Ladies and gentlemen, welcome to the K+S full year 2024 earnings call. We hope you had a chance to review our posted slides as well as our documents available on our website. After some opening remarks by Dr. Lohr, we will directly jump into Q&A. Some technical notes: please refer to our disclaimer on page 2 of the presentation.
A note on data privacy. Please note that the team session will be recorded, webcasted, and be available as a replay on our homepage afterwards. People asking a question in the team session have to be aware that by turning on their camera and microphone, they give consent to saving and replaying video and audio sequences. Now, I would like to turn over to Dr. Lohr for the opening remarks.
Thank you, Julia. Ladies and gentlemen, a warm welcome from the three of us as well. Despite the challenging environment of low potash prices, we have successfully demonstrated that we are on track. At EUR 62 million, free cash flow was better than expected. EBITDA reached EUR 558 million. Again, we benefited from our global positioning and our strong specialties business.
For the full year 2025, we expect EBITDA to range between EUR 500 million and EUR 620 million. This translates into a midpoint at about the level of 2024. For the upper end of the range, we would need a tangible price recovery for MOP in Brazil during the spring season, and this has to spill over into other regions and product groups and hold up during the second half of 2025. The lower end would work with prices at the level of the end of 2024.
We expect free cash flow to at least break even also for 2025, despite the planned elevated CapEx. We are very happy with the current spring season, with strong potash demand worldwide, so we are in a very promising environment right now as we speak. Before we take your questions, I would like to ask my colleague Jens Christian Keuthen to introduce himself briefly.
Yeah, thank you very much, Burkhard, and a warm welcome from my side as well. My name is Jens Christian Keuthen, newly appointed member of the Board of Executive Directors since February, currently responsible for legal, tax, regulatory affairs, new business areas, and the procurement. I will take over from Christian in June as CFO, accompanied with the responsibility for finance and controlling. Yeah, some personal background: I joined K+S in 2014. My education is I'm a lawyer, became a general counsel, member of the management team, and yeah, my responsibilities were complemented in different ways. Yeah, now I'm happy to be in the board and happy to answer your questions afterwards. Thanks.
If you would like to ask a question, please use the hand signal and write your name and the name of your research house in the Microsoft Teams chat function. We will then call you individually, and you can address your questions to us live. Please switch on your camera. One more request as usual, we would like to answer the questions one by one. If you have multiple questions, please ask one question at a time, and we will answer it first. After that, you will have the opportunity to ask further questions. This brings us to the first question of Aron Ceccarelli from Berenberg.
Hello, good morning. Thanks for taking my question, and congratulations on your new roles, Christian and Jens. My first question is on your EBITDA guidance for 2025. You generated EUR 560 million in 2024 with an average MOP price of EUR 290 per ton. Maybe can you help me understand why the midpoint is flat, where SOP prices today remain flattish, but MOP in Brazil is at EUR 335? Maybe the moving parts of costs would be also useful to understand.
Yeah, first of all, you need to remember that we started in 2024 with higher prices. In the course of 2024, the prices were falling, unfortunately. I think we will later on discuss why this was and why the prices are now increasing. Now we are in an environment since December to have increasing prices, and we will have higher costs from energy.
We had a very, very positive bargaining agreement, but it means a higher HR cost as well. If you put all these bits and pieces together, you end up with an EBITDA in the midpoint. Again, there's a good possibility that we end up somewhere above the midpoint, but let's talk about the midpoint. The midpoint is the result of all these bits and pieces.
Thank you. My second question is on your volume guidance. You mentioned at the beginning of the conversation that you are very happy about the spring season. What is the main driver behind the flattish volume guidance at the midpoint for this year?
Yeah, thank you for that question. First of all, what is not the driver? The demand is not the driver. The demand is strong. If we had more volume, we could sell more volume. You know our capacity is limited, as it is for all our competitors. If we talk about a range of 7.7 and 7.5, it is can we move all products? Logistics, from time to time, we have issues with the weather, with the performance of Deutsche Bahn and others. Do we have a hiccup with our production? It doesn't look like that. As the year is still young, we need to open a range. It's not the demand.
Maybe a final one on the supply side. What are the latest news on the potential export quota from Russia?
For Europe?
Yes.
As far as I know, there is no change in the export quota for Russian product, which is close to 800,000 tons. In 2023, they have almost not used it at all. Last year, they have used big parts of that. The good news, talking about Russia, and I would open the discussion for Belarus as well, they are back in the market. They have been back in the market in 2024 already with almost the entire available capacity. That means the additional demand that we are expecting runs into limited supply. That is the reason for the increasing prices. I would be surprised if this would find a stop in the near future.
Thank you very much.
Thank you.
Now we have one question from the room here. It's Christian Faitz from Kepler Cheuvreux.
Yes, thank you very much. First question, maybe where do you see the Latin American/Brazilian market going structurally? I noticed that Q4, at least in terms of sales, I guess the same was true in terms of volumes, was up, but overall 2024 was heavily down. Do you see a normalization of that market in terms of demand? Would you also, in context with Eastern European volumes, still see that market hampered by Eastern European imports?
Yeah, thank you for the question, Mr. Feitz. Brazil, of course, is currently the powerhouse of our industry, and it runs demand-wise from one record to the other. It is also the place where we meet all our competitors. Last year, we have seen an environment where Uralkali and Belarus were still fighting for a new market position, which had an untypical outcome: high demand, but pressure on prices.
That is why we have looked for other areas with higher netbacks. The good thing is that we have the flexibility to move products, to leave more in Europe, which has still a very good price environment, to avoid India, for example, with a very low price. We did the same in Brazil. Currently, prices are increasing, and that means we most probably will increase our stake in Brazil.
Okay, thanks. A question around hedging/hedging losses. I noticed, if my numbers are correct, that you had a hedging loss in Q4 of something like EUR 80 million, EUR 82 million. Can you elucidate that a little bit? Also, can you talk about gas hedging for 2025, 2026?
Yeah, our hedging strategy is the one is for the US dollar, where we have the FX hedges. There we saw, based on the volatility of the US dollar, there we had some effects at the end of the year, but that's only a calculation effect that you see finally in the P&L. With regard to the gas hedges, for the current year, we have hedged around about 50% at a good round about EUR 40 MWh a nd we already hedged 40% for 2026.
If you compare the hedge in 2024 we had, that was below EUR 40. There we see some increases in energy costs. We want to avoid that we have the peaks over the year because the spot price bear pretty high. That's the current situation with the hedging strategy. What's important to compare, if you see the European market and the Canadian, where we have our other site, there we are talking about EUR 6 MWh . That's why we are very happy to finally have made this investment in Bethune.
Christian, with regards to the hedging effect, it is only the one in the EBIT II. You know that these are kind of the open positions, so just the valuation effect. If you want to know the effect on EBITDA in Q4 isolated in EBITDA or EBIT I, if you want, so it was plus four, so not meaningful.
Thanks, very helpful. On Bethune, one final question from me. I mean, we are already pretty much done with Q1. You have a good visibility into the year, I would believe. Can you share with us your ramp-up plan for Bethune in terms of secondary mining, the delta?
Yeah, so we ended 2024 with 2.2 million tons, and we indicated that we would see 100,000-150,000 tons in addition. In average, it will not be every single year exactly that amount, but we expect another 100,000 tons more in Bethune than 2024.
Okay, so closer to the 100 than the 150, [Crosstallk]which is the range you have provided since quite a few years.
Yes.
Thank you.
Welcome.
The next question comes from Konstantin Wichert from Baader Bank, and he just informed me that his camera does not work, unfortunately. We hopefully can hear you, Konstantin.
Yes. Hello, can you hear me?
Yes.
Perfect. Thank you so much. It's a shame that it doesn't work this time because it didn't work last time. I'm sorry for that. Unfortunately.
Let's see what it does next time.
Yeah. Thank you so much for taking my questions anyways. Maybe just first of all, the first question coming back to the cost items. You talked a bit about personnel and energy, but you expect some relief on the material cost side. Could you give some quantification on that?
Yes. For 2025, we expect some headwinds from the energy side. As I just mentioned, our hedging strategy is currently that we are around EUR 40 compared to below EUR 40 in last year. We had, with the personnel cost, just signed a bargaining agreement, a collective bargaining agreement. On the other side, we expect some lower costs, especially with materials, technical equipment. These are from our procurement department information we included in our guidance.
Yes, I see. Okay, no quantification of material cost relief because I think last year we got a pretty clear €100 million cost relief from energy and logistics, which was a clear number. Just asking on a clear number.
We said for all of it together, mid to high double-digit headwind.
Okay, thank you. Also coming back to the hedging strategy, given that we now have these higher energy or gas prices in Europe, I think the expectation was still that over the midterm in a normal economic environment, the expectation was more that gas prices could be around EUR 60 per MWh , which would be still higher in Europe. I'm just curious if that's also your assumption still, or what do you think is the midterm price for gas in Europe and how is that affecting your hedging strategy? Should we come back at some point to the levels of like 80%-90% of gas hedged, or will that always be a more open exposure from now on?
Yep, with regard to the gas price and the EUR 60 you just mentioned, it was a peak that you saw for the spot market. For the spot market, that is pretty volatile currently. There you see one afternoon EUR 60, the next afternoon EUR 45. That is why it is so important that we have a hedging strategy that we already locked in 50% for 2025. What we can see is what we expect and what also the energy company expects, that especially in the second and third quarter we will see the normal dip in the summertime because the fill levels of the caverns are pretty good and the weather is currently also warm. We are very happy or expect that we will be around EUR 40.
Yes, I mean, more midterm, how should we think about that? Are you planning at some point to go back to hedging 80%-90% one year ahead, or will you always have that exposure?
Yes, yes, yes. No, that depends finally on the current situation, at what level you can finally lock in the price levels, and we want to optimize this. Normally, we optimize our hedging levels in Q2 and Q3, so mainly during the summertime, the spring and summertimes where the prices are lower compared to the wintertimes. That is no surprise currently.
Okay, I keep it like that. One question remaining for now, maybe. If I remember correctly, last year, a couple of competing Mannheim SOP producers always had some operational difficulties, which also helped you on the specialty side. How's this market evolving currently, and what do you expect for 2025?
Yeah, there's not much change. It's still difficult and expensive to produce SOP following the Mannheim process. That's why this market is still tight, and that's why the prices are still high. Of course, now with the very quickly increasing MOP prices, the premium is decreasing a little bit, but we are sure that we will defend a very attractive premium on this market because, again, it's tight.
Okay, thank you so much, Ronald.
You're welcome.
The next question comes from the room here. It's Michael Schaefer from Oddo.
Yeah, thanks for taking my two questions. The first one is, and maybe related to the last one, on your production outlook. Last year, I think your specialty materials volumes gained something like 32% year- over- year. There was a strong mix effect towards more specialties at the expense of MOP, which I think the volume declined minus 6%. Now, what you just described, how should we think about the product mix going into 2025 on the back of that? This would be my first question.
Yeah, thank you, Mr. Schaefer, for that question. I mentioned earlier that we are very flexible in terms of going into the markets with the highest netbacks. We also have a little flexibility in our product portfolio. Currently, we are running, we call it internally, SOP Max. That means more SOP and slightly less MOP and Korn-Kali due to the pricing.
For the time being, we plan to do that until the middle of this year, and then we have to see what the market conditions are to either continue or lower the SOP volumes. This flexibility is perfect. Last year, we have not met our production targets volume-wise, but we have met our earnings targets due to that flexibility.
Thanks for that. Second question is coming back to Russia. We briefly touched the import quotas. However, taking a bit step back, basically, thankfully now we are getting peace talks and things are moving in the right direction. From your point of view, how do you see basically the European-Polish market evolving? Which role do the Russians and Belarusians play from your perspective if we are getting a peace between Russia and Ukraine and the market is sort of stabilizing? How should we think about this one then?
First of all, all of us would be more than happy to see a peace and not people dying, totally independently of our business. The second thought is, what would a peace mean for our business? Here we are more than relaxed because, as I said earlier, they are back in the markets and they cannot do more than they are doing currently.
The opposite is true. They are obviously struggling. They have a stronger domestic market. They have maintenance issues, et cetera. There is rather less to expect than more to expect. If they should come back into Europe with higher volumes, then they leave room in other markets. That is a totally relaxed situation, and we would be more than happy to see peace.
You would always have to still ask yourself, does peace mean that the sanctions against Belarus are lifted? Because they were not connected with the war originally. The next question comes from Axel Herlinghaus from DZ Bank.
Okay, thank you for taking my question. Can you please outline the impact of the planned US tariffs of 25% on Canadian products? If they would come, how you expect the probabilities? What does it mean for K+S and what does it mean for regional price developments, especially in the coming months? What mid-long-term scenario do we expect?
Thank you. Difficult question because that situation is changing daily. I try to give you an overview where we are standing. First of all, yes, 25% is mentioned for products going from Canada into the U.S. and some products from Europe into the U.S. Potash is a critical mineral, and for potash, it's only 10%. Usually, you raise tariffs to protect your local industry, but there is almost no local U.S. potash industry. What would be the outcome? Farmers have to pay the bill, 100%. The Canadians have already announced that they would put it on the existing market prices, and we would do the same.
If there would be a long-lasting situation with high tariffs from Canada into the U.S. and no tariffs on potash, which I believe will be the outcome from Europe into the U.S., we would have the opportunity to leave the U.S. behind from Canada, no deliveries from Bethune, but to ship product into the U.S. from Germany. What we are already doing with specialties, SOP goes into the almond industry into California. In total, no risk, rather an opportunity for K+S. You're welcome.
The next question comes from Teams again. It's Joel Jackson from BMO. Joel, please turn on your camera.
Hi, good afternoon. Can you talk about trade goods? Can you talk about what was the impact on earnings in 2024 for trade goods? It's increasing a lot the last few quarters. What's the outlook in 2025 for the trade goods part of the agricultural segment?
That's a very good question. It goes close to zero. That's why we want to ramp it down, the trade good business. Only our African activities make sense. We are in Uganda and Kenya, and here it makes sense, but all the other trade good activities we want will drive down.
Should we expect it to be near zero in 2025?
Not that quickly, but as I said, we still continue to have trade good business in Africa, but it will reduce significantly over the time.
Okay. One thing is SOP prices, I think there's been some shorts of sulfur, and it looks like SOP has been under very strong demand. I saw SQM's results last week too. Potash prices are rising. The NOP over potash premium is shrinking a bit. You mentioned something similar going on with SOP. I'm trying to reconcile, should not you be making more money in SOP this year than last year with the demand for SOP being stronger, but some weird things going on with the premiums?
We have had a very high pricing in SOP. We were, frankly, as we put together our plan in autumn last year, expecting some price pressure on SOP, which is not the case anymore. There is even potential for higher prices. Exactly what you say, we are optimizing our netbacks in all products, and there is a good chance for SOP. That is why we are running SOP Max in our production.
Burkhard, maybe a bit of a different question. As you think about ramping down here in your last few months in this role, what is the one thing you're most proud of, the one accomplishment you're most proud of? What is the one thing that you think is the challenge that you're going to leave, but is the one that the company has to really think about?
Wow, difficult. The one thing I'm the most proud of. When I started, maybe when I started, we were every single month at risk to lose production or even lose a total site due to our environmental issues. Now nobody is talking about that anymore because we have achieved the environmental, I call it environmental peace due to a lot of talkings to authorities, NGO, politicians, et cetera.
That is maybe the biggest, one single biggest event. You ask about the opposite side, I would have been happy to announce we have the approval to discharge our waters in Spring. Unfortunately, that was not achieved and that most probably will not be achieved. We have found other opportunities to deal with our remaining much lower production waters after Werra 2060 is finished, but that I would have loved to achieve before I leave.
Thank you.
Thank you very much for the questions.
The next question comes from Tristan Lamotte from Deutsche Bank.
Hi, thanks for taking my two questions. First one is just on the kind of general tightness of the market. I was wondering what you kind of think of as a maximum effective potash capacity at the moment. Maybe you could talk about the general trend on capacity additions and how much the recent outages have impacted sentiment recently. Thanks.
Market.
Yes.
[Foreign Language] Ich bin nicht sicher, ob ich es verstanden habe.
The capacity outtakes that we saw in the different regions, how they impacted the market dynamic.
Okay. Yeah. Having a market condition where everybody is producing with full capacity. Not like the years before where, for political or geopolitical reasons, some producers were low in volumes. Now they are producing full steam. Having a market where we expect 2-3 million tons more demand than in 2024.
Every information like that, even if it's only 300,000 ton, 400,000 ton, has an impact on the behavior of our customers, of our farmers. We see that. That will lead in a long-lasting price increase. If you add all up, 1 million due to maintenance from Belarus, 300,000 due to maintenance from Russia, 400,000 due to higher demand in Russia, SQM shorter in SOP, that are meaningful volumes. That's why there is a huge potential.
I'd rather like to see prices like we've seen over the last few weeks, $5 more, $10 more a week or the second week than the price rocketing that we've seen in 2024 because that has a counter effect that we don't like. That is a very good position we are in. Again, every 100 or 200 or 300,000 tons have a significant effect in this environment.
Thanks. Maybe second question. If I think about the cost headwinds that you mentioned year on year, it seems to leave quite a bit of additional tailwind needed from price at the midpoint. I just wanted to understand what your assumptions there are for price at the midpoint and is there a benefit from Industry Plus as well?
I think I have understood your claim, but the line is difficult. We have an echo here. Yeah. Of course, the price development has to more than compensate the cost headwind. That is our expectation. The second part was?
If industry is also contributing to this.
Yeah, Industry Plus. Thank you for that question because we talk not enough about Industry Plus. That business is developing very good. Both parts, the sold part, we have taken some price initiatives. We have tested the markets. We have expected to lose volumes. The volume that we lost was by far lower than expected. The return from the sold business is on a level that we have never seen before for Europe, isolated. Of course, the potash products that run into the Industry Plus business also have a very good price tag. In all, it's really an additional business which stabilizes the group.
Excellent.
Thank you very much.
The next question comes from Angelina Glazova from JPMorgan.
Hello and thank you very much for taking my questions. I have two questions. The first one is on the market environment. Could you please talk about your understanding of current inventory levels at key consumers? I'm especially interested in China, Brazil, and also the U.S.
There has been quite a lot of uncertainty around the tariffs recently, and also the expectations of buyers have likely gone up in terms of their potash price expectations through the year. Do you think it could have affected the demand strength that you're seeing currently, or is it all underlying, or could there be some inventory build happening right now?
Yeah, thank you for the question. I have explained the market environment, and that leads to the following. We are seeing the inventory levels on a very low level. We have seen over the last years, the farmers going more to just in time buying due to the high volatility of potash prices. They do not want to have a lot of inventories in their warehouses.
Now, with the high demand, in addition, we see low inventories. If you take China, you ask exactly about China, Brazil, and U.S. China has released volumes out of their strategic reserve, meaningful. They are significantly below the 300 million tons that they want to have in hand for the strategic reserve. Brazil is again showing higher demand than in the year before, and there is not much room with this demand that all goes on the field into application.
U.S. maybe is the only exemption because of the tariff discussion. We see the farmers buying maybe a little bit quicker than before, but not to build high inventories, to have a safe price tag on what they put on the field in the next season. In total, in the system, there is not much available volume.
Understood. Thank you very much.
You're welcome.
My second question, it's about free cash flow guidance. We know that the EBITDA guidance for next year is a range, and then CapEx, you're guiding to close to EUR 550 million. Free cash flow guidance is sort of open-ended of at least breakeven. I'm just looking to understand as to why it is not a range. Do you see the flexibility on the CapEx side, or is it to accommodate any potential working capital movement? How should we think about free cash flow, say, for example, at the top end of your EBITDA guidance?
Yeah, first of all, I think it, I hope it was not a surprise that we are guiding at least.
Breakeven.
Breakeven. Because we announced already on our capital markets day in November 2021, during Werra 2060, we have elevated CapEx, and that means there is not much room for free cash flow. Still, we achieved EUR 62 million last year on an EBITDA level, which is very close to the midpoint of the guidance of this year. When we say at least a breakeven, that does not mean zero.
We are in March. It is still very early. It would not make sense to give a more bullish or a more precise number. What we can assure is if we should see the lower end of this range, which from today's perspective is not very probable, but it is not totally off the table, then we are able to manage via CapEx the at least breakeven.
In all other EBITDA points in that range, we should expect a positive and more than significant, more than only zero free cash flow.
Thank you very much.
You're welcome.
The next question comes from Lisa De Neve from Morgan Stanley.
Hi, thank you for taking my question. I just have one. Could you just remind us about how we should think about price lags for CapEx assets in the first half and maybe even the entire year? Could you tell us when you expect some of these higher prices we've seen in the market, particularly in the U.S., which I know is a small market for you, and Brazil to be seen in your P&L? Thank you.
You mean the time lag, Lisa?
Yes, the time lag. Yes. The difference between the market price and your realized pricing that comes into your P&L.
Okay. In general, you should expect a time lag between three and four months. What we are booking now in our P&L and what we will report soon with the first quarter was a deal from autumn 2024.
That's super great. Thank you very much.
Thank you.
The next question comes from Konstantin Wichert from Baader again.
Hi, if I may, a couple of follow-ups. Just coming back on the CapEx, I think if I remember correctly from the time we presented the Werra 2060 project, you were expecting about EUR 150 million additional CapEx in 2025 from that side. I think if I remember correctly, EUR 50 million for each 100,000 tons you want to add in Bethune. Could you remind us again of the maintenance CapEx and whether you are shifting certain CapEx for the Werra 2060, or how do we derive this lower CapEx?
Yeah, that is totally correct what you have remembered. EUR 400 million is the CapEx that we need for our network of assets to keep them in the proper shape. After Werra 2060, we will go into that direction again. For the years 2025, 2026, we will see an additional EUR 150 million, close to EUR 250 million. 2027 is the first year where the CapEx number should come down a bit. The biggest portion of the additional CapEx requirement comes from Werra 2060. That gives me the opportunity to tell you we are very good on track. We will deliver on budget and on time. That means we will see all the positive effects, including 20% less cost of production by the end of 2027.
Okay. Just that I get it clearly, where are you currently having the savings? If you guide for EUR 550 million CapEx, EUR 400 million base, EUR 150 million for Werra 2060, and then no CapEx for the expansion in Bethune, or where are the cost savings coming from?
No, I said the 150 is for Werra 2060 and for Bethune. The by far biggest portion out of the 150 is Werra 2060.
Okay. It is a bit lower than your initial CapEx expectation that you shared with us in 2022.
I think that's what we said. Do not forget about what we said, and you understood that what I just said are the correct numbers.
Okay. We keep it like that. Just clarification on your positive cash flow from inventory. Is that just due to prices, or was there also some effect from reducing volumes?
You mean the effect that we were calling in the presentation for the EBITDA bridge for Q4?
I think you had a positive cash inflow from inventories. Was that solely due to lower prices, or was that also a reduction in inventory levels volume-wise?
It was a reduction in inventory levels, and that was, by the way, also an effect which on the full year basis was negatively affecting our EBITDA because we were drawing down inventories during 2024. That was more volume than price, actually.
Perfect. Thank you.
We have a question from the room, Christian Faitz from Kepler.
Can I ask on your environmental projects? Dr. Lohr, you mentioned Springen will most likely not be achieved. What are the key reasons for that? Is it a change in government in Thuringia, or what's behind that? How is the tail pile covering, whatever the term is, going in Neuhof-Ellers and other locations?
Yeah. Yeah, first of all, we have roughly 300 environmental applications and approvals a year. That is ongoing business, and that runs very smoothly. This single one was a very tricky one. Here we had two states to agree. Thuringia is fine. They would be willing and able and ready to approve, but Hesse also has to approve because of the underground deposit, which is close to that area which we wanted to flood.
They had an advisor, yeah, who were not 100% sure that there is no risk in, really, the number is correct that I'm saying, in 10,000 years from now. That was the reason for them not to approve. After Hesse did not approve, Thuringia were not able to approve because they both would have to approve. That is really a very big, yeah, special situation.
As I said, we have a lot of approvals to go for, and they are all in time and make sure that we can continue with our business. Spring was a special animal, and it's unfortunate. We were prepared, meanwhile, for that. We can have alternatives to deal with our process waters, which again are much reduced after Werra 2060. Thuringia still has a problem with a sinkhole and not sinkhole with the water inflow they have in this single area.
Just to clarify, are you still maintaining the security of that mine and, as such, get money from Thuringia for the time being?
Yes.
Yeah. That is 20 million per year or something.
Roughly, yeah. That for eternity. That's a big issue for Thuringia. We wanted to help them to mitigate it. It's unfortunate.
We have a follow-up from Aron Ceccarelli from Berenberg.
Hello. Hi. I have a couple of follow-ups, please. The first one is on the effects. Can you close what's the sensitivity to changes in the Canadian dollar to euro, please?
Sensitivity of FX.
Sensitivity. Yes. We say if you have a decrease of around about 5% of the US dollar.
$0.5 .
$0.5 , sorry. From $1.10- $1.05, for example, then we have an EBITDA effect of plus around about EUR 60 million because a stronger US dollar is positive for us. In the other direction, if you see a $1.515, for example, for the US dollar, then we have an EBITDA effect of around about minus EUR 7 million.
Do you have exposure to Canadian dollar?
No. We are not selling in the Canadian market. Our products we are selling to the international markets, to the U.S. markets, and the rest of the world is mainly contracted in US dollar, in Europe, in euro. We only have our costs, personal costs, equipment costs, what is local. That is not the big effect for our EBITDA.
Thank you.
That's close to the US dollar.
When you mentioned before that 50% of your gas consumption is hedged at EUR 40 per MWh , is this total gas consumption, or is it just European or German?
That's European. That's why I mentioned that we are totally hedged for the Canadian gas, but that's not as volatile as in Europe. That's pretty flat around EUR 6, EUR 6 a MWh . If you compare the Canadian gas level with the European, it's a big difference. That's why we are so happy that we finally need with our solution mine. We are able to produce more than 2 million tons with around about 500 people. We have some more gas consumption, but gas is pretty cheap in Canada. That's why we are pretty happy to have this mine.
The €6 a MWh in Canada.
Canada.
Yeah.
In Canada.
Compared to what level in 2024?
That's pretty flat.
Flat.
You don't see this volatility in the Canadian market.
Thank you very much.
Yes, we have another question from the room, Axel Herlinghaus from DZ Bank.
Yes, thank you very much. How do you assess the stability of production in Russia if you take into account the politically desired prioritization of the arms industry? In this context, how do you assess Uralkali's latest maintenance announcement from mid-February? Is this business as usual, or is this a first sign of neglected infrastructure, perhaps?
Another good question. We had some insight into Russia and Belarus before the war because we always had some technicians over there. They were in our minds, and we shared some technical knowledge. That ended all with the war, so I can only guess on that.
One thing is for sure, they were planning significant brownfield extensions, and they are not working on that. I think money and technology and people are the issues. Even if the war should end, I think that will take long before they even think about these brownfield extensions again. That is another reason why the market is in such good condition currently. That is true for both, for Belarus and for Uralkali.
Thank you. And EuroChem. Sorry?
And EuroChem.
And EuroChem
Last chance to raise your hand in Teams. I don't see any question in Teams anymore. Are there any questions from the room? No.
As there are no more questions, I have some final remarks. That was my last dialogue with you all. I know there is still a Q1 disclosure before I leave, but that will be made by my colleagues. I will supervise. Without joking, I always enjoyed the dialogue with the capital markets, with you especially. You were always fair to us. Thank you very much for that. Please be as fair as you were to me, to Jens and Christian. Thank you very much, and good luck.