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K+S Dividend Forecast Cut 15% by Bloomberg on Payout Risk

Nov. 18 (Bloomberg) -- K+S AG, Europe’s largest potash supplier, had its dividend forecast cut by Bloomberg analysts after the German company said it wasn’t sure the payout ratio could be maintained.

The company based in Kassel probably will pay 85 euro cents a share from 2013 profit early next year, the analysts said today in a note. That’s a reduction from their outlook of 1 euro previously, and from the 1.40-euro annual dividend K+S paid on 2012 profit.

Chief Executive Officer Norbert Steiner on Nov. 14 told analysts that “a temporary deviation from our dividend policy cannot be ruled out,” according to an earnings conference call transcript. The company’s custom to pay about 40 percent to 50 percent of profit as a dividend couldn’t be assured “because of the uncertainty of the market for potash and magnesium products and financing measures that are necessary,” he said.

K+S and competitors have suffered in recent months from global price declines for the crop nutrient used by farmers to strengthen plant roots.

Michael Wudonig, a spokesman for K+S, declined to comment when contacted by e-mail.

Adjusted earnings per share at the supplier are forecast to decline 24 percent this year to 2.148 euros a share, according to the average of 25 analysts’ estimates compiled by Bloomberg. The company’s indicated gross yield is 6.7 percent.

K+S shares have lost 41 percent this year, underperforming the BNP Paribas Global Agribusiness Total Return Index, which declined 1.5 percent in the period. The stock climbed as much as 2.6 percent and traded 0.6 percent stronger at 20.75 euros by 2:54 p.m. in Germany.

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editor responsible for this story: Timothy Coulter at tcoulter@bloomberg.net

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