ICL Group Ltd. — 2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing; the supplied text does not provide a clear set of Q4-only financial results. Financial statements are audited and prepared under IFRS, in U.S. dollars.
Business context
ICL is an Israel-based specialty minerals and chemicals company operating four segments: Industrial Products, Potash, Phosphate Solutions and Growing Solutions. Its operations span minerals, fertilizers, food ingredients and industrial products. The company reported 1.289 billion ordinary shares outstanding at year-end. Israel Corporation held approximately 43.16% of ordinary shares and 43.98% of voting rights.
Financial results and liquidity
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Sales | $10.015 billion | $6.955 billion | +44% |
| Gross profit | $5.032 billion | $2.611 billion | +93% |
| Operating income | $3.516 billion | $1.210 billion | +191% |
| Net income attributable to shareholders | $2.159 billion | $783 million | +176% |
| Basic earnings per share | $1.68 | $0.61 | +175% |
| Operating cash flow | $2.025 billion | $1.065 billion | +90% |
Calculated from reported figures, gross margin was approximately 50.2%, operating margin 35.1%, and net margin attributable to shareholders 21.6%. Management’s non-IFRS adjusted operating income was $3.509 billion, versus $1.194 billion in 2021; adjusted net income attributable to shareholders was $2.350 billion, versus $824 million. These measures are not substitutes for IFRS results.
Cash and cash equivalents were $417 million, with $91 million in short-term investments and deposits, for $508 million in combined cash, investments and deposits. Total debt and debentures, including current maturities and lease liabilities, were $2.824 billion; reported net financial liabilities were $2.316 billion. The company also had $748 million of unused long-term credit facilities and a $300 million securitization facility, of which $233 million was utilized. Management stated liquidity was adequate for expected requirements over the next 12 months. Total assets were $11.750 billion, total liabilities $6.037 billion and total equity $5.713 billion.
Cash used in investing activities was $754 million and cash used in financing activities was $1.303 billion. Cash capital expenditures were $603 million; operating cash flow less cash capital expenditures was approximately $1.422 billion. Dividends paid to shareholders were $1.166 billion. The annual report lists dividends declared per share of $0.91; its financial-statement dividend table reports $0.90 distributed per share during 2022.
Segments and material changes
| Segment | 2022 sales | 2022 operating income | Change in operating income vs. 2021 |
|---|---|---|---|
| Industrial Products | $1.766 billion | $628 million | +44% |
| Potash | $3.313 billion | $1.822 billion | +357% |
| Phosphate Solutions | $3.106 billion | $777 million | +164% |
| Growing Solutions | $2.422 billion | $378 million | +180% |
Results benefited chiefly from higher selling prices, particularly for potash and phosphate products, and from continued demand and pricing strength in several specialty businesses. Potash segment operating income rose sharply, with reported CIF potash price increasing to $682 per tonne from $356. Price increases were partly offset by higher raw-material, energy and transportation costs, foreign-exchange effects and, in some businesses, lower volumes. Sales also included contributions from the Brazilian plant-nutrition businesses acquired in 2021.
Net income included $1.185 billion of income tax expense, compared with $260 million in 2021. The 2022 amount included prior-year charges following a settlement with Israel’s Tax Authority on the natural-resources surplus profit levy; the company disclosed $188 million of related prior-year tax expense in the settlement discussion. Adjusted tax expense was $987 million and the adjusted effective tax rate was 29%, compared with 19% in 2021. Government takes paid to Israel rose to $1.488 billion from $507 million.
Outlook, risks and unusual items
- Trading outlook: Management described weaker demand and economic momentum as likely to continue into the first half of 2023. Fertilizer prices softened in the second half of 2022 as affordability concerns, inventory accumulation and lower demand weighed on markets. The filing does not provide numerical company-wide earnings guidance.
- Growth projects: ICL plans a U.S. lithium iron phosphate cathode-material plant in St. Louis, targeted to operate by 2024. A $197 million government award was disclosed, subject to completing negotiations with the U.S. Department of Energy. In China, battery-material production capacity reached 130,000 tonnes annually across two plants.
- Permits and reserves: The Dead Sea concession expires March 31, 2030, and its renewal is uncertain. Rotem Israel’s phosphate concession runs through 2024; existing phosphate reserves there are described as limited to a few years, and future operations depend on approvals, permits and viable alternative resources. The company states it expects to obtain needed approvals, but cannot assure success or timing.
- Environment and operations: Rotem’s air-emissions permit was due for renewal in September 2023, and the company reported difficulty meeting schedules for some required projects. The company estimated environment-related spending of approximately $191 million in 2023. Dead Sea operations also face salt-harvesting, water-level, sinkhole and infrastructure risks.
- Legal and unusual items: A settlement related to the 2017 Ashalim Stream incident was signed in December 2022, for approximately NIS 115 million (about $33.5 million), subject to court approval. The company disclosed multiple pending environmental and other proceedings; several have no recorded provision because outcomes are difficult to estimate. A separate June 2022 brine seepage event near the P-9 feeder canal was being remediated; management expected no material financial-statement impact.
- Other risks: Commodity-price cycles, raw-material and energy costs, foreign exchange and interest rates, supply-chain and shipping disruptions, labor disputes, environmental regulation, climate impacts, and geopolitical risks—including instability in Israel and the region—could affect results and liquidity. The company’s dividend policy permits distributions of up to 50% of adjusted annual net profit, but dividends are discretionary and not guaranteed.
Most important facts for investors to verify
- Reconcile 2022 cash, debt and net financial liabilities with the audited statements, including the treatment of lease liabilities and securitized receivables.
- Assess the sustainability of unusually strong fertilizer pricing and margins, and the effects of lower demand, inventory and input costs after 2022.
- Track renewal and compliance milestones for the Dead Sea concession, Rotem phosphate operations and Rotem emissions permit, alongside reserve and alternative-resource updates.
- Confirm the final cost, timing, funding and operational progress of the U.S. battery-material project, including the conditions attached to the $197 million award.
- Review court approval and payment of the Ashalim settlement, developments in other environmental claims, and the outcome of the water-fee petitions.
- Compare declared dividends with cash distributions and the stated policy; confirm that leverage, covenants and investment plans support future payouts.