, a year earlier as sales fell to $1.27 billion from $1.4 billion. The company had been forecast to record adjusted EPS of 9 cents on sales of $1.3 billion, according to Thomson Reuters I/B/E/S. Crop commodities prices declined further during the first months of 2016, weighing heavily on farmers’ decisions to take positions on fertilizer volumes, ICL said. For 2016 and 2017, ICL’s dividend would not exceed 50% of its adjusted annual net income, down from a prior 70%. “Our board has adjusted the company’s dividend policy to strengthen ICL’s financial position amid the volatile situation we are facing in the agricultural commodities market,” CEO Stefan Borgas explained. ICL shares fell 6.1% to end at 15.25 shekels ($3.97). (Reuters)

Mazor shares surge on equity, marketing tie-up with Medtronic

Shares of Mazor Robotics surged yesterday after Medtronic, the world’s largest maker of equipment to treat spinal conditions, agreed to buy up to a 15% stake in the Israeli company and help market its guidance system used during spinal surgery. Medtronic will buy newly issued stock equal to 4% of Mazor for about $11.9 million and will have an option to buy another 11% for another $40 million, Caesarea-based Mazor said. In addition, Medtronics will help promote Mazor’s next-generation system and develop additional products used during the procedures. It will buy 15 of Mazor’s new systems this year. If the joint marketing succeeds, Medtronic will take over sales and distribution for Mazor’s spinal products by the end of 2017. Financial terms weren’t disclosed. “New developments, such as synergistic implants, could generate new revenue streams for Mazor,” said Mazor CEO Ori Hadomi. Mazor shares soared 22.5% to finish the day at 25.25 shekels ($6.58). (TheMarker)

Mizrahi Tefahot first-quarter profits rise 16%

Israel’s top mortgage lender, Mizrahi-Tefahot Bank, yesterday reported a 16% rise in quarterly net profit due to a lower credit loss provision and higher financing income. Israel’s fourth-largest bank earned 288 million shekels ($75.1 million) in the first quarter, up from 248 million a year earlier and above the average 271 million-shekel forecast in a Reuters poll of analysts. Its provision for credit losses fell to 3 million shekels from 35 million in the first quarter of 2015, while net interest income increased to 760 million from 699 million. Mizrahi-Tefahot, which holds about a 35% market share in mortgage lending, said it would distribute a dividend for the quarter of 43.2 million shekels. The bank’s Tier I capital ratio, a key measure of its financial strength, rose to 9.65% at the end of March from 9.1% a year earlier. Shares of Mizrahi, the first of the big banks to report quarterly earnings, finished 2% up at 43.75 shekels. (Reuters)

Tel Aviv shares resume gains, led by drugs, energy

Tel Aviv shares turned higher after three sessions of losses, boosted by drug and energy stocks. The TA-25 and TA-100 indices both ended up about 0.8% at 1,410.36 and 1,221.36 points, respectively, as about 1.1 billion shekels ($290 million) in shares changed hands. Perrigo and Mylan led the pharma rally, both ending the session ahead 4.9% at 358.10 and 163.80 shekels, respectively, while volume leader Teva Pharmaceuticals added 1.8% to finish at 199 shekels. The Oil and Gas index advanced 1.4% to 904.16 after reports that Israel and Egypt were nearing a compromise on a dispute over natural gas. Avgol declined 4.9% to 4.15 shekels after it reported that first-quarter net plunged 74% to $2.4 million. After nine straight sessions of gains, SodaStream pulled back to finish down 3.2% at 72.52. In foreign currency trading, the dollar extended its gains, strengthening 0.45% to a Bank of Israel rate of 3.850 shekels. (Shelly Appelberg)