Germany's K+S axes earnings guidance as severe drought hits production
The miner now expects earnings before interest, taxes, depreciation and amortization (EBITDA) to come at between 570 and 630 million euros, compared to the 660 to 740 million euros previously forecast.
“The extreme drought and higher logistics costs have restricted our growth potential in the third quarter,” Burkhard Lohr, CEO of K+S, said in the statement. “The operating performance in Canada’s Bethune and Germany, on the other hand, is starting to improve,” he noted.
The potash producer shut down its Wintershall site, part of its Werra mine network, in late August. The following month, it also halted production at is Hattorf site, as exceptionally low water levels in the Werra river restricted its ability to dispose of waste water.
The Werra plant — which includes the Hattorf, Wintershall and Unterbreizbach sites — is the largest of its kind that K+S owns. It was back online and at full tilt in early October.
It’s estimated that every day of stoppage cost the company about 1.5 million euros ($1.74 million) per site, which means the outage had a negative impact of 80 million euros on K+S 's earnings.