Potash helps K+S offset weak Salt market

News, News Briefs, Potash Muriate, Western

Kassel — A 30.5 percent increase in Potash/Magnesium operating income helped K+S Group offset a loss from its Salt unit during the second quarter ending June 30, 2012. Potash/Mag income was €240.7 million on revenues of €669.5 million, up from the year-ago €184.4 million on sales of €502.4 million. K+S cited strong overseas business, particularly to Brazil, and good early stocking-up in Europe toward the end of the reporting period. K+S said after North American and Russian production cuts, global capacities were almost completely utilized during the second quarter. In addition, it said international potash prices tended to be firmer in the second quarter, above year-ago levels. K+S said that the basic reaction after a drought is that fertilizer applications are increased. Like others, it is saying it may take two or three seasons to get stocks-to-use ratios back in good order. K+S expects positive Potash/Mag results to continue in coming months, with the company being able to mitigate a weather-related decline in its Salt segment. Salt income was a negative €11.4 million, versus a year-ago positive €11 million. Company-wide operating earnings were up 20.8 percent, to €219.8 million on sales of €996.5 million, versus the year-ago €181.9 million and €821.7 million, respectively. EBITDA was up 16.4 percent, to €275.8 million from the year-ago E237 million. Six-month Potash/Mag income was up 16.1 percent to €449.2 million on sales of €1.25 billion, compared to the year-ago €386.8 million on sales of E1.08 billion. Salt income was off 77.3 percent to €34.1 million, versus the year-ago €150.1 million. Company-wide, six month operating income was off 9.3 percent, to €468.6 million on sales of €2.08 billion from the year-ago €516.6 million and $2.12 billion, respectively. EBITDA was off 7.6 percent, to €580 million from the year-ago €627.6 million. Going forward, K+S expects Potash/Mag sales volumes of 6.9 million mt for 2012, in line with 2011. It expects operating income of €820-€900 million versus 2011’s €906.2 million; revenues of €3.9-€4.2 billion versus 2011’s €4 billion; and adjusted earnings per share from continuing operations of €2.85-€3.15, versus 2011’s €3.77.