K+S operating profit falls less than expected in first-quarter
FRANKFURT (Reuters) - Salt and fertilizer supplier K+S (SDFGn.DE: Quote) reported a smaller-than-expected drop in first-quarter operating profit as both its potash and salt unit performed better than expected, but said it expected operating profit to fall significantly in 2016.
The company also said revenues were expected to show a moderate decline in 2016, reiterating its guidance for the rest of the year.
"As expected, revenues and earnings were significantly below the previous year's levels due to the prevailing weakness in the potash market," K+S' Chief Executive Norbert Steiner said in a statement, adding that all cost savings predicted for the quarter were achieved in full.
First-quarter earnings before interest and tax, adjusted for currency hedging effects, fell 31 percent to 218 million euros ($247.95 million), beating consensus forecast of 197 million euros in a Thomson Reuters poll.
The company said operating profit at its potash and magnesium unit dropped 44 percent to 102 million euros, better than the average in the poll which was bracing for a 49.5 percent drop.
The salt unit posted a 14-percent decline in operating profit to 122.5 million euros, against an expected 22-percent drop.
K+S shares were indicated to open 1.3 percent higher according to pre-market data from brokerage Lang & Schwarz at 0535 GMT, outperforming the German blue chip index .GDAXI which was indicated to open 0.5 percent higher.
(Reporting by Maria Sheahan and Harro ten Wolde; Editing by Subhranshu Sahu and Biju Dwarakanath)
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