13 November 2012 14:07 [Source: ICIS news]
LONDON (ICIS)--Germany’s K+S Group has lowered its 2012 operating earnings estimate to the lower end of its previously forecasted range of €820-900m ($1-1.1bn), due to weakness in its potash fertilizer and de-icing salt businesses, the company said on Tuesday.
For full year 2012, K+S now expects operating earnings before interest and tax (EBIT) to be around €820m.
Earnings before interest, tax, depreciation and amortisation (EBITDA) in 2012 are now expected to be around €1bn, at the lower end of a previously forecasted range of €1-1.1bn, the company said.
In the potash segment, absence of contract conclusions with Chinese and Indian customers has put pressure on prices and led to more cautious behaviour among buyers across the globe, the company said.
K+S expects global potash sales volume for 2012 to be 54m tonnes for 2012, about 2m tonnes lower than its earlier estimate of 56m tonnes.
For its de-icing salts business, demand in Europe and North America has been hit this year because of the mild weather conditions at the start of the year, the company said.
However, the group expects demand to recover in 2013 as potash customers in China and India are expected to come back to the market by then, as they will need to re-stock warehouses before the next planting season.
Demand for de-icing salt in Europe and North America is also seen recovering to average annual volumes in 2013, which could result in the group’s revenues increasing slightly in 2013, the company said. No estimates were available for 2013 revenues.
K+S Group’s third-quarter adjusted group earnings rose by 35% year on year to €164.9m augmented by a €66m gain from the divestment of its nitrogen business. However, operating profit declined by 14% year on year to €156.7m, despite a 7% year-on-year increase in revenue to €916.6m.
Third-quarter revenue increased because of exchange rate-related gains and improved volumes for its potash and magnesium products as well as in its salt and complementary business segments, K+S said.
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