K+S share on the upswing: K+S intends to significantly increase profits in 2022 as well

Earnings before interest, taxes, depreciation and amortization (Ebitda) should increase to between 1.6 and 1.9 billion euros in 2022, as the Hessians announced in Kassel on Wednesday. According to the company, this is more than analysts are currently expecting on average and, in the best case, would also be around twice as much as was achieved last year according to key figures that are already known. However, not all analysts have adjusted their estimates to the already known key data for 2021. Shares extended gains Wednesday afternoon.

Higher sales prices should more than compensate for the increased costs for energy, logistics and materials. However, the group also emphasizes that the predictability of the development in the second half of the year is limited.

The adjusted free cash flow is expected to be between 600 and 800 million euros in 2022. That would be a multiple of the around 100 million euros achieved in 2021. K+S will present a more detailed outlook on March 10 as part of the publication of the final annual figures for 2021.

Last year, thanks to high fertilizer prices and good business with de-icing salt, K+S multiplied its operating profit to 960 million euros, as has been known since the beginning of February. The company also benefited from two special effects.

According to K+S, the one-off effect from the founding of the Reks joint venture with the Remondis subsidiary Remex was EUR 220 million, which was EUR 20 million higher than previously thought. In addition, feasibility studies for tailings dump procedures have resulted in reversals of mining accruals affecting earnings. When asked, a company spokesman put the amount in the mid double-digit million euro range.

K+S shares rose by a good four percent to EUR 19.84 on Wednesday. They were thus at the highest level since August 2018. In the current year, the papers have gained around 30 percent, after an increase of 95 percent last year. You have been benefiting from the strong agricultural market environment with high fertilizer prices for a while now.

However, the group also looks back on a few difficult years before the fertilizer boom, in which the price fell sharply – down to around EUR 4.50 shortly after the outbreak of the corona pandemic in spring 2020.

At that time, after much deliberation, the corporate management also decided to sell the American salt business because of an oppressively high debt burden. The deal was then completed in spring 2021. Taking debt and cash into account, the sale price ended up being around 2.6 billion euros.

K+S agrees with BUND – work on expanding the heap at the Hattorf site

The fertilizer company K+S has reached an agreement with the Hessian Federation for the Environment and Nature Conservation Germany (BUND) in the dispute over the expansion of the Hattorf heap. At the end of January, the BUND submitted an urgent application to the administrative court in Kassel against the early start of the heap expansion. An agreement had now been reached during a discussion, K+S announced on Wednesday. K+S can now continue the work.

The dispute was about the clearing of 17.63 hectares of forest to expand the Hattorf spoil tip. The BUND regional association had criticized the fact that K+S had received advance approval for clearing to expand the heap for the third time. In the current case, however, the environmentalists had denied the particular urgency of the clearing. The nature conservation association argued that forest clearing usually only takes place once a project has actually been approved.

As part of the agreement, K+S has now undertaken not to carry out clearing work on certain areas this winter. According to the announcement, the company is also requesting that the tree population in the infrastructure and edge strips of the area be cleared only to the absolutely necessary extent by specifying the framework operating plan. A biotope in the edge strip will also remain in place until a plan is approved.

At times, K+S shares gained 4.25 percent via XETRA to EUR 19.87.

KASSEL (dpa-AFX)

Image sources: K+S