OREANDA-NEWS. November 18, 2009. Uralkali and Silvinit posted 9M09 RAS financials, showing QoQ rise in EBITDA and revenue, reported the press-centre of OTKRITIE Financial Corporation.

View: Because the companies substantially increased their capacity uitilization in Q3 amid new contract settlements, these improvements in financials were not unexpected. After 9M09, Silvinit's EBITDA was 30% above Uralkali's, due mainly to higher output. Silvinit was operating with a capacity utilization rate of 80% (and higher) from July, while Uralkali only reached this level in September. In 2010, the difference between the operating results of the two producers is likely to narrow.

Valuation and Action: Russian potash producers trade broadly in line with peers on both 2009E and 2010E EV/EBITDA multiples. We see limited upside potential in these stocks on current levels.