K+S (SDF) Q2 2024 earnings summary

Executive summary

• Q2 2024 EBITDA surged to €128.3 million from €24.3 million in Q2 2023, driven by higher agriculture sales volumes and improved European and specialty business performance.

• Q2 2024 revenues rose 5.8% year-over-year to €873.8 million, with agriculture segment up 10.6% and industry segment down 4%.

• Adjusted net profit improved to €7 million from a loss of €55 million in Q2 2023; EPS at €0.04 versus -€0.29.

• Adjusted free cash flow for H1 2024 was €86.8 million, down from €273.6 million in H1 2023, but above consensus.

• Group earnings after tax for H1 2024 were €12.6 million, compared to €218.2 million in H1 2023.

Financial highlights

• Q2 EBITDA was €128 million, a significant increase from €24 million in Q2 2023.

• Q2 2024 revenues: €874 million (Q2 2023: €826 million); agriculture sales volume (excluding trade goods) reached 1.84 million tonnes.

• Q2 gross profit improved to €65 million from a loss of €2.8 million in Q2 2023.

• H1 free cash flow totaled €87 million.

• CapEx for Q2 2024 was €116 million, slightly lower than €121 million in Q2 2023.

Outlook and guidance

• 2024 EBITDA guidance narrowed to €530–620 million, confirming the midpoint of the previous range.

• Agriculture sales volumes for 2024 expected between 7.4 and 7.7 million tonnes (excluding trade goods).

• Adjusted free cash flow for 2024 expected to at least break even, despite higher capital expenditures.

• Q3 is expected to be maintenance-heavy, typically contributing only 10% to annual EBITDA, but Q3 2024 free cash flow should be positive due to working capital movements.

• ROCE for 2024 projected in the low single-digit percentage range.