Uralkali revenue, net revenue drop

Uralkali (URALL) Q3 revenue of $856M (-19.2% Y/Y). Net revenue of $697M (-21% Y/Y).

Production volumes broadly unchanged Y/Y at 2.7M tonnes of KCI

Sales volumes broadly unchanged at 2.6 million tonnes

Average export price -27% to $272 per tonne

Management comments: "Q3 was a turning point for Uralkali. By mid-summer 2013, potash prices had been declining for six quarters and responsible market leadership via a price focused strategy had started to materially negatively impact Uralkali’s market share. Therefore, after careful consideration, Uralkali’s Board of Directors decided to change the Company’s market posture and move from a rigid ‘price-over-volume’ strategy to a more flexible approach whereby the Company continues to focus on shareholder value maximisation, prioritising volumes or prices depending on the market situation."

"During July-August, the potash market remained stagnant, firstly, due to a seasonal lull, and, secondly, due to customer caution in response to the changing market landscape. However, as the fall application campaign approached, we saw restoration of demand in major growing regions, such as China, India and Brazil. We believe that the new market environment will balance potash supply and demand in a more efficient way, thus ensuring higher levels of fertiliser availability for consumers."

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