K+S 2Q earnings, revenues up; increases potash outlook for 2010, 2011

K+S Group reported operating earnings (EBIT) of €155.5 million (€.51 per share) on sales of €1.06 billion for the second quarter ending June 30, 2010, compared to the year-ago operating earnings of €18.1 million (negative €.27 per share) on sales of €738.7 million.

Second-quarter EBIT from the company’s potash and magnesium segment was €119.2 million on sales of €463.5 million, up from the year-ago EBIT of €53.8 million on sales of €354.3 million.

Potash volumes were up 64.8 percent in the second quarter, to 1.73 million mt from the year-ago 1.05 million mt. The biggest increase was in Europe, which saw volumes of 890,000 mt, up from the year-ago 370,000 mt. Overseas volumes were 840,000 mt, up from 680,000 mt. The overall average potash price for the quarter was €268.7/mt, down from the year-ago €337.4/mt. Prices to Europe saw the biggest decrease, to €262.5/mt from €362.1/mt, while those to offshore markets were US$350/mt, down from US$444/mt.

Second-quarter nitrogen EBIT was ?é¼26 million on sales of €287.4 million, up from the year-ago loss of ?é¼26.6 million on sales of €257.4 million.

Six-month K+S EBIT was €423.2 million (€1.43 per share) on sales of €2.6 billion, up from the year-ago €192.1 million (€.47 per share) on sales of €1.8 billion.

K+S has raised its 2010 potash sales forecast to 6.5-7.0 million mt, up from its last estimate of 6.5 million. 2009 volumes were 4.3 million mt. Compared to the first half, K+S expects moderately declining average prices due to expected seasonal product mix and staggered price effects, with an otherwise stable potash price level in the second half.

On the nitrogen side, K+S expects a significant rise in revenues due to significant sales volumes. The company expects revenues to be between €4.6-5.0 billion, versus the year-ago €3.6 billion.

Operating earnings should rise to between €550-€600 million from the year-ago €238.0 million. Adjusted earnings per share are expected between €1.75-€1.95, versus the year-ago €.56 per share.

K+S has upgraded its forecast for world potash sales volumes for 2011, seeing increases in all major regions.