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K+S Presents its Half-Year Figures Demand for Fertilizers Remains Low

K+S Aktiengesellschaft / K+S Presents its Half-Year Figures Demand for Fertilizers Remains Low

@@start.t1@@--------------------------------------------------------------------------------   Corporate news transmitted by euro adhoc. The issuer/originator is solely   responsible for the content of this announcement. --------------------------------------------------------------------------------@@end@@

balance/companies/finances

Kassel (euro adhoc) - Kassel, 13 August 2009

K+S Presents its Half-Year Figures Demand for Fertilizers Remains Low

@@start.t2@@. At just under EUR 739 million, quarterly revenues down 38% year on year
      . Q2 operating earnings reach about EUR 18 million
      . Non-recurrent charge on financial result leads to  adjusted  earnings  per
         share of EUR (0.27) in Q2 (Q2/08: EUR 1.40)
      . H1 revenues down 24% and operating earnings down 65% year on year
      . Continued difficult  market  environment  as  well  as  sharp  decline  in
         earnings expected for H2

In  the  second  quarter  of  2009,  the  K+S  fertilizer  business    was    also@@end@@

characterised by continued weak global  demand.  Against  a  backdrop that  saw agreements yet to be concluded with India and China in the second  quarter  and continued uncertainty in agriculture over its future earnings situation,  demand for  potash  fertilizers  remained exceptionally  weak.  While    trade    sector inventories continued to decline, producers - according to  their  statements  - have reduced output once again to prevent inventories from  increasing  further. The limited room for  manoeuvre  for  financing  resulting  from  the financial crisis still had a negative impact.

"Agriculture is continuing to display restraint with  respect  to   the  purchase and use of fertilizers, especially in Europe. Even if there is no  sign  yet  of the normalisation of demand, fundamental trends, for example, the rising  global population, changes in dietary patterns in emerging market countries as well  as the increasing importance of renewable raw materials remain intact. These facts speak in favour of fertilizer consumption to rise  again  over the  medium  and long term," says Norbert Steiner, chairman of the Board of  Executive  Directors of K+S Aktiengesellschaft.

Salt Business Segment Primarily because of strains in public finances, the early  procurement  of  de- icing salt in Western Europe - despite low inventories on the customer side  due to the severe and prolonged winter weather conditions at the  beginning  of the year - went only at normal level. On  the  other  hand,  the   early  procurement business in North America began very promisingly.

Q2 revenues down significantly year on year Revenues for the second quarter fell by 38% to EUR 738.7 million primarily due to volume factors. Positive price and currency effects could not offset  this. The decline  was  mainly  attributable  to  revenue  decreases  in   the  Potash  and Magnesium Products and Nitrogen Fertilizers business segments. Revenues for  the first half of the year fell by 24% to EUR 1,814.4 million.

In the first half of the year, just under 60% of Group revenues  were generated in Europe, with about 40%, the Potash and Magnesium   Products  business  segment accounting for the largest share of revenues, followed by  Nitrogen  Fertilizers as well as Salt.

Q2 operating earnings reach EUR 18.1 million EBIT I for the second quarter reached EUR 18.1  million,  compared  with  EUR 326.4 million a year ago. Earnings fell sharply in the fertilizer business above   all. In the Nitrogen Fertilizers business  segment,  negative   non-recurrent  effects resulting from additional payments in respect of 2008 input costs  made  to  the key European supplier had an impact of about EUR 19 million. EBIT I for the first half of the year amounted to EUR 192.1 million and was down 65% on the figure for the same period last year.

Non-recurrent effect due to hedging of Morton Salt's purchase price In order to hedge the Morton Salt purchase price, which will be   payable  in  US dollars, hedging transactions were concluded in April 2009 on the basis  of  the US dollar exchange rate applicable at that time. Owing to the weaker  US  dollar as of 30 June 2009,  the   market  value  of  these  futures  transactions  still outstanding declined and reduced the financial result by a non-cash effect of EUR 69.5 million. Consequently, at  just  under  EUR  (76.6)  million,   the financial result for the second quarter was down significantly on the  same  period  last year (Q2/08: EUR (11.9) million).

Including this extraordinary effect, adjusted  earnings  before   taxes  for  the second quarter amounted to EUR (58.5) million (Q2/08: EUR 314.5  million).  For the first half of the year, it amounted to EUR 107.1 million, which corresponds  to a decrease of 80%.

Adjusted Group earnings after taxes for the second quarter amounted to EUR (44.3) million (Q2/08: EUR 231.1 million) including the described  extraordinary effect. For the first half of the year, the figure was EUR 78.2 million (down 80%  on the same period last year).

The financial result also caused adjusted earnings per  share  for   the  quarter under review to decline to EUR (0.27) (Q2/08: EUR 1.40). For the first half  of the year, this figure was EUR 0.47, compared with EUR 2.39  for  the  same  period last year.

Difficult market environment expected in the second half of the year too As already stated in the ad hoc press release of June 17, 2009,   K+S  no  longer expects a normalisation of demand for fertilizers in the  second  half  of  the year. For 2009 as a whole, the Company expects  the  volume  of  sales  for  the Potash and Magnesium Products business segment to decline to about  4.0  million tonnes of goods (2008: 7.0 million  tonnes)  as  well  as  moderately   declining average prices against the previous year. Even if the   agreements  concluded  by potash exporters with India in the middle of  July  at  USD  460  per  tonne  of potassium chloride were below industry expectations, it sets an important  point of orientation for the world markets and might  contribute  to  dissipating  the purchasing restraint still existing on the part of customers.

Given the current extremely difficult and uncertain industry   situation  in  the fertilizer sector, K+S will depart from its   customary  approach  of  publishing quantitative ranges for revenues and earnings for the year as  a  whole  in  the half-year financial report. K+S will provide a qualitative description of  these figures for the time being.

K+S Group  revenues  for  financial  year  2009  should  fall   significantly  in relation to the previous  year.  The  significantly higher  level  of  revenues expected for the Salt business segment will not be able to offset  the  negative development of revenues in the fertilizer sector.

Costs at Group level should fall appreciably in  2009  in  comparison with  the previous year. K+S expects that short-time working will   more  than  offset  the additional costs arising from the latest collective agreement pay increase.  The costs of energy, materials and freight are also expected to fall.

EBIT I operating earnings for financial year 2009 will fall sharply in  relation to the record result of a year  ago.  This  is   primarily  due  to  the  already described decreasing level of revenues in  the  Potash  and  Magnesium  Products business segment. Even a stronger US dollar exchange  rate  compared  with  last year and higher earnings from Salt will only be able to check this  trend to  a limited degree.

The adjusted Group earnings after taxes  should  therefore  also  be down  very sharply for financial year 2009  in  line  with  the   development  of  operating earnings.

Experience growth The K+S Group is  one  of  the  world's  leading   suppliers  of  speciality  and standard fertilizers, plant care as well as salt  products.  With  its  products and brands, K+S offers its customers a range of needs-based goods  and  services which provides growth opportunities in virtually every  sphere  of  daily   life. The K+S Group employs more than 12,000 people  and  achieved   revenues  of  just under EUR 5.0 billion in 2008. K+S is quoted on all German stock exchanges (ISIN: DE0007162000, symbol: SDF) and listed on the DAX® share index.

Note to editors: You can download this press release as well as the H1/09 financial  report  from our website www.k-plus-s.com.

Conference Call with Analysts On the occasion of the publication of the figures  for  the  second  quarter  of 2009, on 13 August 2009, Norbert Steiner, chairman of  the  Board  of  Executive Directors, Jan Peter Nonnenkamp, CFO, and Joachim Felker, member  of  the  Board of Executive Directors of K+S Aktiengesellschaft,  will  answer   questions  from analysts during a conference call held in  English.   From  3:00  p.m.,  you  can follow this conference call live on  the Internet  at  www.k-plus-s.com  or  by telephone by dialling +49.40.37707.9033; PIN 3524527#.

Your contact persons: Presse:

Michael Wudonig
Telefon:            +49 561 9301-1262
Fax:      +49 561 9301-1666
michael.wudonig@k-plus-s.com

Investor Relations: Christian Herrmann

Telefon:            +49 561 9301-1460
Fax:      +49 561 9301-2425
christian.herrmann@k-plus-s.com

Forward-looking statements

This press release contains facts  and  forecasts  that  relate  to   the  future development of the K+S Group and its  companies.  The   forecasts  are  estimates that we have made on the basis of all the information available to  us  at  this moment in time. Should the assumptions underlying these forecasts prove  not  to be correct, actual events may deviate from those expected at the present time.

@@start.t3@@|K+S Group at a Glance                 |    |                 | |              | |            |
|2nd Quarter 2009                         |    |                 | |              | |            |
| |                                                 |    |Q2              | |Q2          | |            |
|All figures in accordance with  |    |April -      | |April -  | |            |
|IFRSs                                          |    |June          | |June        | |            |
| |                                                 |    |2009          | |2008        | |Change  |
| |                                                 |    |EUR million  | |EUR million| |in %      |
| |                                                 |    |                 | |              | |            |
|Revenues                                      |    |738.7         | |1,184.5  | |(37.6)  |
| |                                                 |    |                 | |              | |            |
| |Potash and Magnesium Products  |    |354.3         | |612.8      | |(42.2)  |
| |Nitrogen Fertilizers                 |    |257.4         | |433.8      | |(40.7)  |
| |Salt                                          |    |99.3          | |108.0      | |(8.1)    |
| |Complementary Business Segments|    |27.6          | |29.6        | |(6.8)    |
| |Reconciliation                          |    |0.1            | |0.3         | |-          |
| |                                                 |    |                 | |              | |            |
|Operating earnings (EBIT I)        |    |18.1          | |326.4      | |(94.5)  |
| |                                                 |    |                 | |              | |            |
| |Potash and Magnesium Products  |    |53.8          | |291.4      | |(81.5)  |
| |Nitrogen Fertilizers                 |    |(26.6)        | |44.0        | |-          |
| |Salt                                          |    |(0.6)         | |(4.2)      | |85.7      |
| |Complementary Business Segments|    |3.2            | |7.1         | |(54.9)  |
| |Reconciliation                          |    |(11.7)        | |(11.9)    | |-          |
| |                                                 |    |                 | |              | |            |
|Earnings after operating hedging            |37.7    | |319.6      | |(88.2)  |
|transactions (EBIT II)                            |          | |              | |            |
| |                                                      | |                 | |              | |            |
| |Financial result                            | |(76.6)        | |(11.9)    | |-          |
| |                                                      | |                 | |              | |            |
|Earnings before income taxes          | |(38.9)        | |307.7      | |-          |
| |                                                      | |                 | |              | |            |
|Earnings before income taxes,              | |(58.5) | |314.5      | |-          |
|adjusted1)                                            | |          | |              | |            |
| |                                                      | |                 | |              | |            |
|Group earnings after taxes              | |(30.2)        | |226.2      | |-          |
| |                                                      | |                 | |              | |            |
|Group earnings after taxes, adjusted1)  | |(44.3| |231.1      | |-          |
|                                                                | |)      | |              | |            |
| |                                                      | |                 | |              | |            |
|Earnings per share, adjusted (EUR)1), |(0.27)        | |1.40        | |-          |
|2)                                                      |                 | |              | |            |
| |                                                        | |              | |              | |            |
|Capital expenditure3)                        | |41.5        | |60.5        | |(31.4)  |
|                                                         | |              | |              | |            |
|                                                                                                                    |
|                                                                                                                    |
|1) The adjusted figures only contain the result from hedging already        |
|realised during the current period. By contrast, changes in the market    |
|value of derivatives still outstanding are not taken into account. The    |
|effects on deferred and/or cash taxes are also eliminated. Q2/09 tax        |
|rate: 27.9% (Q2/08: 27.7%).                                                                         |
|2) Adjusted to the share split in the ratio 1:4 (entered in the                |
|Commercial Register: 24 June 2008; technical execution: 21 July 2008).    |
|3) For or in connection with intangible assets as well as property, plant|
|and equipment.                                                                                              |
|                                                  |    |                 | |              | |            |
|                                                  |    |                 | |              | |            |
|                                                  |    |                 | |              | |            |
|K+S Group at a Glance                 |    |                 | |              | |            |
|1st Half year 2009                      |    |                 | |              | |            |
| |                                                 |    |H1              | |H1          | |            |
|All figures in accordance with  |    |Jan. - June| |Jan. -    | |            |
|IFRSs                                          |    |                 | |June        | |            |
| |                                                 |    |2009          | |2008        | |Change  |
| |                                                 |    |EUR million  | |EUR million| |in %      |
| |                                                 |    |                 | |              | |            |
|Revenues                                      |    |1,814.4      | |2,397.5  | |(24.3)  |
| |                                                 |    |                 | |              | |            |
| |Potash and Magnesium Products  |    |720.3         | |1.135.3  | |(36.6)  |
| |Nitrogen Fertilizers                 |    |599.5         | |922.2      | |(35.0)  |
| |Salt                                          |    |437.6         | |278.3      | |+57.2    |
| |Complementary Business Segments|    |56.7          | |61.3        | |(7.5)    |
| |Reconciliation                          |    |0.3            | |0.4         | |-          |
| |                                                 |    |                 | |              | |            |
|Operating earnings (EBIT I)        |    |192.1         | |552.7      | |(65.2)  |
| |                                                 |    |                 | |              | |            |
| |Potash and Magnesium Products  |    |150.8         | |462.3      | |(67.4)  |
| |Nitrogen Fertilizers                 |    |(18.5)        | |86.6        | |-          |
| |Salt                                          |    |79.6          | |10.5        | |+658.1  |
| |Complementary Business Segments|    |5.2            | |14.2        | |(63.4)  |
| |Reconciliation                          |    |(25.0)        | |(20.9)    | |-          |
| |                                                 |    |                 | |              | |            |
|Earnings after operating hedging      |190.6         | |438.2      | |(56.5)  |
|transactions (EBIT II)                      |                 | |              | |            |
| |                                                      | |                 | |              | |            |
| |Financial result                            | |(85.0)        | |(14.2)    | |-          |
| |                                                      | |                 | |              | |            |
|Earnings before income taxes          | |105.6         | |424.0      | |(75.1)  |
| |                                                      | |                 | |              | |            |
|Earnings before income taxes,              | |107.1  | |538.5      | |(80.1)  |
|adjusted1)                                            | |          | |              | |            |
| |                                                      | |                 | |              | |            |
|Group earnings after taxes              | |77.1          | |311.0      | |(75.2)  |
| |                                                      | |                 | |              | |            |
|Group earnings after taxes, adjusted1)  | |78.2 | |393.7      | |(80.1)  |
| |                                                      | |                 | |              | |            |
|Earnings per share, adjusted (EUR)1), |0.47          | |2.39        | |(80.1)  |
|2)                                                      |                 | |              | |            |
| |                                                        | |              | |              | |            |
|Capital expenditure3)                        | |70.6        | |84.7        | |(16.6)  |
|                                                         | |              | |              | |            |
|Employees as of 30 June (number)      | |12,233    | |12,145    | |+0.7      |
|  of which trainees (number)            | |483         | |452         | |+6.9      |
|                                                                                                                    |
|                                                                                                                    |
|1) The adjusted figures only contain the result from hedging already        |
|realised during the current period. By contrast, changes in the market    |
|value of derivatives still outstanding are not taken into account. The    |
|effects on deferred and/or cash taxes are also eliminated. Q2/09 tax        |
|rate: 27.9% (Q2/08: 27.7%).                                                                         |
|2) Adjusted to the share split in the ratio 1:4 (entered in the                |
|Commercial Register: 24 June 2008; technical execution: 21 July 2008).    |
|3) For or in connection with intangible assets as well as property, plant|
|and equipment.                                                                                              |@@end@@

@@start.t4@@end of announcement                                                 euro adhoc
--------------------------------------------------------------------------------@@end@@

ots Originaltext: K+S Aktiengesellschaft
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Your contact persons:
Presse:
Michael Wudonig
Telefon: +49 561 9301-1262
Fax: +49 561 9301-1666
michael.wudonig@k-plus-s.com

Investor Relations:
Christian Herrmann
Telefon: +49 561 9301-1460
Fax: +49 561 9301-2425
christian.herrmann@k-plus-s.com

Branche: Chemicals
ISIN:      DE0007162000
WKN:        716200
Index:    DAX, Midcap Market Index, CDAX, Classic All Share, HDAX,
              Prime All Share
Börsen:  Frankfurt / regulated dealing/prime standard
              Berlin / regulated dealing
              Hamburg / regulated dealing
              Stuttgart / regulated dealing
              Düsseldorf / regulated dealing
              Hannover / regulated dealing
              München / regulated dealing



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