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Uralkali Reports Sales Drop as Analysts Await Delisting Decision

23.11.2015
Yuliya Fedorinova / Bloomberg (UK)

Uralkali PJSC, the worlds largest potash producer, reported third-quarter revenue fell 9 percent before a conference call later on Monday when management may indicate whether the company will delist its shares from the London market.

Uralkali posted $819 million of revenue in the three months even as its average export price rose 11 percent to $248 a metric ton from a year before, the company said in a statement. Sales volumes dropped 6 percent to 2.9 million tons in the period.

The $20 billion world market for the fertilizer has been plagued this year by an excess of supply, with prices in the Brazilian spot market, one of the largest, falling by more than 27 percent. The slump, not yet fully reflected in the year-on-year comparison for Uralkalis third-quarter revenue, has pressured the share prices of global producers. In light of current market conditions, the company may yet review its production and sales plans, Chief Executive Officer Dmitry Osipov said in the statement.

However, the main driver for Uralkalis shares now will be whether it confirms proposals to delist its stock from London, Oleg Petropavlovskiy, a BCS Financial Group analyst, said before Mondays results. The company may also unveil a third share buyback, he said. Investors will listen to the conference call in anticipation of an announcement on the listing, Konstantin Yuminov, an analyst at Raiffeisenbank JSC, said by phone. Uralkalis press service declined to comment on plans for its listing.

The company bought back about 22 percent of its shares in a $2 billion transaction completed last month, leaving it with a free float of 13.9 percent. Chengdong Investment Corp., a unit of China Investment Corp., sold its 12.5 percent in the buyback. Uralkali also spent more than $1 billion in May and June to repurchase 11.6 percent as part of its buyback program. A further acquisition of stock may lead Uralkali to delist its shares in London and Moscow if its free float, or level of publicly available shares, shrinks beyond a certain point, the company said in August as it announced the second buyback. Uralkali shares rose 1 percent to 170.70 rubles by 2:23 p.m. in Moscow.

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