Sunday 23 November 2014

K+S report Q3 2014

K+S, Q3, 2014, front page

Upon the publication of the report not that much happened with the share price from what I can remember. Since then there has however been a little jump upwards. Still... what was in the report?

If you want to take a look at the report in full then please go here and to see my previous summary then please click on K+S report Q2 2014.

I think that only one table need to be showed because they have managed to push all the thing in there. It is not a big surprise that the revenue is down which comes mainly from decreased sales as well as earnings with the Potash. Still the earnings per share is already up at 1.56 € so I will keep my fingers crossed that they this year decide to go back to normal dividend payments of 40-50% of earnings because that should give a juicy jump up. I also like to take notice of that they have increased their book value by over 10%.

K+S, Q3, 2014, key figures

Let us also take a look at the segments and here we see that after a weak start with the sales of Potash K+S are now up in revenue what they had back in 2013. We also see that salt has performed slightly better in the first nine months of 2014 so let us hope they will keep that up.

Q3, 2014, K+S, segments, quarter, revenue

I do not like to make any forecasting or to come up with similar fortune telling activities but there have lately been some things happening that could mean that K+S can have a really good final quarter.

Those are:

1. The dollar is getting stronger versus the euro. K+S main production sites are in the euro area but all commodity sales are in dollar. So there will be currency benefits if this remains.
2. One of the mines that produce around 30% of the Potash for Uralkali has had a water flooding. This might bring down their production until the problem has been solved. I also observed that they have only an inventory of less than 250 million USD.
3. Snow storms in the US which will probably demand a lot of de-icing salt which K+S sells.

Conclusion: K+S have had a tough for a while but now my guess is that they see the light in the end of the tunnel due to dollar, Uralkali as well as their Legacy project which are progressing nicely. As a shareholder, which I will remain by the way, I hope that I will receive at least a doubling of last years dividend which were meagre to say the least with 0.25 € so they should be able to afford 0.5 € this time.

Oh, and if you want to find out more about K+S then please see analysis of K+S 2014.

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