K+S announces Q1 financial results
Published by Emily Thomas,
Deputy Editor
World Fertilizer,
K+S achieved revenues of €988 million in the first quarter of the current year, compared with €1.2 billion in the prior-year period. Operating earnings EBITDA amounted to €200 million (Q1/2023: €454 million) and adjusted free cash flow amounted to €111 million in the first three months of the current financial year (3M/2023: €113 million). K+S has, therefore, exceeded the expectations of the capital market.
Development in the customer segments
In the agriculture customer segment, revenues decreased to €680 million in the first quarter (Q1/2023: €861 million). As in previous quarters, this was mainly attributable to a lower average price for fertilizers. Significantly higher sales volumes only partially offset this development. The continued high share of fertilizer specialties and strong business in the European market nevertheless resulted in the average price remaining stable compared to the figures for the third and fourth quarters of 2023. Sales volumes increased to just over 2 million t in the first quarter (Q1/2023: 1.73 million t).
At €308 million, revenues in the Industry+ customer segment in the first quarter were below the prior-year quarter (Q1/2023: €331 million), but well above the long-term average. This decline was mainly attributable to lower average prices for products containing potash. Tangibly higher prices and significantly higher volumes in the de-icing salt business as well as a further increase in sales volumes for products with industrial applications partially offset the decline. Overall, at 1.85 million t, sales volumes in the customer segment were slightly higher y/y (Q1/2023: 1.79 million t).
Outlook for 2024 confirmed
For the year as a whole, the outlook for EBITDA and adjusted free cash flow remains unchanged: EBITDA is still expected to range between €500 million and €650 million and adjusted free cash flow should at least break even.
Although a full-year EBITDA at the lower end of the range has become less likely with the good first quarter, it cannot be ruled out at present due to the fact that major competitors have not yet concluded contracts with China and India. This could influence the potash price level overseas, which will again become more important for K+S as the year progresses. If a delay in the conclusion of contracts were to trigger a ‘wait-and-see attitude’ on the part of customers, it is assumed that fertilizer sales volumes would be around 7.3 million t.
At the upper end of the range, the company assumes a continued price recovery overseas and sales volumes of around 7.6 million t.
Read the article online at: https://www.worldfertilizer.com/special-reports/16052024/ks-announces-q1-financial-results/?n=W%5C%3Fn%3D%5E%5CKXX%3Fn%3D%5C%5CMLX%3Fn%3D%3Fn%3D%5C%5CLKY%3Fn%3D%3Fn%3DX%3Fn%3D%5C%5C%3Fn%3D%3Fn%3D%5C
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