K+S Ag reported a 105 percent increase in operating earnings (EBIT I) from its potash and magnesium business, to Euro475.9 million on sales of Euro1.84 billion for the year ending Dec. 31, 2010, compared to the prior year’s Euro231.7 million on sales of Euro1.42 billion. 2010 sales volumes were 6.99 million mt, up from 2009’s 4.35 million mt. K+S’s nitrogen business was back in the plus column for the year, with earnings of Euro55.7 million on revenues of Euro1.29 billion, up from 2009’s loss of Euro108.1 million on sales of Euro1.02 billion.
Company-wide, K+S operating earnings were up 205.4 percent for the year to Euro726.9 million (Euro2.33 per share) on sales of Euro5 billion from the prior year’s Euro238 million (Euro.56 per share) on sales of Euro3.6 billion. Potash/magnesium led all company segments in revenues with 37 percent, followed by salt at 35 percent and nitrogen at 26 percent.
K+S expects to pay an annual dividend for 2010 of Euro1.00 versus the 2009 dividend of Euro.20.
K+S fourth-quarter earnings were up 434.8 percent, to Euro195.2 million (Euro.69 per share) on sales of Euro1.34 billion from the year-ago Euro36.5 million (Euro.10 per share) on sales of Euro1.06 billion.
Going forward, K+S expects higher average proceeds and stable volumes from its potash business, as well as a moderate improvement in nitrogen earnings. The company expects both higher energy prices and for salt earnings to see a moderate drop.
In other news, K+S expects to complete the acquisition of Potash One Inc. in mid-May 2011. Infrastructure work and preparations for drillings are to start soon. A review of optimization approaches in the existing feasibility study are to be concluded in the second half of 2011. K+S hopes to utilize Potash One’s Legacy Project in Saskatchewan, building a new potash plant that could commence operations in 2015. It would be a solution mine, which would allow a faster production launch and a more flexible starting curve for production. It said Legacy offers the potential for gradually increasing output to significantly in excess of 2.7 million mt of KCI per year.
K+S Ag also told analysts March 10 that it has no interest in the nitrogen assets currently being offered by BASF (GM March 7, p. 1). This, even though K+S buys nitrogen from one of the assets that is for sale. K+S says nitrogen is not one of its two-pillar strategy, which includes potash/magnesium and salt. K+S is currently eyeing the divestment of its consumer/turf fertilizer business, COMPO (GM June 14, 2010).