09 May 2012 15:28 [Source: ICIS news]
Correction: In the ICIS story headlined "Potash sales offset losses from salt segment – K+S" dated 9 May 2012, please read the headline as "Potash sales offset weak salt segment – K+S". In the first paragraph please read ...offset a weak performance from its de-icing salt business... instead of ...offset losses from its de-icing salt business. In the fourth paragraph please read ...earnings before interest, tax, depreciation and amortisation (EBITDA)... instead of ...operating profit...In the seventh paragraph please read ...6.85m tonnes... instead of ...€6.85m.... A corrected story follows.
LONDON (ICIS)--An upturn in potash fertilizer sales towards the end of the first quarter of 2012 helped K+S offset a weak performance from its de-icing salt business, the German company said on Wednesday.
K+S, Europe’s biggest potash producer, posted a 28% year-on-year drop in its net profit to €212.4m ($275.8m) in the first quarter, as demand for de-icing salt declined because of an unusually mild winter in Europe and North America.
Earnings before interest and tax (EBIT) excluding one-time items declined by 24%, to €281.1m, for the quarter. The EBIT number was better than expectations. Analysts had estimated the company’s EBIT would be €265–270m.
The potash segment posted a 3% rise in earnings before interest, tax, depreciation and amortisation (EBITDA) in the first quarter, to €231.4m, while revenue remained flat at €580.1m.
Demand for potash rebounded after contractual negotiations with China for the first half of 2012 were concluded, with unchanged terms, in mid-March, the company said.
China is among the world’s largest potash importers. It will import 1.7m tonnes of potash in the current quarter at $470/tonne CFR (cost & freight), with an option for a further 420,000 tonnes.
K+S expects the increase in demand for potash towards the end of the first quarter to continue for the rest of the year. It expects to sell 6.85m tonnes of potash in 2012, in line with 2011.
However, K+S has reiterated that it expects the group’s operating earnings to decline moderately in 2012, and sales remain flat as the de-icing salt business is likely to remain under pressure.
The sale will be closed at the end of the second quarter, depending on approval from the EU, the company said.
($1 = €0.77)
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