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Minerals group K+S hikes 2021 profit forecast on higher potash prices

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Minerals group K+S hikes 2021 profit forecast on higher potash prices
Minerals group K+S hikes 2021 profit forecast on higher potash prices   -   Copyright  (c) Copyright Thomson Reuters 2021. Click For Restrictions - https://agency.reuters.com/en/copyright.html
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By Milla Nissi

(Reuters) – German minerals group K+S raised its 2021 core profit forecast on Tuesday following a rise in potash prices and strong demand for de-icing salts during a cold European winter.

The company, which produces around 11% of the world’s potash, an essential nutrient for crops, said it had seen good demand for the mineral across its key regions.

It predicted a boost from higher prices seen in the first three months of the year would continue in the coming quarters.

It also said a cold winter drove strong sales of de-icing salts in the first quarter, which should push full-year volumes beyond an average year.

K+S, which also makes salts for cooking and animal feed, now expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) in a range of 500-600 million euros ($607-$728 million).

In March, it had forecast 440-540 million euros.

First-quarter EBITDA rose 27% to 126 million euros, beating analysts’ average forecast of 113 million euros in a company-provided poll.

“From today’s perspective, we are also optimistic about the further course of the year,” Chief Executive Burkhard Lohr said in a statement.

K+S is working to cut debt after big spending on a new potash mine in Canada. Last month, it closed a deal to sell its Americas salt business as part of a plan to focus on potash.

Quarterly revenue rose 13% to 733 million euros, beating a consensus forecast of 714 million.

The group’s main potash competitor, Canada’s Nutrien, last week reported better-than-expected quarterly profit and said it expected potash demand to grow for the next decade.

K+S shares, which have risen a third this year, were down 1.5% in early Frankfurt trading.

(Reporting by Milla Nissi and Jagoda Darlak in Gdansk. Editing by Mark Potter)

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