Company News

UPDATE 1-K+S gets 350 mln euro coronavirus loan, reports profit beat

(Adds loan, detail, CEO quote)

Aug 13 (Reuters) - German minerals miner K+S on Thursday said it had reached an agreement for a 350-million-euro ($412 million) loan to help it deal with the coronavirus crisis while reporting quarterly core profit above forecasts but below last year’s level.

K+S’s quarterly earnings before interest, tax, depreciation and amortization (EBITDA) fell 32% to 88 million euros ($104 million), above a company-provided consensus of 77.9 million euros.

The salt and potash fertiliser supplier said it had reached an agreement with Germany’s development bank KfW and further banks on the granting of a syndicated credit line of 350 million euros.

K+S, which is aiming to reduce debt levels that had soared after its investment in a new potash mine in Canada, reported a free cash outflow of 43.2 million euros in the second quarter.

A number of German companies hardest-hit by the coronavirus pandemic have taken out government-guaranteed loans as part of the federal government’s economic aid package.

K+S said in May that it was seeking a KfW loan.

The group reiterated it would sell its salt business in North and South America, to slash its debt pile and focus on potash fertiliser products.

“I am very confident that we will reach an agreement on the sale before the end of the year,” Chief Executive Burkhard Lohr said in a statement.

In line with the sale of the Americas salt business, K+S is planning a comprehensive realignment, which it said would reduce the budget for the administrative functions by 30 % or a total of about 60 million euros to 140 million per year from 2021 onwards.

The company confirmed its full-year guidance and expects 2020 EBITDA of about 520 million euros. ($1 = 0.8472 euros) (Reporting by Bartosz Dabrowski in Gdansk Additional reporting by Anita Kobylinska Editing by Jonathan Oatis and Tomasz Janowski)