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Investing.com -- K+S shares dropped over 5% on Thursday after the company forecasted at least breakeven free cash flow in 2025, falling short of some market expectations.
The German chemical company reported fourth-quarter EBITDA of €164 million, exceeding consensus estimates of €148 million.
However, an adjusted free cash flow of negative €49 million in the quarter, compared to negative €17 million a year earlier, raised concerns about the financial outlook.
UBS noted that K+S’s balance sheet showed a net cash position of €31 million at the end of 2024, a decline from €112 million at the end of the previous quarter.
The company also reported total net liabilities, including mining and pension provisions, of €1.45 billion, an increase from €1.34 billion in the prior period.
While the company’s agriculture division reported sales of €649 million in the quarter, exceeding expectations, volumes declined by 1% year-over-year.
The industry and consumer segment saw a sharper downturn, with sales of €277 million falling 6% below consensus and a 10% drop in volumes. UBS pointed to weaker performance in de-icing salt and industrial salt as key factors in the decline.
The Kassel-based company provided 2025 EBITDA guidance in the range of €500 million to €620 million, with the midpoint slightly above consensus estimates of €538 million.
Potash sales volumes are projected between 7.5 and 7.7 million tonnes, in line with prior expectations.
However, free cash flow is expected to remain under pressure, with management guiding for at least breakeven in 2025, below consensus estimates of negative €9 million and well above UBS’s own projection of negative €113 million. UBS analysts maintained a "sell" rating on the stock, with a 12-month price target of €10.