OAO Uralkali (URKA), the world’s largest potash maker by output, said profit increased 64 percent last year on higher prices and its merger with OAO Silvinit.
Net income climbed to $1.53 billion from $929 million, as sales rose 41 percent to $4.2 billion. Adjusted earnings before interest, taxes, depreciation and amortization jumped 75 percent to $2.46 billion, it said in a statement, beating the $2.17 billion average estimate of four analysts Bloomberg surveyed.
Uralkali’s cash costs were $55 a metric ton, one of the industry’s lowest levels, UBS analysts led by Alexey Morozov said in a note today. That makes Uralkali “highly competitive” as average export prices last year at its mine were $351 a ton. UBS sees net income advancing to $1.72 billion this year.
Uralkali, which raised output 6.4 percent in 2011 to 10.83 million tons, expects a balanced market this year, with demand of as much as 58 million tons, it said in today’s statement. Global sales may fall by 4 million to 5 million tons as clients held stockpiles at the start of the year, Chief Executive Officer Vladislav Baumgertner told reporters in Moscow.
Sales in 2012 may reach 10.2 million to 10.5 million tons, he said, lower than the previously announced target. Uralkali’s 2012 forecast was cut to 10.5 million to 11 million tons on Dec. 22, from an estimate of as much as 11.8 million tons.
The company, which merged with Russian rival Silvinit last year, said it re-evaluated the annual economic benefit of the deal, increasing the gain to $300 million from an earlier $100 million, Chief Financial Officer Victor Belyakov said.
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