* Q1 sales 1.78 bln euros vs 1.64 bln euros I/B/E/S estimate
* Sees 'strong' year rise, previous forecast 'significant'
* Shares extend gains, up 3.5 pct at top of DAX
(Adds trader's comment, more details on outlook)
By Ludwig Burger
FRANKFURT, May 2 German potash miner K+S
SDFG.DE reported even better than expected profits in an early
release of its first-quarter results on Monday, as high crop
prices stimulate demand for fertilisers.
"The unchanged high level of agricultural prices favoured
the earnings prospects of the agricultural sector, so that there
is a significant incentive to raise yields per hectare through
the increased use of fertilizers," the company said.
K+S said its first-quarter adjusted net income rose 54.7
percent to 272 million euros ($403 million), above the average
analyst estimate of 210 million according to Thomson Reuters
Sales jumped 16 percent to 1.78 billion euros, higher than
the 1.64 billion average estimate, while earnings before
interest and tax were up 44 percent at 384.3 million euros.
The company also said that full-year sales should now rise
significantly. It had previously described sales as rising
"tangibly" this year.
Shares in K+S were 3 percent higher at 56.28 euros at 1530
GMT, the second-biggest gainer in the German market's DAX index
.GDAXI behind Commerzbank (CBKG.DE).
It now sees earnings before interest and tax, depreciation,
excluding the effect of currency hedging, rising "strongly" this
year, having previously said it sees profits rising
"The good numbers were priced in the shares, but the outlook
hike adds to confidence," said one share trader.
The company is due to release more detailed results on May
K+S said last month it will consider more fertiliser price
increases in its main European market, following a hike in
Soaring grain prices also buoyed the quarterly earnings of
larger rival Potash Corp (POT.TO) and helped Mosaic Co (MOS.N)
offset technical problems in mining and shipping.
Farmers are scrambling to boost yields by using more potash
fertiliser after prices for key crops such as wheat, corn and
soy surged to two-and-a-half year highs earlier this year.
As the mineral stays in the soil for longer than other
fertiliser types such as nitrogen, many farmers had suspended
use of potash during the financial crisis, creating pent-up
demand this year.
Demand for potash was hit hard by the economic downturn as
investors who had initially rushed into agricultural commodities
later abandoned the asset class.
(Additional reporting by Harro Ten Wolde; Editing by Greg