K+S May Raise 2012 Dividend After Selling Nitrogen Unit

K+S AG, Europe’s biggest potash producer, said it may increase the annual dividend payment after the company sold units and reported a better-than-estimated pretax profit in the second quarter.

The dividend, which is usually a payout of 40 percent to 50 percent of adjusted earnings, will get a boost from a gain booked from the sale of nitrogen fertilizer assets and after K+S sold a gardening division, the Kassel, Germany-based company said today in a statement.

Adjusted pretax profit rose 17 percent from a year earlier to 195.6 million euros ($241.7 million), beating a 186 million-euro analyst estimate. K+S published some earnings on July 30, two weeks ahead of schedule, because figures exceeded analyst estimates. The company said today that the main driver for the 21 percent increase in operating profit and sales was customers making early purchases of potash fertilizer in Europe.

“After there was still cautious early stocking-up of fertilizers at the start of the year, the demand for potash and magnesium products developed positively during the second quarter of 2012,” Chief Executive Officer Norbert Steiner said in the statement. “For 2012, there are opportunities for a higher dividend” on the basis of earnings expectations.

Earnings before interest and taxes and excluding some hedging transactions, which K+S calls Ebit I, rose to 219.8 million euros, with sales rising to 996.5 million euros, the company reiterated today. The potash producer also reiterated a forecast for full-year operating profit of as much as 900 million euros on sales of as much as 4.2 billion euros.

Last year’s dividend of 1.30 euros a share accounted for almost 43 percent of profit, K+S has said.

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