By Giulia Petroni
Shares in K+S rose Tuesday after third-quarter core earnings beat expectations driven by higher volumes in the agriculture business segment despite weak potash prices.
At 0845 GMT, the stock trades 5.1% higher at EUR14.84.
The German chemical company reported quarterly earnings before interest, taxes, depreciation and amortization of EUR72 million, down from EUR633 million in the year-earlier period, but around 37% above consensus, with agriculture volumes up 20% boosted by high demand in Brazil.
“3Q saw significant earnings decline due to weak potash prices,” Citi’s Ranulf Orr and Omi Pallavi said in a note. “However, improving demand driving a solid earnings beat, along with grain prices remaining at elevated levels and supportive farm economics, the ground is set for earnings to continue to inflect upwards into 4Q.”
K+S left guidance for the full year unchanged and said it aims to return 30% to 50% of the adjusted free cash flow generated annually to shareholders.
Write to Giulia Petroni at [email protected]
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