K&S warns of lower 2024 core profit on falling potash prices (updated)
14/03/2024 11:29
(Adds share move, analyst comment, CEO quote)
By Tristan Veyet and Antonis Pothitos
March 14 (Reuters) - German salt and potash miner K&S
SDFGn.DE expects a further decline in core earnings for the
year ahead due to lower potash prices, it said on Thursday,
after reporting a more than two-thirds fall in core 2023 profit.
K&S reported earnings before interest, taxes, depreciation
and amortization (EBITDA) of 712 million euros ($779 million)
for last year, slightly above expectations for 695.1 million
euros, according to an analyst consensus forecast compiled by
Vara Research.
It expects 2024 core earnings to be within a range of 500 to
650 million euros, compared with analysts' expectations for
556.6 million euros, according to a consensus compiled by Vara.
Its shares, which shed more than a fifth of their value in
2023, were up 6.14% at 1024 GMT.
"The low end of the guidance range of 500 million euros,
which assumes the potash prices in Brazil remains at Feb 2024
level and weakens in other regions, is likely better than the
trough/mark-to-market expectations of the buyside, in our view."
J.P Morgan wrote in a note.
Potash prices fell from near record highs hit in 2022
following a drop in demand, as farmers used up existing
fertiliser stocks and cut back on its use to rein in costs.
"We expect average the price of potash for 2024 to be under
level for 2023" CEO Burkhard Lohr said at a press conference
following the results.
K&S' annual results echo the wider potash sector's
performance, as companies such as Toronto-listed Nutrien
NTR.TO and U.S-based Mosaic MOS.N have also seen their
margins dented by lower potash prices.
K+S said it would propose a dividend of 0.70 euro per share
for the 2023 financial year, above expectations for 0.63 euro
per share, according to consensus estimates.
($1 = 0.9143 euros)
(Reporting by Tristan Veyet and Antonis Pothitos in Gdansk,
Patricia Weiss in Frankfurt, editing by Sharon Singleton and
Emelia Sithole-Matarise)
((Tristan.Chabba@thomsonreuters.com;))