UPDATE 1-K+S raises profit forecast again, shares jump
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FRANKFURT, June 3 (Reuters) - German potash maker K+S (SDFG.DE) sharply raised its forecast for 2008 core profit for the second time in three weeks on Tuesday, citing rising prices for fertilisers.
"Considering the prices of over $800 per tonne of potassium chloride (KCI) already implemented on the overseas markets for the second half of the year, and against the background of the price increase in Europe announced a few days ago to 535 euros per tonne of KCl, we now expect the operating earnings (EBIT I) of the K+S Group for 2008 to be at least 1.1 billion euros," it said in a statement.
It last raised its forecast on May 14, saying core operating earnings would roughly triple to over 850 million euros ($1.32 billion) this year.
EBIT 1 refers to earnings before interest and tax before market value changes from hedging transactions.
Its shares touched a session high of 329.90 euros and were up 7.1 percent to 327 euros by 0845 GMT, the leading gainers among German mid-cap stocks .MDAXI. The pan-European chemicals index .SX4P rose 0.6 percent.
Like main rivals Potash Corp of Saskatchewan (POT.TO) and Russia's Uralkali (URKA.RTS) and Mosaic (MOS.N), K+S has benefited from soaring potash prices because of tight supplies.
Prices of potash -- the rarest of three key plant nutrients, with nitrogen and phosphates the others -- have soared to record levels as farmers around the world try to capitalise on rocketing grain prices.
K+S, the world's fourth-largest supplier, produces about 7 million tonnes of potash a year, or about 13 percent of global supply.
K+S is also the world's second-largest salt producer after China National Salt.
K+S, a strong candidate to join the German blue-chip DAX .GDAXI index, is worth more than 12 billion euros, up from 800 million in 2002 thanks to its thriving potash business.
Its shares have outperformed the 20-stock pan-European DJ chemicals index by more than 100 percent this year. (Reporting by Michael Shields; Editing by Quentin Bryar) (michael.shields@thomsonreuters.com, Reuters Messaging: michael.shields.reuters.com@reuters.net; +49 69 7565 1266)) ($1=.6427 Euro)
