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Aug. 11, 2022, 1:56 a.m. EDT

K+S 2Q Earnings Jumped on Higher Prices; Backs Outlook Despite Possible Gas Shortages

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By Pierre Bertrand

K+S AG said Thursday that second-quarter earnings jumped as higher average prices compensated for increased costs, and backed its 2022 outlook despite a possible reduction in natural gas availability at German sites.

The German chemical company's earnings before interest, taxes, depreciation and amortization spiked in the reporting period to 706.4 million euros ($727.6 million), up from the EUR111.5 million it reported the previous year, on revenue that more than doubled to EUR1.51 billion.

In the second quarter of 2021, the company had reported revenue of EUR664.2 million.

The company's performance was driven by its agriculture customer segment, whose second-quarter revenue climbed to EUR1.24 billion, up from EUR473.7 million a year ago.

"Despite continuing constraints in logistics, sales volumes remained virtually stable year-on-year," the company said of its agriculture unit.

"Price-related declines in demand in Western Europe were more than compensated for by higher sales volumes in Eastern and Northern Europe."

Revenue at the company's Industry+ customer segment unit rose 40% in the second quarter to EUR265.7 million.

Looking ahead, the company said it is now for the first time assuming a 25% reduction in natural gas availability at its German sites and higher gas prices in the fourth quarter. The company said reduced gas availability, paired with a German government gas levy, would reduce earnings by a low triple-digit million euro amount.

It nevertheless maintained its outlook for the rest of the year, expecting its 2022 full-year Ebitda in the range of EUR2.3 billion to EUR2.6 billion.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

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