K+S Q3 net income falls 99 percent

FRANKFURT - German salt and fertilizer company Kali + Salz AG said Thursday its net income fell 99 percent in the third quarter as demand for its potash, nitrogen and magnesium agriculture products dropped.

K+S, based in Kassel, said it earned just euro3.7 million ($5.6 million) in the July-September period from the euro334 million in the third quarter of 2008.

Revenue for the period fell 52 percent to euro698 million from euro1.4 billion in the third quarter a year ago.

K+S said it expects lower total sales, and that earnings will fall sharply for the year.

"From today's perspective, the fertilizer business can still not be expected to normalize in the fourth quarter of the year," CEO Norbert Steiner said in the report.

K+S is one of the worlds largest fertilizer and salt companies, and in April acquired Chicago-headquartered Morton Salt in the U.S. Morton earnings, however, will only be included in K+S financial reports starting with the fourth quarter 2009.

Shares of K+S were nearly 3 percent higher at euro38.94 in Frankfurt afternoon trading.

Looking ahead, Steiner said the potash business could see a significant recovery next year as users begin product restocking. The company may also benefit from a key potash deal with China next year.

"In addition, the first-time inclusion of Morton Salt for the entire year 2010 will impact positively on both our group revenues as well as on earnings per share," Steiner said.

For the rest of the year, K+S said earnings would be helped by lower energy, materials and freight costs, but that fixed mining costs would remain expensive. It said the total decline in costs would be significantly below the decrease in revenue for the year.

K+S said third quarter sales of its potash and magnesium products fell 55 percent to euro341 million compared with euro763 million in the year-ago period. Operating profit for the division measured by earnings before interest and taxes declined more than 88 percent to euro54 million from euro466 million in the third quarter of 2008. Nitrogen fertilizer sales declined 60 percent to euro205 million during the quarter.

Meanwhile, salt sales fell only 7 percent to euro122 million from euro131 million in the year-ago period. The salt division's operating profit for the period increased nearly 60 percent to euro14 million from euro9 million in the third quarter of 2008.

K+S could stand to see added revenue from a cold winter, and with it, an increase in sales of de-icing salts for roads.

____

On the Net:

http://www.k-plus-s.com

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.