* Uralkali says 2013 net profit fell 58 pct to $666 mln
* Sees 2014 global potash demand at 56-58 mln tonnes
* Is on track to sell 12 mln tonnes of potash in 2014
* Shares up 0.5 percent, underperforming broader index
(Adds comments about Belarus, 2014 output, market share)
By Polina Devitt
MOSCOW, April 10 Russia's Uralkali,
the world's largest potash producer, said it had not held talks
to return to a trading alliance with Belarus and planned to
maintain market share at around 23 percent in 2014 after a first
half drop last year.
Markets had been awaiting the company's 2013 results
announcement for guidance on comments from one of the company's
co-owners last month that a revival of cooperation with Belarus
could be beneficial to both partners.
Uralkali, which on Thursday reported a 58-percent drop in
2013 net profit, quit a powerful trading alliance with Belarus
in July to focus on maximising sales volumes. This triggered a
fall in global potash prices in an over-supplied market.
The move also caused a political row between Russia and
Belarus, forcing a change in Uralkali's ownership.
On Thursday Uralkali said it would continue to review
strategic alternatives that could generate value for
shareholders, but said it was not in negotiations with former
"We are ready to discuss any opportunities profitable for
the company and our shareholders," Dmitry Osipov, Uralkali's
new chief executive, told a conference call when asked about
possible cooperation with Belarus.
"But we are not aware of any talks at the moment," he added.
The new strategy has allowed the company to return to its
five-year average market share of 23 percent, up from 17 percent
in the first half of 2013, Uralkali said. Its estimate excludes
Canadian potash exports to the United States.
Uralkali plans to maintain this share in 2014 and is still
on track to produce and sell about 12 million tonnes of potash
in 2014, the firm added during the call. Its 2013 sales volumes
were up 5 percent at 9.9 million tonnes.
It sees 2014 global potash demand at between 56 million and
58 million tonnes, up from 53-54 million tonnes in 2013, thanks
to recent contract agreements and limited inventory levels, the
NET PROFIT FALLS
Uralkali's 2013 net profit fell to $666 million as a result
of a 28-percent potash price decrease, losses from revaluation
and payments to top management as part of a long-term incentive
programme, as well as one-off expenses.
The loss from revaluation, payments to top management and
one-off expenses exceeded $250 million, the company's report
showed. A Reuters poll of analysts had forecast the firm's
profit at $758 million excluding one-offs.
The net income was at the lowest level for the company,
since a merger with its Russian rival Silvinit in 2011. In 2011
net profit of the combined company was at $1.2 billion and at
$1.6 billion in 2012.
The firm said 2013 net revenue was down 20 percent at $2.7
billion. Earnings before interest, tax, depreciation and
amortisation (EBITDA) fell 31 percent to $1.6 billion and
matched the poll estimate.
The company's report came out amid concerns that the United
States and European Union could tighten sanctions against Russia
due to a stand-off over Moscow's annexation of Crimea.
The threat of future sanctions could negatively affect
Uralkali's access to financial markets, Moody's rating agency
said in a note.
"However, Uralkali's exposure to sanctions is limited as
only 16 percent of its sales are exported to the U.S. and
Europe," the agency added. "This volume, in case of sanctions,
can be easily redistributed to other markets - such as Asia,
South America and Russia."
Uralkali's shares were up 0.5 percent in Moscow,
underperforming a 1.4 percent growth in the broader MICEX index
(Reporting by Polina Devitt; editing by Jane Merriman and