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K+S: Werraplant Potash Production Secured Till Christmas, Back FY View; Stock Up

Shares of K+S Group (SDFG) were gaining around 5 percent in the early morning trading after the Potash maker said its potash production at the Werra plant is secured until at least Christmas despite prolonged drought. The company also confirmed its full year guidance .

In a trading statement, the company noted that despite the persistent, extreme drought, full production at the three sites of the Werra potash plant is now guaranteed up to and including December 23. Against this background and assuming a prolonged extreme drought, disposal-related stoppages in production are now only expected to continue over the holidays until January 1. Should significant rainfall occur in the coming days, these stoppages could be further reduced.

The company said the negative effect on earnings would amount to a maximum of 15 million euros. Nevertheless, K+S confirms its earnings guidance and expects EBITDA in the range of 570 million euros to 630 million eurosw. This assumes an average de-icing salt business in December.

The company noted that stoppages in potash production at the Werra plant, even in the event of a prolonged drought, are unlikely in the first quarter of 2019 due to the reduction in stocks in the buffer storage ponds.

From early summer 2019 onwards, K+S will most likely be able to increase the on-site temporary storage capacity for saline wastewater by further up to 400,000 m to a total of up to 1 million m.

In Germany, K+S shares were trading at 16.33 euros, up 5.32 percent.

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