Potash miner K+S profits up on higher crop prices

Publish time: 31st July, 2012      Source: www.cnchemicals.com
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July 31, 2012



Potash miner K+S profits up on higher crop prices




Potash miner, K+S AG beats second-quarter sales and operating profit forecasts as higher crop prices drive demand for fertiliser minerals in its main European market.



Prices of crops such as soy, wheat and corn have risen between 30-50% in global markets since early June, just before the end of the quarter, mainly driven by supply shortages due to drought in the US. Higher prices for produce give farmers a better return on any expenses on fertiliser.



K+S''s unscheduled statement on Monday (July 30) contrasts with a drop in profit reported last week by its Canadian peer PotashCorp , the world''s largest fertiliser maker, which forecast weaker than expected earnings for the second half of 2012.



The drought in many US corn growing areas may dent Potash Corp''s near-term fertiliser sales in North America, but the resulting spike in global corn prices bodes well for fertiliser demand in Europe.



K+S said second-quarter earnings before interest and tax, adjusted for currency hedging effects, rose 21% to EUR219.8 million (US$271.9 million), above the EUR186.1 million (US$228 million) average estimate of 23 banks and brokerages posted its web site.



Revenues rose 21% to EUR996.5 million (US$1.2 billion), above the EUR906.8 million (US$1.1 billion) consensus forecast in Thomson Reuters StarMine. Its shares were up 2.9% to EUR41.65 (US$51) at 1404 GMT, making them one of the top gainers on Germany''s Dax index of leading shares.



K+S also specified its full-year outlook, saying sales should be EUR3.9-4.2 billion (US$4.8-5.2 billion), versus EUR4.0 billion (US$4.9 billion) reported last year. The group had previously predicted flat sales this year.



Adjusted EBIT should come in at EUR820-900 million (US$1-1.1 billion) it said, compared with EUR906.2 million (US$1.1 billion) last year and a previous forecast of a moderate decrease.



K+Sis due to release detailed second-quarter results on August 14.