ICL Keeps 2026 Guidance Despite $100M Cost Hit, Sulfur Squeeze

ICL Group posted stronger second-quarter sales and earnings, but the numbers that matter to traders are the ones behind the headline. The fertilizer and specialty-chemicals company reported a 17% revenue increase to $2.1 billion and a 28% adjusted EBITDA gain to $448 million. Adjusted net income rose 35% to $149 million, or $0.12 a share. Operating cash flow hit $290 million, up 8%.

Those figures reflect higher prices for potash, bromine and phosphate products. But the costs to produce them are climbing faster than the market may have priced in.

CFO Asaf Alperovitz told analysts sulfur spot prices surged 72% sequentially in the second quarter and more than 210% year over year. Ocean freight rates rose 45% during the quarter as Middle East disruptions hit shipping lanes. The company absorbed roughly $100 million in higher raw-material costs and more than $40 million in foreign-exchange headwinds.

Despite that, management held its 2026 consolidated EBITDA guidance at $1.5 billion to $1.7 billion. ICL expects phosphate sales volume of 4.5 million to 4.7 million metric tons and an adjusted annual tax rate near 30%.

CEO Eyal Aharonson said the company secured sulfur supplies through the third quarter and into early October. He told analysts ICL does not plan to cut production at its Rotem or China operations. But he acknowledged that sulfur consumption costs will rise from the first half as the company works through higher-cost inventory. That creates margin pressure in phosphate products, the company's largest segment by revenue at $722 million.

Phosphate Solutions sales grew 13%, but EBITDA increased only slightly to $136 million. Higher phosphate prices only partly offset the raw-material inflation. Specialty food phosphate sales rose on pricing and volume gains from customers in China and India, the company said.

Industrial Products posted the strongest quarterly performance since late 2022, with sales up 30% to $440 million and EBITDA surging 88% to $130 million. Aharonson attributed the gains to higher bromine prices and increased volumes. Bromine-based flame retardants benefited from improved electronics demand. Phosphorus-based flame-retardant sales were stable amid muted construction activity.

Potash sales rose 22% to $468 million, with EBITDA up 34% to $154 million. ICL's average potash price was $376 per ton on a CIF basis, up 13% year over year and 4% sequentially. Production volume rose 11% to 1.058 million metric tons. Management credited process optimization and cost reduction.

Growing Solutions posted a 12% sales gain to $605 million, but EBITDA declined. The segment faced higher nitrogen and sulfur costs, plus geopolitical tensions and supply-chain volatility. Aharonson said Brazil, which represents about one-third of the Growing Solutions business, remained soft. Performance improved in May and June after a difficult April, but he told analysts the third quarter in Brazil is not expected to be as strong as in past years. The company has not seen reduced consumption on the commodity fertilizer side.

ICL plans to restructure its reporting segments starting in the first quarter of 2027. The new framework will have four divisions: Nutrition Solutions, Industrial Products, Growing Solutions, and Essential Minerals. Aharonson said the reorganization is meant to sharpen the focus on growth areas like specialty crop nutrition and specialty food, and to give investors clearer visibility into each unit's performance.

The company also launched the Elevate program, a cost-transformation initiative targeting more than $150 million in annual EBITDA improvements by the end of 2027 and more than $350 million annually by the end of 2028. Management expects 50% to 60% of the gains to come from productivity and operational efficiency, 30% to 40% from reduced external spending, and 10% to 20% from SG&A cuts.

ICL ended the quarter with $2.2 billion in available cash resources and net debt to adjusted EBITDA of 1.5 times. The company completed an $800 million senior-notes offering and declared a $75 million quarterly dividend, representing 50% of adjusted net income.

The stock carries an Alpha Score of Unscored and trades on the New York Stock Exchange under the ticker ICL. For more detail, see the ICL stock page.