K+S Group revenues fell 22% to € 2.5 billion in the first nine months of the year. Beside a lower price level in the Potash and Magnesium Products business unit, the production limitations at the Werra plant have had the most impact. The mild 2015/16 winter also led to cautious early fills of de-icing salt. Salt business for consumers, food processing as well as for industrial and chemical use on the other hand showed positive results. In the third quarter of 2016, K+S Group revenues amounted to €688 million.
In terms of results, the price and volume effects could not be absorbed completely by cost savings. Operating earnings (EBIT I) therefore fell by 68 % in the first nine months of 2016 to € 202 million and amounted to € -31 million in the third quarter.
“As expected, the lower prices in the Potash and Magnesium Products business unit as well as continuing production limitations at the Werra plant had an adverse effect on revenues and earnings in the third quarter,” said K+S Board of Executive Directors’ Chairman, Norbert Steiner. “Prices for potassium chloride have stabilised in the meantime. However, production at the Werra plant is still extremely challenging due to the restricted deep-well injection permit.”
The highlights included:
- Revenues: 9M: €2.5 billion/Q3: €688 million.
- EBIT I: 9M: €202 million/Q3: €-31 million (9M/15: € 132 million).
- Lower price level particularly in the Potash and Magnesium Products business unit.
- Production limitations due to restricted deep-well injection permit at Werra plant.
- Outlook: EBIT I between €200 million and €260 million in 2016.
- Legacy: Replacement of the damaged process vessel has started; first t in the second quarter of 2017.
Commissioning of the Legacy Project facilities officially began at the end of August 2016. Work to repair the damage to a process vessel is progressing according to schedule. Based on knowledge to date, production of the initial t of potash should start in 2Q17.
Read the article online at: https://www.worldfertilizer.com/potash/10112016/ks-group-revenues-down-significantly/
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