Q3 2024 ICL Group Ltd Earnings Call
Speaker Change: 8th равно, 15avo Raviv Zoller, Peggy Tharp, Aviram lazım Zoller Aviram Zoller, Peggy Tharp, Zizek Ariel, RAM Evelyn Dragıs, Evely, Peggy Tharp, Ra Viv Dechka Sucea, Zizek Magyars, Mari Edya Vladivostok Brigide, Hanson Jay
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Speaker Change: Good day, everyone, and welcome to the ICL third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session.
Speaker Change: You may register to ask questions by pressing the star and 1 on your telephone keypad. You may withdraw your question by pressing star 2.
Speaker Change: Please note this call is being recorded and I will be standing by should you need any assistance.
Speaker Change: It is now my pleasure to turn the conference over to Peggy Riley-Tharp. Please go ahead.
Speaker Change: Thank you. Thank you. Hello, everyone. I'm Peggy Riley Tharp, Vice President of Global Investor Relations for ICL Group. I'd like to welcome you and thank you for joining us today for our earnings conference call.
Speaker Change: This event is being webcast live on our website at icl-group.com and there will be a replay available a few hours after the live call and a transcript shortly thereafter.
Speaker Change: Earlier today, we filed our reports and presentation with the securities authorities and the Stock Exchange in Israel. And tomorrow, once the SEC EDGAR website reopens, we will do so in the U.S. Those reports, as well as the press release and our presentation, are available on our website as of this morning.
Speaker Change: Please be sure to review the disclaimer on slide 2. Our comments today will contain forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. These statements are based on management's current expectations and are not guarantees of future performance. The company undertakes no obligation to update any information discussed on this call at any time.
Speaker Change: We will begin with a presentation by our CEO, Mr. Raviv Zoller, followed by Mr. Ravih Hamnavaha, our CFO. After the presentation, we will open the line for the Q&A session.
Speaker Change: And I would now like to turn the call over to Raviv.
Thanks, Peggy, and welcome, everyone.
Raviv Zoller: I would like to begin by providing a brief update on the situation in Israel, which is now in its 14th month.
Raviv Zoller: We have continued to address the challenges caused by the war, including fluctuations in the number of reservists called to service and ongoing logistics-related issues.
Raviv Zoller: Now if you'll please turn to slide 3 for a brief overview of the third quarter results which continued the positive trend we saw in the first half of the year.
Raviv Zoller: Sales of $1,753,000,000 were up for the third consecutive quarter, while adjusted EBITDA of $383,000,000 was up for the fourth consecutive quarter.
Raviv Zoller: EBITDA was also up 11% on a year-over-year basis as EBITDA margin expanded from 19% to 22%.
Raviv Zoller: Throughout the first nine months of 2024, as always, we maintained our focus on cash generation. As a result, our free cash flow strengthened throughout the year, with a year-to-date free cash flow of 572 million dollars.
Raviv Zoller: Adjusted earnings per share has also improved every quarter this year and for the third quarter we delivered adjusted EPS of 11 cents up 10% on a sequential basis.
Raviv Zoller: In the third quarter, our specialties-driven business divisions, industrial products, phosphate solutions, and growing solutions reported a 37% year-over-year increase in EBITDA.
Raviv Zoller: For the third quarter, our Podash business division represented approximately 30% of total EBITDA versus nearly 50% in the same quarter last year.
Raviv Zoller: We continue to return value to our shareholders via our industry-leading dividend, and next month we will distribute another dividend payment of approximately five cents per share.
Raviv Zoller: We also maintain our focus on expanding ICO's innovative product pipeline across all of our specialties driven businesses during the quarter. In addition to our focus on strong cash generation, we continue to target cost savings and efficiency efforts as well.
Raviv Zoller: I would ask you to turn now to slide 4 and to look at both year-over-year and quarter-over-quarter trends for some key financial metrics.
Raviv Zoller: As you can see, we once again delivered quarter-over-quarter improvement across the board. Consolidated and adjusted EBITDA was up on both a quarterly and annual basis, and our specialties-driven business divisions achieved improvement in both sales and EBITDA versus both prior periods.
Raviv Zoller: Let's start with a review of our divisions and begin with our industrial products business on slide 5.
Raviv Zoller: For the third quarter of 2024, sales of $309 million were up 16% year-over-year. Over the same time frame, EBITDA increased 55% to $65 million.
Raviv Zoller: Even the margin of 21% improved versus 16% in the prior year, when the bromine market reached its bottom, driven by scale and efficiencies. In the third quarter, we continue to reap benefits from our efforts to gain market share in flame retardants, with higher volumes for both brominated and phosphorus-based solutions.
Raviv Zoller: Sales of clear brine fluids for use in the oil and gas industry decreased year-over-year due to a normal shift in the oil and gas drilling cycles in Europe and the Eastern Hemisphere.
Raviv Zoller: Specialty mineral sales increased year over year, driven by higher volumes for industrial applications and steady demand from the food and pharma end markets.
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Raviv Zoller: The new product pipeline, which spans from apparel to construction and into battery materials, is expected to benefit from an expansion into the North American energy storage supply chain.
Raviv Zoller: through a phosphorus compound for use in the production of LiPF6, a critical raw material for lithium-ion batteries.
Raviv Zoller: On slide 6, you will see our PODAS division results for the third quarter of 2024, with sales of $389 million and EBITDA of $120 million.
Raviv Zoller: Our average putout price was down $45 CIF per ton year over year, while total sales volume was down approximately 220,000 metric tons for the same time frame.
Raviv Zoller: As I mentioned earlier, at our Dead Sea operations, we continue to face intermittent challenges related to the war. We have continued to adapt to fluctuations in staffing and remain flexible in the face of shipping constraints, which present a challenge for ICL and other global companies.
Raviv Zoller: For 2024, we intend to limit our total annual put-out sales volumes to the 4.6 million metric tons, which have already been committed.
Raviv Zoller: This is similar to 2023 volumes and in anticipation of improving conditions in 2025. Turning to slide 7 in our Phosphate Solutions Division, where third quarter sales were $577 million.
Raviv Zoller: EBITDA of $140 million increased on a year-over-year basis while EBITDA margin expanded to 24% from 20%.
Raviv Zoller: In the quarter, growth in specialties market share more than offset lower prices related to a decrease in cost inputs.
Raviv Zoller: On a portfolio basis, we continue to expand into new and adjacent products in the food, industrial, and pharma end markets.
Raviv Zoller: On a regional basis, we saw continued growth at YPH, our joint venture in China, with increased demand for battery-grade phosphate.
Raviv Zoller: We are two months away from completing our Customer Innovation and Qualification Center in St. Louis, which will allow us to begin qualifying battery materials products for customers.
Raviv Zoller: This big step forward puts us in an optimal position for growth in the Western Hemisphere as it will allow us to prove our products at scale and strengthen our customer relationships.
Raviv Zoller: For our commercial OFP plant in North America, we continue to align our construction timeline and capital spend to match anticipated customer demand.
Raviv Zoller: Looking more globally, we are now selling specialty phosphate solutions to a battery customer in Argentina, and we're also looking at battery material partnership opportunities in Europe.
Raviv Zoller: In terms of commodity phosphates, prices firmed in the third quarter with tight stock positions in key markets.
Raviv Zoller: Turning to slide 8, and a growing solutions business division, where third quarter 2024 sales of $538 million were somewhat down year over year, while EBITDA of $64 million increased more than 70% for the same time frame.
Raviv Zoller: Even the margin of 12% expanded significantly versus the prior year, driven by efficiency efforts and improved product mix.
Raviv Zoller: Our strategy of offering innovative products targeted to meet regional needs continues to prove itself as we delivered our third sequential quarter of sales and EBITDA growth. In China, we recently signed a five-year agreement with one of the top agricultural distribution companies.
The agreement is valid at approximately $170 million.
Raviv Zoller: is for specialty water-soluble fertilizers, which have seen a substantial increase in demand in China. In North America, we have made good progress on the integration of custom ag formulators, a provider of liquid adjuvants, and enhanced nutrients, as well as various other specialty products. I would now like to wrap up with a few highlights on slide 9.
Raviv Zoller: While I'm pleased that we delivered sequential EBITDA improvement for the fourth consecutive quarter, our future growth relies on our passion to strive forward and to disrupt our own markets when necessary.
Raviv Zoller: This attitude has enabled us to continuously enhance our already robust product pipeline with innovative new solutions.
Raviv Zoller: Simultaneously we have worked to manage cost and drug efficiency efforts. There are no sacred cows at ICL and two additional small sites will close this quarter for efficiency considerations.
Raviv Zoller: We have also worked together to leverage opportunities across business segments and we will continue to do so as we look to target new and adjacent end markets through innovative product solutions.
One example of this is our battery materials business.
Raviv Zoller: We have the potential to leverage our expertise in a variety of ways and to expand our presence as a global leader in this space through new products and offerings.
Raviv Zoller: In North America, our Customer Innovation and Qualification Center is nearing completion, and we currently expect commercial production to begin in 2027.
Raviv Zoller: Another example of our dedication to innovation is Agmatics, our ag-tech digital startup, which was recently recognized by Fortune as one of the 10 companies that are changing the world, and was featured in an important scientific publication in Nature on regenerative agriculture.
Raviv Zoller: The new Region IQ platform helps agronomists and suppliers implement environmentally friendly crop strategies and enables them to tailor regenerative practices to specific crops and conditions.
Raviv Zoller: These are just two examples that demonstrate how ICO is working to improve lives and protect the planet, and neither would be possible without the hard work, dedication, and support of each and every ICO employee. To all of our team, I say thank you.
Speaker Change: And with that, I would now like to turn the call over to Aviram.
Aviram: Thank you, Raviv, and to all of you for joining us today. Let us get started on slide 11 and take a look at some key market metrics.
Speaker Change: Since we are a truly global company serving a variety of end markets, we look beyond fertilizer prices to a wider array of macro indicators.
Speaker Change: Starting with inflation, where the US and EU saw decreases in the third quarter, while China, Brazil and Israel also increased, which ranged from 20 to 60 basis points.
Speaker Change: Interest rates decreased versus the prior quarter in the US, EU, and UK, remained steady in Israel and India, and increased in Brazil.
Global industrial production was stable in the quarter.
Speaker Change: with improving trends expected into the next few quarters. On a sequential basis, housing starts ticked up slightly in the U.S. in both the second and third quarters this year.
Turning to slide 12 in Key Fertilizer Market Metrics.
Speaker Change: Across the board, grain prices ended the third quarter lower, while farmer sentiments significantly softened.
Speaker Change: However, data for October showed a surprising pre-election bounce in sentiment as farmers expressed some optimism that economic conditions will improve and that there will not be an extended downturn in the farm economy.
Potash and phosphate prices continue to diverge.
Speaker Change: with Potter prices maintaining their descent, while Foxer prices increased slightly versus the second quarter and significantly year-over-year.
Speaker Change: While ocean freight rates decreased in the quarter, reaching their lowest level since the third quarter of 2023, at ICL we continue to see higher overall logistical costs.
Speaker Change: On slide 13 you can see some key market metrics for energy storage and electric vehicles. While both are growing at roughly the same pace over the next few years, the most significant increase in demand is still expected later in the decade.
Speaker Change: As Raviv mentioned, in addition to our current North American battery materials project, which is aligned with our customers' current expected production timelines, we are also looking at battery material expansion opportunities in other regions.
Speaker Change: If you will now turn to slide 14 for a look at our third quarter sales bridges, on the left side you can see the year-over-year change for each of our business divisions, with Potash having an outside impact on the year-over-year decrease in sales, which came in at $1.8 billion.
Speaker Change: If you turn to the right side of the slide, you can see the impact of lower prices, especially for potash, and the effect exchange rates had on sales.
Speaker Change: In addition, due to one-time logistics adjustments, which will allow for greater flexibility of allocation between ports in Israel going forward, we deferred approximately 120,000 metric tons of potash sales volume to China.
Speaker Change: On slide 15, you can see the impact lower potash prices had on our third quarter 2024 EBITDA of $383 million. We were able to offset lower prices in general through higher quantities and lower raw material costs in our specialties-driven businesses.
Speaker Change: Turning to slide 16, you can see that even as product prices continue to decrease in the third quarter, ICL remains the leader in terms of average realized price. Once again, we maximize the profitability of our cost-efficient resources.
Speaker Change: Demand for potash is currently constructive due to soil replenishment needs and we are seeing some firming in the global market.
Speaker Change: On slide 17, I would like to remind you of ICL's leadership position in the global bromine market, while bromine prices
Speaker Change: have been under pressure for more than a year. The debt here remains the most cost-competitive source of roaming and accounts for approximately two-thirds of global supply capacity.
Speaker Change: If you turn to slide 18, you can see how our business breaks out on both a regional basis and business division. As a truly global company, we maintain solid foundations in Europe and North America, while participating in high-growth markets like Brazil, China, and India. As a truly diverse company, we are committed to providing the best value for our customers.
Speaker Change: Our four business segments serve a wide array of end markets from automotive to food and beverage to pharma and beyond.
Speaker Change: Before we wrap up I would like to share a few highlights on slide 19. We continue to prioritize cash generation and ended the quarter with available resources of approximately 1.7 billion dollars.
Speaker Change: Our cost savings and efficiency efforts are ahead of our expectations. Our net debt to adjusted EBITDA rate at quarter end was 1.2 times and S&P recently reaffirmed our BBB minus rating with a stable outlook.
Speaker Change: And, of course, we are once again distributing 50% of adjusted net income to our shareholders in December. We will pay out $68 million as a dividend to our shareholders, keeping our trailing 12-month dividend yield at 4.6%.
Speaker Change: Finally, if you will turn to slide 20, I would like to update you on our 2024 guidance.
Speaker Change: So our specialty is driven business division, which includes industrial products, growing solutions, and phosphate solutions.
Speaker Change: We now expect EBITDA to be between $0.95 to $1.05 billion in 2024. This is up on previous guidance of $0.8 to $1 billion.
Speaker Change: As Raviv mentioned earlier, for 2024 we intend to limit our total annual potash sales volumes to 4.6 million metric tons, which is in line with 2023 volumes and in anticipation of improving conditions in 2025.
Speaker Change: We continue to expect our effective tax rate for 2024 to be approximately 28%, which was our rate in the third quarter.
And with that, we can begin the Q&A.
Speaker Change: Thank you. At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad.
Speaker Change: You may withdraw your question at any time by pressing star 2.
Speaker Change: Once again, to ask a question, please press the star and 1 on your telephone keypad.
Speaker Change: We'll take our first question from Rahi Parikh with Barclays, please go ahead, your line is open.
Speaker Change: Hi everyone and congrats on the results. I'm obviously coming in for Ben. Thank you.
Speaker Change: And the first question that we have is do you have any preliminary especially outlook for 2025 given that 2024 is coming together much better than initially anticipated? I have a follow-up for after that.
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Speaker Change: Okay, so as you can imagine, first of all, hi, how are you? And I hope you get the touch base. We have, yeah, we do have preliminary thoughts about 2025. It hasn't filled up.
That's the budget for 2025.
Thank you very much.
Thank you very much.
Speaker Change: On industrial products, as you know, a lot of it depends.
on the market side and the demand.
that's going to sum up, we believe...
that during the year demand should be picking up.
Speaker Change: We are not waiting for the demand, as you know, we are supplying basically at full steam, but this should drive...
prices up, and finally, on the growing solutions side...
We are hopeful that we continue the very positive journey.
which we embarked upon in 2005.
Thank you very much.
Anything I missed, Aviv? No, it looks perfect. Okay.
Speaker Change: So that's 25, and of course, once we have a better picture, as always, we find a way to share it and we put it there.
Speaker Change: culminating the guidance that obviously we will give when we come out with Q4 and 24. We will also, of course, give the guidance for 25 as we did in the previous two years.
Okay, thanks Aviram. And then also just on geopolitics...
Speaker Change: Do you see, is the impact still just on increased shipping costs, or are there issues getting tons out in the area? And then what's your take on the Belarus notion to cut 10% of production? Thanks so much.
Thanks for watching!
Okay, so thanks for the question.
Speaker Change: Geopolitics, of course, nobody has a crystal ball, but the main issue for us is logistics and shipping.
instead of two.
Speaker Change: That has a certain cost to it. We saw, if you look at the bridge of quarter versus quarter last year, there was an increase of $13 million in transportation costs.
Speaker Change: So a huge chunk of that has to do with the adjustment to move out of one port. So we're hoping, of course, that in the coming months...
Speaker Change: things will work out to the better and if we lose that
Speaker Change: We can actually ship all of our products from one port. It means that part of the adjustment that was made this year...
Speaker Change: was that we're shifting more to the Western Hemisphere than we did before, so...
Speaker Change: The negative is that we have less flexibility on our shipping destinations. The positive is that we get better, we actually got a better return from the Western Hemisphere. And given that the current situation is that
Speaker Change: We see that the price for the beginning of next year, when we sell product for January, we get a better return than the spot price. Then we prefer to defer product to any product left, which is not a whole lot.
to next year. So that's on geopolitics and transportation.
Speaker Change: In terms of the Bill of Russia, we don't really know.
Speaker Change: There were certain things said. There are a lot of rumors in the market that if things were said, there probably is reason for that. But we don't actually know. We do understand that the marginal price of shipping products from Belorussia to China by train
Speaker Change: is at its very low, which means there isn't any profitability there, or at least that's what we understand. So, if that's the case, then I guess the Belarusians have to do something.
and what exactly they do is the big question.
Speaker Change: But all in all, the trends in the Paras market look like prices are firming, the eastern prices are firming in all markets other than China, but inland China also looks like it's getting tightened.
Speaker Change: And Brazil, future sales are at a higher price than the spot sales, so...
Speaker Change: All in all, it looks like the potash market is firming. The only place where I don't know at this point is Europe. It's off-season and we don't see...
Speaker Change: Any particular demand, but in all other regions there is significant potash demand, given the need for soil replenishment. So things are looking good on the potash side, with or without Belorussian use.
Thanks for watching!
Awesome, thank you so much.
Thank you.
Speaker Change: Thank you. Our next question comes from Alex Jones with the Bank of America. Please go ahead. Your line is open.
Speaker Change: Great, thanks very much for taking my questions. Two if I can, the first on the guidance for the year and on specialties EBITDA, could you talk about what the sensitivity is within that range, the 100 million, sort of top to bottom and what would drive that to the bottom end or the top end please?
Speaker Change: And then the second question, specifically on industrial products. If I look at the pricing this quarter, it was sequentially improved, still down 6% year-on-year, but much better than the double-digit declines.
Speaker Change: you've reported in recent quarters. Is that indicative of a trend? Should we expect pricing to return you know positive into next year from what you're currently seeing in the market or any comments you have there would be helpful. Thank you.
Speaker Change: Which part of the business Alex is running? He does real products. Industrial IP. I'll start with the second question. I'm not sure that I heard the first question.
On industrial products, the price is relatively stable.
Speaker Change: There's a little bit of seasonality, like for now there's a little bit of price going up because of winter stoppage.
and Tim Smith.
Speaker Change: almost at full output. So I guess as long as we're at full output, there's no reason for too much price appreciation. Price appreciation will probably appear once demand strengthens on the electronic side.
Speaker Change: Real estate is going to take a little more, building real estate is going to take a little longer.
Speaker Change: I didn't actually hear the whole first question, so I'll pass it on to Aviram. I can do it. Hi, Alex, and thank you for the question. Basically, when we look at Q4, the way it is shaping up,
Speaker Change: In many ways it should be a similar quote, I'm talking Ibiza-wise now, to Q...
and the press.
Thank you.
All of them should be...
to some degree seasonally adjusted, not as strong as Q3.
Speaker Change: Differences are not that big, and if we do the math...
Speaker Change: and we've compiled Q4 to what we came out in the three quarters, this one that we are reporting today in hand, then we should be firmly in the territory of our new guidance.
Speaker Change: So what can drive it to the other side is results that will be somewhat better in the different markets, each of them with their own story.
Speaker Change: We feel pretty well with the guidance that we share with the market, which is definitely better than what we saw after Q2, that's also in the back of obviously the Q3, which we're coming out today, which is basically a good quarter.
Speaker Change: We normally tend to be, as you all know, quite conservative and we take extra care to fulfill our obligations to the markets of dairy products.
Speaker Change: And maybe just to add on the fourth quarter that typically the seasonality is right to the last moment. So, an industrial product, there's a real question on how December looks.
Speaker Change: and also growing solutions. Typically, at the end of the year, we see a drop in the strength of demand. So, we see typically Q4 is a little weaker than Q3.
[inaudible]
Also, that the ability to emerge of the pen.
Speaker Change: Thank you very much for your time, and I would like to make a quick note, which I will just remind you of, basically, the Brazilian market, which obviously in the second half of the year has a lot of importance in the Southern Hemisphere, of course, and Brazil is obviously so important from the agricultural point of view, but it's quite volatile. So I think, you know, adding to what Raviv said, a lot will be determined by how strong the market is. Brazil is the very end of the year, and that will be known, obviously, only in the early
Speaker Change: and the five, but we seem to be well on track.
Thank you.
Welcome. Thank you. Thank you.
Thanks for watching!
Speaker Change: Thank you. Our next question comes from Joel Jackson with BMO Capital Markets. Please go ahead. Your line is open.
Joel Jackson: Hi, good afternoon. I'm going to ask a few questions one by one.
Joel Jackson: Good morning or good afternoon. Can we talk about when you raised the specialties guidance for the year here to by about a hundred million dollars. Can you break that down?
Speaker Change: as much as you can between specialty phosphates, commodity phosphates, bromine, and potash, and specialty solutions, excuse me, not potash, but growing solutions. I have a hundred that have improved. Other businesses have improved by about a hundred.
Thanks for watching!
Speaker Change: Yes, so growing solution is going to be a little weaker than third quarter and industrial product is going to be a little weaker than third quarter like like we mentioned before because of seasonality.
Speaker Change: We don't want to break it. Sorry to interrupt, but what I'm saying is, over the full year, over the two quarters, Q3 and Q4, you've said it's 100 more. So I'm sort of asking across the second half of the year, not repeating the question the prior person asked about Q4, sorry.
Thanks for watching!
Speaker Change: Yeah, so again, on industrial products and growing solutions, we see fourth quarter being a little weaker than Q3.
and phosphate solutions will be relatively similar to...
Speaker Change: We look at the best alternative at the time of year.
Speaker Change: The year still has almost two months to go so it's too early to break them up.
Speaker Change: Maybe I could ask it differently. Versus three months ago, between going solutions, Fawcett, and IP, which business has surprised you most to the upside?
Thank you. Thank you. Thank you.
Thanks for watching!
Speaker Change: I think that this surprise that we got, some of them were a surprise, the surprise was unfortunate.
Speaker Change: both the commodities and the specialty side without going into the breakdown there.
Speaker Change: I'm not sure it surprised us, but what we are getting more and more confident with and happy with is what's going on on the agricultural side in the company.
The strategy basically has always been there.
Speaker Change: to differentiate and to go the specialty fertilizer side, to go the biostimulant, the tetra side, and it is working.
Speaker Change: And we see that we are getting a healthy margin, and that is a, I'm not sure it's a surprise, Joel, but we're very happy with it. On the industrial product, basically, we also had a good quarter.
And this is as we know now.
Speaker Change: We are supplying obviously at high capacity, but the selling prices are nowhere near. But notwithstanding that, we were able to deliver a solid quarter. I'm not sure it surprised us, but we were happy with it.
Speaker Change: So there you have it, basically the three. If I sum up, it's the three decisions that made this better, and I think it's a highlight of the course in itself.
Speaker Change: That's helpful. And my final question is, you know, in your release and presentation, you use language like you intend to limit total potash sales this year to 4.6 million tons in expectation of improved conditions.
Speaker Change: Now, if I look at your last four quarters of production, you've done about 4.5 million tons, the run rate is lower than the first three quarters of 2024.
Speaker Change: So it looks like, you know, you don't have the production to do more than 4.6. You said, in expectation of improved conditions. What does that mean? Are you talking about, oh, you're holding back volume to get better price next year, though we just talked about what the production's been. Is this improved conditions in logistics?
Speaker Change: I'm just trying to understand what the exact message you're putting out there today in terms of production, sales, and anything you want to talk about.
Speaker Change: So the message is simple. Currently, we're capable of producing about 4.65 this year, and we're capable of selling about 4.75. But at this point, it doesn't make sense to sell any more than we've already committed.
Speaker Change: The reason is twofold. One is because prices are firming for next year, so we actually have already sold
Speaker Change: for January and February. And second is that due to the current logistic challenges, we feel that if we can defer sales, certain sales, we can get better transportation costs.
Speaker Change: Hopefully, if the security situation improves. If it doesn't improve, then it's only the pricing.
which are very significant.
Just so you understand, in order to...
in order to transport to the east.
Speaker Change: In some cases, it costs double if we send the product out of the port that is further from the plant.
Speaker Change: So it makes sense from both of those perspectives, and at a certain point we decided to stop. And actually part of the fact that we're stopping...
Speaker Change: In the past year or so, because of a lot of people being on reserve duty, then we have to take some calculated risks and do less preventive maintenance, and you can't keep on going that way for a long time without paying a dear price.
Speaker Change: So we took some preventive, preventing steps this year, this, this year, this quarter. It's actually not this quarter, it's September and October. And due to that, our maximum production for this year could be a little over 4.6.
Speaker Change: It was more than that a little while ago, but we're comfortable with what we did because we sort of cleaned up everything that needed to be done in order to Minimize the risk going forward. Hope that answers
Thank you.
Thank you, Joe.
Speaker Change: Thank you. We will move next with Kevin Estock with Jeffreys. Please go ahead, your line is open.
Speaker Change: If you're not a good man, you're not a good man.
Speaker Change: Hi. Good morning, good afternoon, everyone. I guess with respect to the innovation platform, I'm just curious what your guys' appetite may be for investing in white spaces. So for example, if the EU goes forward with allowing gene editing for fruits, vegetables, et cetera, I guess could ICL get into that space as a way to maybe hedge risk on improvements in nutrient efficiency?
Speaker Change: I guess you're appetite in investing in white spaces, so if you move forward in like gene editing, right, for fruits, vegetables, wheat, rice, etc. Just wanted to know if you guys would invest in those areas, basically to hedge the risk against, you know, increasing nutrient efficiency.
So, okay.
Speaker Change: I'll try to answer you and I'm taking it a little bit bolder than you meant, so you will keep me in line. So basically, as you know,
Speaker Change: Starting from the near set-up of the growing solutions, it's our flag to be innovative and to differentiate ourselves. That's a given.
Secondly, we are investing...
in the areas that we believe...
that will be...
significant or very significant
Speaker Change: in the future of agriculture, and that's obviously the area of the biological salmon delivery systems and better uptake inside the plant, etc.
Speaker Change: However, and that's the thing, however, what we do is apply R&D.
We are taking gradual steps to build up the portfolio.
what we are not doing.
is that to do leak probes.
Speaker Change: and go into areas which today are really exploratory. And we will come into, I guess, we will come into these areas, but we are stressing the limits of 3GS, but we are not going into things which are today quite remote from the core of our essence.
Speaker Change: And that's why, if I'm understanding correctly, you're talking about white spaces.
Speaker Change: It's really, really going to the forefront of inter alia gene editing.
Speaker Change: and things like that, which I know from my past that companies have gone into, but it's a...
I would say it's in the clinical space.
Speaker Change: It's not as advanced obviously as the pharma world and the long answer to a short question was we are careful to build block after block in our innovation and not jump too far ahead that we don't have to pull together yet.
Speaker Change: Understood, thank you, yeah that was helpful, yeah I appreciate it.
Speaker Change: And I guess, apologies if you've covered this already, but I guess in your term, do you guys have a sense of how much Chinese bromine capacity has exited the market, if any?
Thank you.
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Speaker Change: We think we think very little has actually completely exited but there's quite a lot of production tons that are muted now so it could be a matter of time until some exits.
Speaker Change: So the answer is, there's about, I'd say all in all, about 60 to 70,000 been muted so far. But in terms of bankruptcies or actually companies leaving the market, probably about 15,000 tons so far.
for the show.
So, I'll have a...
Thank you.
Speaker Change: And we have such a great cost position, which is superior to everybody else, and there's a limit of time and there's a limit of prices that those Chinese can sustain. That's exactly the strategy that we're deploying, and you see the results.
Thank you very much.
Thank you.
Speaker Change: Thank you and we show no further questions at this time. I will turn the call back to Raviv Zoller for closing comments.
Raviv Zoller: Okay, so thank you very much for joining us for our conference call for Q3.
Raviv Zoller: I want to thank ICL employees for their great contribution to Flying Quarter.
Raviv Zoller: We're very positive about the way we're positioned for future growth now, with the markets looking the way they are, and hopefully when the geopolitical constraints go away, we're ready to take off. So looking forward to reporting back to you on fourth quarter results and full year results.
Raviv Zoller: Thank you very much for joining us today and have a great rest of the day.
Thank you.
Speaker Change: And this does conclude today's program. Thank you for your participation. You may disconnect at any time.
The End
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Okay, we are clear.
Thank you for watching!
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Interviewed 거참 ██████████ o.rando.tx.go.ahead
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Speaker Change: Hardy Venlo, Steve Dennis, Peter Cernovec, Pedro Rodriguez, K scrolling open Bolivia Bonita, John Munder, Boris Schnitzle, Steve Daitz, Shelton Budd, Groupon Records, Bob Antic, Wynn's, fifte, lenny, T mine.