German fertiliser producer K+S is predicting further declines in potash prices in 2016 as weak agricultural commodity prices, intense competition in the fertiliser sector, lagging economic activity in emerging markets and less availability of credit for farmers weigh on market prices.
In its outlook for 2016, K+S said it expects a “significant” drop in prices for its fertiliser division, while sales volumes are also expected to decline over the next 12 months. K+S says that it expects global potash demand to remain at similar levels to 2015 (64m tonnes), although the ongoing global economic uncertainty as well as high fertiliser stocks and high product availability will have a negative impact on prices.
Strong performance
K+S made the comments for the year ahead when releasing its financial performance figures for 2015. While group revenues for the year increased 9%, earnings (EBITDA) jumped 19% to more than €1bn.
Operating profits increased by over 20% to a little under €782m with operating margins widening by 90bps to 18.7% in 2015.
“Despite weaker conditions in the potash market, we performed well in 2015 and met our earnings forecast, thanks to our broad product portfolio,” said K+S chairman, Norbert Steiner. “Due to significantly higher group earnings, we are proposing a 28% higher dividend for the 2015 financial year,” he added.
Despite the strong performance figures, the K+S share price has taken heavy losses this week as investors react negatively to the group’s downbeat outlook for 2016. Shares in K+S plunged as much as 10% on Thursday as a result of the sober outlook painted by the group.
Read more
Share price collapse spells trouble for K+S
German fertiliser producer K+S is predicting further declines in potash prices in 2016 as weak agricultural commodity prices, intense competition in the fertiliser sector, lagging economic activity in emerging markets and less availability of credit for farmers weigh on market prices.
In its outlook for 2016, K+S said it expects a “significant” drop in prices for its fertiliser division, while sales volumes are also expected to decline over the next 12 months. K+S says that it expects global potash demand to remain at similar levels to 2015 (64m tonnes), although the ongoing global economic uncertainty as well as high fertiliser stocks and high product availability will have a negative impact on prices.
Strong performance
K+S made the comments for the year ahead when releasing its financial performance figures for 2015. While group revenues for the year increased 9%, earnings (EBITDA) jumped 19% to more than €1bn.
Operating profits increased by over 20% to a little under €782m with operating margins widening by 90bps to 18.7% in 2015.
“Despite weaker conditions in the potash market, we performed well in 2015 and met our earnings forecast, thanks to our broad product portfolio,” said K+S chairman, Norbert Steiner. “Due to significantly higher group earnings, we are proposing a 28% higher dividend for the 2015 financial year,” he added.
Despite the strong performance figures, the K+S share price has taken heavy losses this week as investors react negatively to the group’s downbeat outlook for 2016. Shares in K+S plunged as much as 10% on Thursday as a result of the sober outlook painted by the group.
Read more
Share price collapse spells trouble for K+S
SHARING OPTIONS