(Reuters) - German potash and salt miner K+S on Tuesday cut its annual profit outlook on a slower than expected recovery in demand and lower potash prices, sending its shares down more than 4%.
The group, which makes potash fertilisers and salts for cooking, animal feed and de-icing roads, forecast full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.15 billion to 1.35 billion euros ($1.27 billion to $1.49 billion).
It had previously guided for 2023 EBITDA of 1.3 billion to 1.5 billion euros, while analysts polled by Vara Research had expected 1.37 billion euros.
Potash prices have declined from the near record highs they touched in 2022, following a drop in demand after farmers cut back on fertiliser application to rein in costs and decrease their existing stocks.
However, K+S said customers had held back on orders longer than it expected, as supply deals with India were struck by two competitors only at the beginning of April.
Potash supply contracts to India are considered benchmarks for the fertilisers market.
The company now expects potash prices overseas to recover moderately only in the second half of the year, compared with the first half previously.
"We saw a pick-up in North America," CEO Burkhard Lohr said during an investor call. He added a similar acceleration in deliveries was expected in Brazil by the end of May and in June.
The second half of the year could be good in Europe as well, Lohr said, as farmers should resume using potash after three seasons of low or no applications.
Europe also gets only low levels of deliveries from Belarus and Russia due to ongoing Western sanctions, he said.
"So it is not all weak and it is not a flooding of the market," Lohr added.
First-quarter EBITDA fell 13% to 454 million euros, but beat analysts' forecast of 425 million euros.
($1 = 0.9080 euros)