Germany's K+S ups 2019 earnings forecast on healthier ferts markets, Bethune ramp-up

Source: ICIS News

2019/03/14

LONDON (ICIS)--K+S has upped its earnings estimate for 2019 to €700m-850m on the back of a "favourable" environment for fertilizers, the ramp-up of its Bethune mine in Canada and the hope the last year's production problems will not recur,  the German muriate of potash (MOP) major said on Thursday.

The sulphate of potash (SOP) producer’s chairman Burkhard Lohr said there were “many positive signals for 2019” and added that K+S' earnings before interest, interest, taxes and depreciation (EBITDA) “should increase significantly” this fiscal year.

K+S’ EBITDA for 2018 came in at €606m as the producer was hit by production problems at three MOP plants on the river Werra in Germany.

The plants suffered downtime owing to a prolonged drought, which halted saline wastewater disposal.

The outages burdened group 2018 EBITDA by around €110m, according to K+S.

Despite that, 2018 EBITDA came 5% higher than in 2017. Sales for 2018 stood at €4bn, up 11% year on year.

K+S said it was confident the production issues will not recur in 2019 as the company has worked to increase on-site temporary storage capacity for saline wastewater by up to 400,000 cbm (cubic metres), to a total of up to 1m cbm.

K+S had previously said a “technical solution for the underground storage of saline wastewater has been found” after investing more in research and development (R&D), according to the company.

Meanwhile, strong potash pricing around the world, and the continued ramp-up of K+S’ large Bethune mine in Canada’s Saskatchewan province should also support an improved EBITDA for 2019.

Bethune produced 1.4m tonnes of MOP in 2018, and K+S said the figure should increase in 2019.

Pictured: K+S' Bethune mine in Canada's Saskatchewan province
Source: K+S