Uralkali announces Q3 revs up 5% YoY to $896 mln; production up 19% YoY to 3.2 mln tonnes of potassium chloride (no comparable ests)
- Production up 19% y-o-y to 3.2 million tonnes of potassium chloride.
- Sales volumes up 19% y-o-y to 3.1 million tonnes of KCl.
- Revenue up 5% YoY to $896 million Net revenue up 3% YoY to $715 million Average export price, FCA, down 14% YoY to $233 per tonne of KCl.
- Mine Update: In November 2014, Uralkali detected a higher level of brine inflow and hydrogen sulphide in its Solikamsk-2 mine, as well as a sinkhole to the east of the Solikamsk-2 production site. In order to ensure employee safety, Solikamsk-2 mine and plant, which represent 17.7% of Uralkali's annual KCl capacity, were suspended. Uralkali set up comprehensive monitoring of the Solikamsk-2 mine site and engaged with a number of scientific institutes. It has commenced implementation of a plan designed to address the consequences of the accident and mitigate the potential negative impact. Among other measures, the Company has restarted backfilling of the worked-out areas of the mine.
- Market Outlook: In China, potash demand has been stronger than previously anticipated due to higher volumes of seaborne imports in the second half of the year. As a result, in August, China started fullfilling additional potash requirements through exercising optional volumes on existing contracts. Annual deliveries are projected to total 12.0-12.2 million tonnes in 2014, the highest level since 2008. In India, demand for potash was quite strong in 3Q due to high levels of NPK application and profitable import economics. A total of 3 million tonnes was imported during the first nine months of this year, representing a y-o-y increase of 42%. In 2014, the country is expected to import 4.0 million tonnes.