K+S AG

K+S reported Q2 EBITDA of about EUR 176 million, up significantly versus last year’s Q2, driven by higher ASP, higher volumes and cost discipline, partly offset by price-related cost increases from the geopolitical environment. Free cash flow reached EUR 40 million, also above last year, but lagged EBITDA because of higher working capital tie-up, mainly receivables. For 2026, the company raised EBITDA guidance to EUR 680 million to EUR 760 million from EUR 630 million to EUR 730 million, with the midpoint said to be in line with Vara consensus. Free cash flow guidance was increased from at least breakeven to a mid- to higher double-digit million euro amount, also described as in line with Vara consensus. The midpoint assumes stable potash prices in H2, current market logistical costs, and a gas price of USD 45 per megawatt-hour; management also said the lower end of the range includes some weeks of low-water impact, if needed.

Christian Meyer framed the quarter as a clear beat, stressing that the stronger EBITDA reflected better pricing, volume growth, and tight cost control. He also emphasized that the Q2 comparison benefited from timing effects, including Bethune maintenance shifting into Q3 this year and last year’s negative U.S. dollar receivable revaluation. His tone was constructive on demand, particularly in Brazil and in Industry+, while acknowledging operational watchpoints such as river levels and the Q3 maintenance cycle.

Jens Keuthen focused on the financial guardrails behind guidance. He said the midpoint assumes 30% open gas exposure, with 70% hedged, and estimated that even a EUR 60/MWh gas price for the rest of the year would have only a mid-single-digit million-euro impact. On 2027 hedging, he said Europe is 50% hedged at a slightly lower price than this year and Canada is 88% hedged at a very good price level. He also said CO2 certificate costs are roughly EUR 30 million per year and that the normal tax rate should be around 30%.

Analysts pressed on Brazil demand, Europe drought risk, river-level disruption at Werra, deicing inventories, gas hedging into 2027, SOP versus MOP pricing, El Nino, and potential new potash supply from Acron and BHP. Management said Brazil had record imports in the first half, inventories are good, and second-half demand should at least be normal; it also said drought in Europe is not expected to trigger a potash “holiday.” On operations, K+S said low river levels can affect cooling-water needs at Werra, but saline water is not expected to be an issue and the company is closely monitoring conditions. On supply, management argued Acron’s ramp was already expected and that BHP’s first volumes being delayed to mid-2027 helps market balance.