UPDATE 1-Uralkali net profit at top end of forecasts

Tue Sep 11, 2012 11:45am EDT

* H1 EBITDA margin reached a record of 74 pct

* Expects global 2012 potash consumption 54-56 mln tonnes

* Shares down 0.8 percent (Adds details, quotes, background)

MOSCOW, Sept 11 (Reuters) - Russian group Uralkali , the world's second-largest potash producer by capacity, posted a 6 percent rise in first-half net profit that was at the top end of expectations thanks to rising prices.

Its price for the soil nutrient potash, key for growing crops such as corn, rose 17 percent in the first half, due to higher demand from the agricultural sector as grain prices rose.

Grain prices have shot up this year, mainly because of severe drought in the U.S. Midwest, offering farmers a chance to maximise profit by using fertilisers to boost plant yields.

Uralkali, controlled by Suleiman Kerimov, said on Tuesday global potash consumption can rise further.

"Demand rebounded in the second quarter with robust buying," chief executive Vladislav Baumgertner said. "Despite macroeconomic volatility, there is room for increased potash consumption, especially in the fast developing countries."

Uralkali's January-June net profit rose to $842 million, compared with a forecast for $827 million in a Reuters poll.

It forecast global 2013 potash demand would increase to 55-57 million tonnes from 54-56 million. According to its forecast, global 2012 potash deliveries will fall to 49-50 million tonnes from 57 million tonnes last year.

Uralkali performed better than Canadian group Potash Corp , the world's largest fertiliser maker, which in July reported a 38 percent drop in second-quarter profit and forecast weaker than expected earnings.

Potash Corp expected global demand for potash to climb to 56-60 million tonnes in 2013, depending largely on a potential sales rebound to India.

India is the second-biggest potash buyer globally. Sales there slumped this year after its government lowered subsidies for potash and phosphate, making them more expensive for Indian farmers.

Uralkali said it expected the lower state subsidies would lower this year's Indian potash import to 3.5-4.0 million tonnes and limit room for a possible price increase.

"Nevertheless, the current low potash application level and high crop prices might boost Indian potash consumption in 2013 and help improve the market sentiment," Uralkali said.

Uralkali's revenue was $2.23 billion, up 13 percent and compared with a forecast for $2.08 billion. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 33 percent to $1.40 billion, against a $1.33 billion forecast.

The company's EBITDA margin reached a half-year record of 74 percent, Uralkali said.

Uralkali shares were down 0.8 percent at 256 roubles in late trading. (Reporting by Polina Devitt; editing by Megan Davies)