UralKaly net income has been cut more than half

UralKaly released its FY06 RAS net income. In line with the data, net income amounted to $135 mn or 2.06 times lower than in 2005 ($279 mn).

For the time being, the fertilizer producer has not yet published its IAS net income, but we expect that the pace of reduction will be similar. According to our forecasts, the company’s 2006 net income will sink 1.78-fold to $186.6 mn against $333 mn in 2005.

Such a sharp decline was anticipated and driven by two key factors:

-  termination of potash chloride supplies to Chinese and Indian consumers during the first seven months of 2006 due to the lack of price accords, and also;

-  an accident at one of the company’s four mines last October, as a result of which some 20% of production facilities were knocked out of commission.