Business Segments of the K+S Group
Potash and Magnesium Products Business Segment
The good environment for the agricultural industry worldwide has meant that the constantly rising demand for potash fertilizers also continued during the second quarter. This met an already existing full utilisation of global potash capacities and resulted in availability bottlenecks for all potash fertilizer producers. As a consequence, the international potash price level continued to rise dramatically. In addition, further substantial price increases have been already agreed or announced for the coming months.
Revenues by product group
Jan. – June 2008
(in %)
Second quarter revenues rose by 80 % to € 612.8 million. The increase is attributable to significant price increases and more than made up for negative volume effects as well as a weaker US dollar. In the potassium chloride segment, higher prices could substantially make up for what were mainly volume decreases; revenues rose by just under 84 % to € 305.7 million. In the case of fertilizer specialities, revenues amounted to € 234.2 million and were thus 75 % higher than in the same period last year due to price reasons. Revenues earned with industrial products increased by 84 % to € 72.9 million due to positive price and volume effects. During the first six months, revenues of this business segment increased by 60 % to € 1,135.3 million as a result of price factors.
Operating earnings in the second quarter amounted to € 291.4 million and have thus increased by more than five times. Higher average prices for potash and magnesium products were able to clearly more than make up for price-related cost increases, especially in the case of material and energy, as well as a weaker currency result. In the first six months, at € 462.3 million, operating earnings more than quadrupled.
The potash fertilizer prices currently achieved are clearly higher than the average prices of the past year. The resultant price effect on revenues should amount to at least 90 % in 2008. For 2008, we expect a sales level of about 7.9 million tonnes of goods (2007: 8.22 million tonnes). Currency and volume effects will admittedly have a dampening effect, but the expected price effect should by far more than make up for these effects and for the increase in operating costs.
| © K+S Aktiengesellschaft | |
| http://reports.k-plus-s.com > K+S Quarterly Reports - Archive > H1 / 2008 > Business Segments of the K+S Group > Potash and Magnesium Products | |