K+S Reports Strong Q3 Earnings Despite Weak Potash Prices

Shares in K+S have risen after the German chemical company reported better-than-expected core earnings for the third quarter. Although potash prices remain low, higher volumes in the agriculture business segment have boosted performance.

At 0845 GMT, K+S stock is trading 5.1% higher at EUR14.84.

In the third quarter, K+S reported quarterly earnings before interest, taxes, depreciation, and amortization (EBITDA) of EUR72 million. While this figure is down from EUR633 million in the same period last year, it exceeded expectations by about 37%. The increase in earnings can be attributed to a 20% rise in agriculture volumes, driven by strong demand in Brazil.

While weak potash prices contributed to a decline in earnings for Q3, industry experts from Citi believe that improving demand and favorable farm economics will support continued growth in the fourth quarter. Ranulf Orr and Omi Pallavi of Citi stated, “With grain prices remaining high and supportive farm economics, the ground is set for earnings to continue to rise.”

K+S has maintained its guidance for the full year and has expressed its commitment to returning 30% to 50% of the adjusted free cash flow generated annually to shareholders.

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