VIENNA/FRANKFURT, Aug 11 (Reuters) – K+S, one of the world’s biggest potash producers, said its full year core profit would collapse by as much as three quarters and warned of further uncertainty and falling dividends on Thursday.
Profits of fertilizer producers have tumbled in recent months because of falling prices, weak currencies in importing countries such as Brazil and excessive supply. K+S, which is also the world’s biggest salt producer, blamed tumbling European potash prices, production disruptions and weak demand for de-icing salt as it reported a slump in quarterly earnings.
“2016 is a challenging year,” finance chief Burkhard Lohr told analysts during a conference call after the German company’s second-quarter results.
Shares in K+S dropped 8.9 percent to 18.08 euros by 1005 GMT, bucking a 0.7 percent gain in Germany’s mid cap MDAX index , and have now fallen around 50 percent in the past 12 months.
K+S, which last year rejected a takeover approach from Canada’s Potash Corp, the world’s biggest potash producer, also suffered an equipment collapse at its new Legacy mine in Canada which will delay the start of production and reduce output during the ramp-up.
The $3.2 billion Legacy project will be the first new mine in the potash industry in four decades and undermines efforts by Potash Corp and North American export cartel Canpotex to cut output to shore up prices.
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