UpdateGermany’s K+S expects slight rise in 2013 revenues, earnings

14 March 2013 11:47  [Source: ICIS news]

(adds outlook and further financial detail throughout)

LONDON (ICIS)--K+S Group expects to achieve a slight increase in revenues and operating earnings in 2013 compared with last year, the Germany-based fertilizer producer said on Thursday.

Although K+S expects a price-related revenue decrease in its Potash and Magnesium Products business unit, the company has forecast higher revenues in its Salt business unit as a result of volume factors.

Chairman of the board of executive directors, Norbert Steiner, said: "In the Salt business unit, we expect a tangible recovery for sales volumes, if only because of the wintry weather conditions at the start of this year.

“In the Potash and Magnesium Products business unit, given the important agreements concluded with China and India, we expect the sales volumes to be at the high level of the previous year once again, albeit at a lower average price level. All in all, we expect the K+S Group to achieve a slight increase in revenues and operating earnings,” he added.

“Based on these expectations, in 2013 we [also] expect slightly increased earnings per share from continued operations,” he said.

Steiner added K+S also sees opportunities for a slight increase in revenues and earnings in 2014 in comparison to 2013.

The growth estimates are based, on a number of factors, including the expectation of consistently attractive agricultural prices; a sales volume for potash and magnesium products of about 7m tonnes (6.95m tonnes in 2012) and, compared with 2012, lower average prices in the group’s Potash and Magnesium Products business unit.

On Thursday, K+S reported a 12% year-on-year drop in its fourth-quarter adjusted group earnings from continued operations to €131.6m ($171m), weighed by lower revenues.

The company’s revenues fell by 7.8% year on year to €941.6m in the fourth quarter of the year before, while earnings before interest, tax, depreciation and amortisation (EBITDA) was down by 13% at €243.9m, following price-related declines in earnings in the Potash and Magnesium Products business unit and volume-related lower earnings in the Salt business unit, the company said.

Operating earnings during the quarter fell 12% year on year to €183.2m, with earnings in its Potash and Magnesium Products business and Salt business falling 8.5% to €165.9m and 52% to €23.2m, respectively.

For the full-year of 2012, the company’s adjusted group earnings from continued operations fell by 14% year on year to €540.8m, while revenues were down by 1.5% at €3.94bn as the Salt business was negatively impacted by mild and dry weather conditions.

Its EBITDA in 2012 fell by 9.5% year on year to €1.04bn. Full-year 2012 operating earnings fell 11% year on year to €808.5m.

($1 = €0.77)


By: Franco Capaldo
+44 (0)20 8652 3214



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