K+S Group, Kassel, posted a 262 percent increase in EBITDA to €969 million (approximately $1.065 billion at current exchange rates) for the year ended Dec. 31, 2021, up from €267 million for the previous year. The FY21 result included a one-off gain of €219 million from the completion (in December) of the REKS waste management joint venture transaction (GM Dec. 31, 2021).
Revenues were up 32 percent, to €3.2 billion versus the year-ago €2.4 billion.
Agriculture customer segment revenues increased 34 percent to €2.3 billion, mainly driven by “significantly” higher average prices (+28 percent) and an increase in year-over-year sales volumes by around 300,000 mt to 7.62 million mt, the company reported.
The Industry+ customer segment reported 29 percent higher revenues in 2021, to €941 million, up from €731 million the previous year. Strong demand in the de-icing salt business and the chemical industry, as well as higher prices for industrial potash, contributed to the positive development.
“Even with a view to the war in Ukraine and the associated dynamics in sales prices, as well as energy risks, we are sticking to our previous forecast for FY22 of an increase in EBITDA to between €1.6 billion and €1.9 billion,” said K+S Chairman Burkhard Lohr.
Due to the continued favorable market environment in the Agriculture customer segment, K+S expects the average price of the product portfolio to rise sharply again in FY22. Sales volumes are also expected to increase slightly once again.
Responding to an analyst’s question at a company earnings call on March 10, outgoing CFO Thorsten Boeckers said the U.S. is becoming “a more and more important market” for K+S, especially from the Bethune mine. He said the company achieved sales of 250,000 tons in 2021 to the U.S., and that it should be able to double the amount “in the next few years.”
The CFO highlighted that it was never clearer than today that it was “a strategic perfect move” to build the Bethune mine.
“We are so happy to be in North America with at least one mine, and a big mine, which will be growing over the years,” he said.
Boeckers reminded analysts that K+S’ initial ramp-up plan for Bethune was to ramp up tons “step-by-step” and increase secondary mining, and from time-to-time – as required – enlarge the company’s logistics. An increase of 100,000 mt/y was the plan for 2022, taking the mine to 2.1 million mt/y production capability.
“As our balance sheet has improved dramatically, the best investment is speeding up the ramp-up,” he said, but added that the opportunities were limited.
“So we might do a bit more than 100,000 mt/y [in 2022], but 200,000 mt/y is already very optimistic,” said the CFO.
Regarding reports that K+S’ Industry+ customer segment is up for sale, Lohr told analysts K+S is “not actively looking” for a sale. However, he said the company would listen if someone knocked on the door wanting to talk about a potential transaction.
The K+S Board of Executive Directors and the Supervisory Board intend to propose a dividend of 20 cents per share to the Annual General Meeting on May 12. In accordance with the K+S’ new dividend policy, the amount will consist of a basic dividend of 15 cents and a premium of 5 cents.