Dead Sea Works Ld - Final Results

RNS No 7417a
DEAD SEA WORKS LIMITED
8th March 1999


DEAD SEA WORKS LTD
("the company")

Results for fourth quarter and for the fiscal year 1998

Following are the financial results of Dead Sea Works Ltd to 31 December 1998
on a consolidated basis. 

The consolidated reports include primarily Dead Sea Magnesium Ltd. and the
company's share (50%) in Clearon Corp. The balance also contains the company's
share (60%) in Iberpotash S.A, which was acquired at the end of 1998.

Net income for the company for the year was $49.9 million, compared to $39.6
million in 1997.

The operating income of the company for 1998 was $90.1 million, compared to
$66.1 in 1997. 

The company sold 2.92 million tons of potash during 1998 compared to 2.86
million tons in 1997.

Production of potash increased to 2.86 million tons compared to 2.48 million
tons in 1997.

On 21st October 1998, Iberpotash S.A.which is owned 60% by the company, signed
the contract to purchase all the issued share capital of Grupo Potasas in
Spain for 17.2 billion pesetas. The funding will be provided 30% by
shareholders equity and the rest will be borrowed from a consortium of Spanish
Banks with a guarantee from the parent companies.

On 29th October 1998, an agreement for a joint initiative in China was signed.
Dead Sea Works Ltd., in partnership with United Development Incorporated
(UDI), which was a related party to the company at the time of the agreement
and also on 31/12/98, entered into a joint venture with a Chinese
government-owned company to establish a potash plant in China. The share of
Dead Sea Works Ltd. in the partnership with UDI is 92.5%, and the share of the
partnership in the joint venture is 33.3%, with the remaining 66.7% held by
the Chinese company. The equity will account for about a third of the
investment with each side paying in proportion to its ownership, that is the
Chinese company $108 million and the joint company $54 million. The rest of
the investment, about $324 million, will be funded by Project Financing
wherein the joint venture will provide its assets and cash flow as a
guarantee. It should be noted that the actualisation of the project is
dependent on several factors including the receiving of the Project Financing
and several economic actors.

After the closing of the reports the company decided to sell its holding in
the Clearon company to a related company for the amount of 9.7 million Dutch
Florins (about $4.9 million). Before the sale is executed the company will be
released from all, guarantees given to Clearon.  
      
The company approved a project to increase potash production by 300,000 tons.
After the closing of the reports it was decided to suspend parts of the
project in order to examine less expensive alternatives.

The sales of magnesium metal during the year were 15,068 tons compared to
production of 24,457 tons. The relatively low sales were as a result of an
increase in supply, primarily from China, and a decline in aluminium
production because of the economic problems in the Far East. During the 4th
quarter sales improved and 6,002 tons were sold which was close to production,
6,309 tons. The reasons for the increase were certain certifications of the
product that were received at the end of the third quarter and the closing of
the production lines of the Dow Magnesium company in Texas.       


                                                  1998              1997
                                              Consolidated     Consolidated
                                              ($ millions)     ($ millions)

Net turnover                                     493.7            453.2

Profit before tax                                 72.9             60.1

Tax on income                                    (33.0)           (24.1)

Net profit                                        49.9             39.6

Number of shares (millions)                      297.2            297.2

EPS ($)                                           0.17             0.13

Financial Statements for the period January 1st to December 31st 1998 will be
posted to shareholders.

END

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