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Aug 10 (Reuters) – German potash and salt miner K+S (SDFGn.DE) on Thursday reported second quarter sales fell 45%, hurt by falling potash prices, but said rising demand and prices could boost performance in the second half of the year.
The group, which produces potash fertilisers and salts for cooking, animal feed and de-icing of roads, reported second-quarter sales of 826 million euros ($907.61 million), roughly in line with analysts’ forecast of 825.7 million euros in a poll by Vara Research.
Potash prices have declined from the near record highs touched in 2022, following a drop in demand after farmers cut back on fertiliser application to rein in costs and lower existing stocks.
The Hessian-based firm pre-released its core earnings results for the second quarter and cut its outlook in July, when it reported earnings before interests, taxes, depreciation and amortization below investor’s expectations, at 24 million euros.
K+S’s downbeat core profit echoed comments from fertiliser makers such as Norway’s Yara (YAR.OL) and U.S.-based Mosaic Co (MOS.N), which recently missed second-quarter profit expectations as prices of potash and other crop nutrients kept on weakening.
The company, which has already cut its forecast thrice this year, confirmed on Thursday its core profit target of 600 to 800 million euros, saying it hoped to achieve the upper end if potash prices recover in the second half of the year.
“We see that demand is picking up again, that prices are rising and that we will find good framework conditions for the next quarters. Especially because Belarus and Russia still do not have the full capacity available as supply,” Chief Executive Officer Burkhard Lohr said in an interview.
Belarus plans to export 8 million metric tons of potash fertilisers this year, state news agency Belta cited First Deputy Prime Minister Nikolai Snopkov as saying in July.
Sanctions on major producers Russia and Belarus over Russia’s invasion of Ukraine triggered a global supply shortage.
Lohr said the global supply of potash fertilisers was down by seven to ten million metric tons compared to a more normal year.
($1 = 0.9101 euros)
Reporting by Tristan Veyet and Antonis Pothitos in Gdansk, Patricia Weiss in Frankfurt, editing by Deepa Babington
Our Standards: The Thomson Reuters Trust Principles.
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