K+S reports decline in Q1 2024 profits due to lower potash prices

German potash and fertilizer producer K+S AG has reported financial results for the first quarter of 2024. Quarterly report highlighted lower sales and earnings primarily due to decreased average fertilizer and potash prices. Despite this, the company has maintained its earnings guidance for the full year. In the first quarter, K+S achieved revenues of €988 million, down from €1.2 billion in the same period last year. Operating earnings (EBITDA) were €200 million, compared to €454 million in Q1 2023. Adjusted free cash flow stood at €111 million, slightly below the €113 million reported for the same period last year. These results exceeded market expectations, with the Vara consensus estimate for revenues at €904 million, EBITDA at €165 million, and adjusted free cash flow at €68 million.

The company confirmed its outlook for the full year 2024, with EBITDA expected to range between €500 million and €650 million, and adjusted free cash flow projected to be at least break-even. Dr. Burkhard Lohr, Chairman of the Board of Executive Directors of K+S, noted, “Our strong European business with a high share of fertilizer specialties has provided a successful start into the financial year. This increases the probability that EBITDA for the year as a whole will be above the lower end of the indicated range of €500 million to €650 million.”

In the Agriculture customer segment, first-quarter revenues fell to €680 million from €861 million in Q1 2023, due mainly to lower average fertilizer prices. Higher sales volumes only partially offset this decline, with volumes increasing to just over 2 million tonnes compared to 1.73 million tonnes in the same period last year. The Industry+ customer segment saw revenues decrease to €308 million from €331 million in Q1 2023, although sales volumes rose slightly to 1.85 million tonnes from 1.79 million tonnes.

Despite the challenges, K+S maintains a positive outlook for the year, supported by a strong start and robust performance in its European market. The company’s forecast remains contingent on several factors, including the finalization of contracts with major competitors in China and India, which could impact potash price levels overseas.