Minerals group hikes 2021 net forecast
BERLIN: German minerals group K+S raised its 2021 core profit forecast on Tuesday following a rise in potash prices and strong demand for de-icing salts during a cold European winter.
The company, which produces around 11% of the world’s potash, an essential nutrient for crops, said it had seen good global demand for mineral.
It predicted a boost from higher prices, already visible in the first quarter, would pick up in the coming quarters.
“We expect that the prices will continue to increase for the full year,” Chief Executive Burkhard Lohr told analysts.
The group also said a cold winter drove strong sales of de-icing salts in the quarter, which should push full-year volumes beyond an average year.
K+S, which also makes salts for cooking and animal feed, now expects full-year core profit (EBITDA) in a range of 500-600 million euros ($607-$728 million), compared to its earlier forecast of 440-540 million.
First-quarter EBITDA rose 27% to 126 million euros, beating analysts’ average forecast of 113 million euros.
K+S is working to cut debt ater big spending on a new potash mine in Canada. Last month, it closed a deal to sell its Americas salt business as part of a plan to focus on potash.
It reported an adjusted free cash ouflow of 15 million euros in the quarter, versus an inflow of 80 million a year earlier.
Chief Financial Officer Thorsten Boeckers said in a call he expected this year’s cash flow to remain at last year’s level, but predicted a small improvement for 2022.