K+S ditched making full-year forecasts and said it was preparing to slash its dividend for the first time in at least a decade as it announced that a continuing buyers' strike by farmers had dumped it in the red.

The German fertilizer and salt giant said that the "extremely difficult and uncertain situation" in the fertilizer sector had prompted it to ditch its "customary approach" of, in August, publishing detailed full-year earnings forecasts.

However, it braced investors for a "significant" drop in revenues for the full-year, led by a drop in sales volumes and prices in fertilizer.

Earnings would be "down sharply", a decline which would have a "corresponding impact on the dividend", which it hiked from E0.50 a share to E2.40 a share last year.

Customer 'restraint' 

The outlook reflected a lingering reluctance by farmers to fork out on fertilizer following the slump in crop prices from last year's highs.

"Agriculture is continuing to display restraint with respect to the purchase and use of fertilizers, especially in Europe," Norbert Steiner, the K+S chairman, said.

"There is no sign yet of the normalisation of demand."

Nitrogen loss 

In the April-to-June quarter, demand for potash had been "exceptionally weak", driving operating profits at K+S's potash division down 81% to E53.8m on revenues down 42% at $354.3m.

The group's nitrogen division slumped to a E26.6m operating loss, compared with a E44.0m profit a year before, as price cuts failed to stimulate demand.

"Only the straight nitrogen fertilizer business saw the first signs of an improvement towards the end of the quarter," K+S said.

The group slumped to a E30.1m loss of the period, compared with earnings of E226.3m a year before.

K+S shares closed down E0.29 higher at E36.94 in Frankfurt, taking their decline since warning on potash sales two months ago to 26%.