K+S Posts Q4 Income of €226m but Expects Lower Sales in 2009
LONDON (ICIS news)--K+S has posted fourth-quarter net income of €226.4m ($290.3m), up from a €97.3m loss in the same period a year earlier, but expects earnings to drop in 2009, the German fertilizer producer said on Thursday.
Group revenue increased by 6.9% to €955.5m, compared with €893.7m in the fourth quarter of 2007, driven by positive price effects, which offset a negative currency impact and lower volumes.
Operating profit surged to €287.8m, up from €33.6m in the same quarter in 2007, largely due to the potash and magnesium products division.
“Far higher prices for standard and specialty fertilizers resulted in a situation where it proved possible to considerably more than make up for higher production costs as well as currency effects,” K+S said in a statement.
K+S said volumes had declined significantly in the fourth quarter in the wake of the beginnings of the global financial and economic crisis.
For the full year, K+S posted net income of €870.9m, up from a €93.3m loss in 2007. Revenue was up 43.4% to €4.79bn.
In its outlook, K+S said it expects significantly lower net income and sales in 2009, but added that revenue was likely to rise again in 2010.
K+S said it expects higher fertilizer prices in 2009 compared with the previous year, but these would be offset by significantly lower sales.
The revenues for its COMPO and fertiva business segments were expected to drop significantly due to substantially weaker nitrogen fertilizer prices, but the salt business should increase sales after a good start to the year for de-icing salt, the company said
The market reacted negatively to the announcement, and at 9:10 GMT K+S shares dropped nearly 10% from Wednesday’s close to €30.72.
Group revenue increased by 6.9% to €955.5m, compared with €893.7m in the fourth quarter of 2007, driven by positive price effects, which offset a negative currency impact and lower volumes.
Operating profit surged to €287.8m, up from €33.6m in the same quarter in 2007, largely due to the potash and magnesium products division.
“Far higher prices for standard and specialty fertilizers resulted in a situation where it proved possible to considerably more than make up for higher production costs as well as currency effects,” K+S said in a statement.
K+S said volumes had declined significantly in the fourth quarter in the wake of the beginnings of the global financial and economic crisis.
For the full year, K+S posted net income of €870.9m, up from a €93.3m loss in 2007. Revenue was up 43.4% to €4.79bn.
In its outlook, K+S said it expects significantly lower net income and sales in 2009, but added that revenue was likely to rise again in 2010.
K+S said it expects higher fertilizer prices in 2009 compared with the previous year, but these would be offset by significantly lower sales.
The revenues for its COMPO and fertiva business segments were expected to drop significantly due to substantially weaker nitrogen fertilizer prices, but the salt business should increase sales after a good start to the year for de-icing salt, the company said
The market reacted negatively to the announcement, and at 9:10 GMT K+S shares dropped nearly 10% from Wednesday’s close to €30.72.
quoted from: www.ICIS.com
