11 May 2011 12:45 [Source: ICIS news]
(adds further company quotes and UBS rating upgrade throughout)
LONDON (ICIS)--K+S Group’s first-quarter profit rose 70.4% year on year to €293.6m ($425.5m), as sales grew on the back of higher prices and stronger demand for fertilizers, the German chemicals company said on Wednesday.
K+S Group’s earnings after tax rose to €293.6m in first quarter 2011, from €172.3m in first quarter 2010, the company said in a statement.
Revenues rose 15.8% year on year to €1.78bn in first quarter 2011, while earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 33% to €443.1m compared with the year-ago period.
“Strong demand for fertilizers and an above-average de-icing salt business were mainly responsible for the positive course of business in the first quarter,” K+S said.
“We had a successful start into the new financial year,” Norbert Steiner, chairman of the board of executive directors at K+S, said.
“This allows us to look towards the coming quarters with confidence,” he added.
K+S also expects “stable revenues at a high level” in its salt business segment.
The group’s EBITDA, meanwhile, should rise strongly driven by growth in earnings in the potash and magnesium products segment, alongside a tangible improvement in operating earnings in the nitrogen fertilizers business, K+S said.
“However, the operating earnings of the salt business segment will probably decline moderately,” it added.
Meanwhile, investment bank UBS upgraded its share rating for K+S from “sell” to “neutral” after the global potash market saw a resurgence in pricing momentum. Swiss-headquartered UBS said potash prices are expected to rise throughout 2011.
K+S also raised its 12-month price target from €53 to €57 on UBS’s positive outlook.
At 12:00 BST on Wednesday, K+S shares were trading on Germany’s XETRA Stock Exchange at €54.46, up 0.91% for the day.
Additional reporting Nurluqman Suratman
($1 = €0.69)
For more on K+S, visit ICIS company intelligence
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