Uralkali expects a revival in potash demand to boost sales this year after lower application of the soil nutrient by farmers worldwide led the Russian miner to post a 59 percent drop in 2009 net profit.
Uralkali, controlled by billionaire Dmitry Rybolovlev, said Friday that net profit fell to 9.1 billion rubles ($312 million) last year. Potash production fell 45 percent and revenues dropped by 46 percent, the company said in a statement.
Denis Morozov, Uralkali's president, said 2009 was "one of the most challenging" years in the history of the potash industry.
"The global economic downturn forced farmers to reduce fertilizer application, which adversely affected Uralkali's financial results," Morozov, a former chief executive of miner Norilsk Nickel, said in the statement.
"Demand for potash started to pick up in late 2009, prompted by the recovery of the agricultural sector as well as the restoration of price certainty in the potash market," he said. "We are confident that this upward trend will continue in 2010 and drive an increase in prices and sales volumes."
Uralkali's export agent, Belarusian Potash Company, has forecast a 50 percent rise in potash sales this year as global demand for fertilizers bounces back from a year in which cash-strapped farmers ran down inventories.
Uralkali said adjusted earnings before interest, taxation, depreciation and amortization fell 60 percent last year to 16.4 billion rubles. Its EBITDA margin was 56 percent versus 76 percent a year earlier.