Israel Chemicals revealed a tangible benefit to investors from the revival in fertilizer markets, announcing a special dividend of $500m as it unveiled a 58% jump in first quarter earnings.

The phosphate and potash group said that the dividend, which would be paid in June alongside a regular dividend, would "create a desirable debt-to-equity ratio and an appropriate return to its shareholders".

Nonetheless, the payout would not prevent the company from pursuing a "material" acquisition should a target arise, "as it has material amounts of unused credit sources".

The announcement came as ICL followed North American peers in unveiling a revival in profits, driven by a steep rebound in volumes from last year, when tight credit and low crop prices prompted farmers to scrimp on applications.

'Lively Brazil

This year had "signalled a trend to increasing demands" for US applications, and a "positive continuation" of demand in India, where ICL in March won a one-year contract to supply 1.43m tonnes of potash at $370 a tonne.

"Lively" demand for potash and phosphate in Brazil "portend a good year" in the key South American market, while the European market was showing signs of recovery after being hit hard by the 2009 downturn.

Indeed, a recovery in takings in Europe, ICL's biggest market, helped drive a 54% jump to $1.38bn in first-quarter revenues. Revenues from its smaller South American market more than tripled to $90.7m.

Earnings rose to $240.5m from $158.8m a year before.

'Positive backwind'

The results received a mixed welcome from analysts, with Gilad Alper at Israeli broker Excellence flagging the decline in potash prices.

"With structural oversupply of potash, and depressed grain prices we don't see a significant upside potential in the short-term," Alper said, restating a "market perform" rating on ICL shares.

However, Psagot's Limor Gruber forecast a "positive backwind" for the stock, on which he kept a "buy" rating and a price target of 57 shekels.

Customers were accepting potash prices which, while lower than last year, were "100% higher than the long term average", Gruber said.

ICL shares closed 0.6% lower at 43.35 shekels in Tel Aviv on a weak day for global stocks.