K+S announces 1Q20 results
Published by Nicholas Woodroof,
- Revenues: €1.1 billion (1Q19: €1.3 billion)
- EBITDA: €201 million (1Q19: €270 million)
- Adjusted free cash flow reaches €204 million (1Q19: €233 million)
- Outlook 2020: EBITDA of around €520 million expected (previously: €500 to €620 million; 2019: €640 million)
- Package of measures to reduce debt: – Sale process of the Americas operating unit on schedule
– K+S launches major realignment project
A weaker de-icing salt business in Europe and North America as a result of mild weather conditions, as well as lower prices for potash fertilizers, resulted in a revenue decline of about 14% to €1.1 billion for 1Q20 compared with 1Q9. EBITDA operating earnings for this period reached €201 million.
In the Europe+ operating unit, lower prices for potassium chloride in the wake of the potash market weakness resulted in a decline in EBITDA to €114 million (1Q19: €177 million). In addition, there were significantly lower de-icing salt volumes as a result of the mild winter in the Communities customer segment. This was offset by higher sales volumes at lower average costs in the Agriculture customer segment.
After €233 million in 1Q19, adjusted free cash flow again reached a high level of €204 million in 1Q20.
K+S expects EBITDA in 2020 of about €520 million (previously: €500 to €620 million; 2019: €640 million). The contract concluded by the major potash producers with Chinese customers should result in a bottoming out of overseas prices for potassium chloride. In the previous forecast, K+S assumed an earlier settlement, which however due to the corona pandemic did not take place until the end of April and at a lower level than expected.
This has an impact on the expected recovery in potash prices this year. In the Communities customer segment, sales of de-icing salt for the year as a whole are only expected to amount to about 8 million t (normal year: 12.5 to 13 million t).
Read the article online at: https://www.worldfertilizer.com/potash/11052020/ks-announces-1q20-results/
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