K+S Group, Kassel, reported second-quarter EBITDA of €706 million, beating the Bloomberg Consensus, the average analyst estimate, of €688.1 million and easily passing the year-ago €112 million. Revenues more than doubled to €1.5 billion from the year-ago €U664 million.
K+S said that for the first time, its outlook assumes a scenario in the fourth quarter for a 25% reduction in natural gas availability, with a total burden of a low triple-digit euro amount. Burkhard Lohr, Chairman of the K+S Board of Directors, told analysts there is a chance that K+S will not be affected by the gas shortage, but that the company wanted to give a flavor of what it could mean if it were affected. He suggested it might be easier for K+S to give this guidance since it does not need the gas for the product itself, but only as an energy source.
Still, the company did not adjust its annual EBITDA guidance, keeping it at €2.3-E2.6 billion. The company said sharp increases in its average prices should significantly exceed expected cost increases, particularly for energy, logistics, and materials. The annual EBITDA guidance, however, was below analyst estimates of €2.62 billion.
Despite low water levels on the Werra River, Lohr told analysts that K+S believes it can manage this extraordinary situation without any standstills.
Because of the product mix at its Bethune, Sask., potash operation, Lohr said the company must supply some product into China. However, he now expects this to be in the range of 500,000-600,000 mt/y, versus the previous 1 million mt/y.
Six-month EBITDA was €1.2 billion on revenues of €2.7 billion, up from the year-ago €237 million and €1.4 billion, respectively.