K+S AG (SDF), Europe’s biggest potash producer, predicted earnings will fall this year after a mild winter hurt demand for de-icing road salt.
Sales at the owner of the Morton Salt brand will hold steady this year, though earnings will decline “moderately” before recovering in 2013, the Kassel, Germany-based company said in a statement today.
“Due to the weather-related unusually poor start to the de-icing business, we are anticipating significantly lower volumes for the salt business,” Chief Executive Officer Norbert Steiner said in the release. “Despite all the macroeconomic uncertainties, 2012 should nevertheless be another good year for K+S.”
K+S purchased Morton Salt from Dow Chemical Co. in 2009 for $1.68 billion to diversify from potash amid challenges to secure new reserves and increase its production. Strong demand for the crop nutrient drove prices higher, helping K+S’s annual earnings jump 37 percent last year.
Earnings before interest and taxes excluding some hedging transactions, referred to as Ebit I by the company, rose 9.2 percent in the fourth quarter to 216.9 million euros ($283 million), beating the average analyst estimate of 205.8 million euros in a Bloomberg survey.
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