* Says unclear how long potash demand will remain tepid
* Now sees year operating profit down by up to 25 pct to
over 600 mln euros
* Q3 EBIT I down 26 pct at 116 mln euros vs analysts'
forecast of 107 mln
* Share price rises
FRANKFURT, Nov 14 German potash maker K+S
announced plans on Thursday to cut costs by 500
million euros ($670 million) over the next three years following
the collapse of one of the world's two big cartels selling the
Russia's Uralkali, the world's largest potash
producer, sent shockwaves through the industry in July by
pulling out of its sales alliance with its neighbour
Belaruskali, triggering a decline in global potash prices.
"It was and is obvious that the announcement (by Uralkali)
caused tangible purchasing restraint on the customers' side,"
K+S said in publishing quarterly results, adding it was
difficult to assess how long the uncertainty would last.
Farmers and potash import organisations across the globe
have held off on orders in anticipation of a further drop in
Since the crop nutrient stays in the soil longer than
nitrogen fertiliser, farmers can skip a season without
sacrificing much of their yields, which makes potash markets
Earlier this month Canadian rivals Mosaic and Agrium
Inc as well as Israel Chemicals (ICL) posted
lower profits as uncertainty in fertilizer markets prompted many
buyers to delay crop nutrient purchases.
SOLID SAVINGS PROGRAMME
Last month sources familiar with the matter said that K+S's
supervisory board was discussing plans for cost-cutting
"Our objective is to increase the international
competitiveness of K+S in a sustainable way," Chief Executive
Norbert Steiner said in a statement on Thursday.
The new programme will contribute about 150 million euros of
savings in 2014, K+S said, which leaves 350 million of cost-cuts
to be spread over 2015 and 2016.
Last year the company made an operating profit of 804
million euros on revenue of 3.94 billion euros.
Shares in the company, which have fallen 40 percent in the
past six months, were up 2.5 percent at 21.06 euros at 0845 GMT,
when the main German market index was up 0.9 percent.
K+S said it now expected to report adjusted earnings before
interest and tax (EBIT I) of more than 600 million euros this
year on revenues unchanged at around 3.94 billion.
In August it scrapped its forecast of a rise in operating
profits following Uralkali's announcement. Analysts in a Reuters
poll have forecast a profit of 673 million euros.
In the third quarter EBIT I slid by 26 percent to 116
million euros, slightly higher than the consensus forecast of
107 million euros.
"As third-quarter results are above expectations and the new
guidance for 2013 is in line with consensus, plus the fact that
K+S has published a solid cost savings programme with huge
impact already in 2014, there is little reason for the market to
cut (its) estimates," Kepler analyst Martin Roediger said.