K+S posts operating earnings EBITDA of €445 million (2019: €640 million), including discontinued operations. This is due to the fact that the recovery in potash prices in the course of 2020 was weaker than expected. Also, the mild winter in North America and Europe also negatively impacted sales volumes of de-icing salt.

Moreover, there were one-off expenses associated with the restructuring of the administration as well as transaction costs from the sale of the Americas operating unit. All these factors resulted in a decline in operating earnings EBITDA.

“Despite the difficult conditions, we are not satisfied with the EBITDA achieved in 2020,” said Dr. Burkhard Lohr, Chairman of the Board of Executive Directors of K+S.

“On the other hand, we made good progress with the measures we could take ourselves.”

In this regard, Lohr refers to the sales agreement for the Americas operating unit reached in October 2020. With this sale, K+S will generate proceeds of around €2.5 billion and therefore significantly reduce its debt, he said.

The associated restructuring of the administration was completed on schedule at the end of the year. In the future, this will save 30% of previous administrative costs, equivalent to €60 million.

K+S also achieved more than €150 million in synergies in 2020 as planned, implemented further operational improvements at the production sites, and accomplished an important step in the strategic realignment of K+S with the new REKS joint venture.

“We have seen some improvement in our business environment for 2021, and therefore expect higher operating earnings this year,” Dr. Lohr said concerning the outlook for the current year.

Due to the strongly negative adjusted Group earnings after tax of €-1.8 billion in 2020 attributable to the impairment - which would also have been negative without this impairment - the resulting balance sheet loss of K+S Aktiengesellschaft, an expected significantly negative free cash flow from operating business in 2021, and the planned utilization of the purchase price for the Americas operating unit to repay debt and strengthen the balance sheet, no dividend will be paid for the 2020 financial year.

However, the company sees positive sentiments for 2021. Since the beginning of the year, the general conditions for the business of K+S have improved. As a result of the partly significant increase in prices for agricultural raw materials, yield prospects in agriculture are improving. Accordingly, K+S assumes a very good demand for potash fertilizers and a further recovery in prices during the current year. The Company expects above-average demand for de-icing salt overall in the first quarter due to the winter weather conditions at the beginning of the year. This should also have a positive impact on the early fills business for the current year.