Germany’s K+S slashes dividend to help finance Canada potash project

12 March 2014 17:30 Source:ICIS News

LONDON (ICIS)--German fertilizer major K+S has decided to slash its dividend by 82% to help finance its potash project in Canada's Saskatchewan province, it said on Wednesday.

Also playing into the dividend cut - to €0.25/share for 2013 from €1.40/share in 2012 - are "uncertainties in the market for potash and magnesium products" and a required water protection investment to ensure continued production at potash sites in Germany, the Kassel-based firm said.

The "considerable" planned capital expenditure would strengthen the company long-term, it added.

K+S reaffirmed that the Canadian dollar (C$) 4.1bn (€2.7bn) project in Canada is expected to be commissioned in the summer of 2016.

In past years, K+S’s dividend pay-out ratio ranged from 40 to 50% of adjusted earnings after taxes. Following the dividend cut, the ratio for 2013 will be 11%.

(€1 = C$0.65)

By Stefan Baumgarten