There are seasonal differences over the course of the year that affect sales of fertilizers and salt products. In the case of fertilizers, we generally attain our highest revenues in the first half of the year because of the use of fertilizers in Europe during the spring. This effect can either be enhanced or diminished by overseas sales. Sales of salt products – especially of de-icing salt – largely depend on winter weather conditions during the first and fourth quarters. In the aggregate, both these effects mean that revenues and earnings in particular are generally greatest during the first half of the year.
Development of revenues, volumes and average prices by region
* Revenues include prices both inclusive and exclusive of freight costs and are based on the respective USD/EUR spot exchange rates in the case of overseas revenues. Hedging transactions have been concluded for most of the revenues, enabling us to achieve more attractive EUR revenues than indicated here. These effects are included in other operating income. The information on prices is to be understood solely as providing a rough indication.
Foreign currency result in EBIT I
Exchange rates are generally hedged using double-barrier options. The terms of the derivatives employed vary and extend until the middle of 2010. It should be noted that hedging transactions are only effective as long as the USD/EUR spot rate remains within agreed barriers. If need be, these can be adjusted by paying additional premiums.
We have hedged a total of US$ 505 million for 2007 (2006: US$ 500 million) for the Potash and Magnesium Products business segment. Average hedged rates per quarter for the Potash and Magnesium Products business segment are as follows:
* As of Q3/2007, the values are anticipated ones; they apply on the assumption that no adjustments to existing hedging transactions will be necessary.
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