SANTIAGO, Chile, Nov. 24, 2016 /PRNewswire/ -- Sociedad
Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock
Exchange: SQM-B, SQM-A) reported today earnings for the
nine months ended September 30,
2016 of US$197.4 million
(US$0.75 per ADR), an increase from
US$168.6 million (US$0.64 per ADR) for the nine months ended
September 30, 2015. Gross
profit reached US$406.2 million
(29.3% of revenues) for the nine months ended September 30, 2016, lower than US$424.8 million (32.3% of revenues) recorded for
the nine months ended September 30,
2015. Revenues totaled US$1,385.5 million for the nine months ended
September 30, 2016, representing an
increase of 5.2% compared to US$1,317.0
million reported for the nine months ended September 30, 2015.
The Company also announced earnings for the third quarter of
2016, reporting net income of US$55.8
million (US$0.21 per ADR)
compared to US$13.7 million
(US$0.05 per ADR) for the third
quarter of 2015. Gross profit for the third quarter of 2016
reached US$145.7 million; higher than
the US$129.5 million recorded for the
third quarter of 2015. Revenues totaled US$504.0 million, an increase of approximately
13.2% compared to the third quarter of 2015, when revenues amounted
to US$445.2 million.
As a result of the rains that affected the area of Tocopilla in
August 2015, the railway between
Coya Sur and Tocopilla was damaged
and the train stopped operating at that time. Since then, SQM has
been using trucks to move the product from Coya Sur to Tocopilla. Detailed engineering
studies were performed to assess the damage of the railway. During
the third quarter of 2016, the report was completed; it concluded
that the cost and time needed to repair the railway at this time is
not economical in the short and medium term. As a result of this
determination, the Company wrote-off the assets related to the
train, and reported a non-cash, one-time before-tax impact of
approximately US$33 million to its
third quarter 2016 financial statements. The amount represents
approximately 0.7% of the total assets of the Company. The net
income comparison between the third quarter of 2016 and the third
quarter of 2015 is also affected by the write-off related to
stopping the operations of the mines in Pedro de Valdivia, which had a one-time,
before-tax effect of US$56.3 million
on net income in 2015.
SQM's Chief Executive Officer, Patricio
de Solminihac, stated, "The third quarter results were
mainly driven by the higher lithium prices seen during this
quarter. In general, trends seen during the third quarter were in
line with what we have seen in previous months: higher prices in
lithium, lower prices in iodine, lower average prices in the
potassium chloride market, and increased price pressure in the
specialty plant nutrient market. Lithium volumes and prices
exceeded expectations during the third quarter. We expect total
market demand growth to be between 12-13% this year. For upcoming
years, we expect growth to be between 8-10%. During the third
quarter, we also announced plans to invest approximately
US$30 million in a lithium hydroxide
expansion project, which would allow us to more than double our
lithium hydroxide capacity. We believe this expansion will allow us
to further expand margins and maximize value in this business
line."
He continued by saying, "Our sales volumes of iodine continue to
grow, and this was no different in the third quarter when sales
volumes topped 2,600 MT. Sales volumes will grow during 2016, and
we expect total sales volumes to exceed 9,500 MT this year.
"In the fertilizer markets, potassium chloride sales volumes for
the first nine months of 2016 were up over 22% when compared to the
same period last year. We expect the sales volumes for 2016 to be
at least 20% stronger than the sales volumes we saw last year."
Mr. de Solminihac concluded by saying, "As part of our growth
strategy we are continuously looking for opportunities to develop
low-cost projects related to our core businesses where we believe
we can add value at the development stage and will have sustainable
competitive advantages. In March of this year, we announced a joint
venture with Lithium Americas to develop the Caucharí-Olaroz
lithium project in the Jujuy province of Argentina. We currently have sixty people
working on this project, and can report that the project still
expects to begin construction during the first half of 2017. In
September, we announced an investment of US$20 million in Elemental Minerals Limited,
which would grant us access to some potassium deposits in the
Republic of Congo; preliminary
studies suggest these deposits boast some of the highest grade
potassium available and could therefore potentially lead to some of
the lowest-cost production in the market. Feasibility studies are
currently being evaluated, and should be completed during
2018."
About SQM
SQM is an integrated producer and distributor of specialty plant
nutrients, iodine, lithium, potassium-related fertilizers and
industrial chemicals. Its products are based on the
development of high quality natural resources that allow the
Company to be a leader in costs, supported by a specialized
international network with sales in over 110 countries. SQM's
development strategy aims to maintain and strengthen the Company's
position in each of its businesses.
The leadership strategy is based on the Company's competitive
advantages and on the sustainable growth of the different markets
in which it participates. SQM's main competitive advantages in its
different businesses include:
- Low production costs based on vast and high quality natural
resources;
- Know-how and its own technological developments in its various
production processes;
- Logistics infrastructure and high production levels that allow
SQM to have low distribution costs;
- High market share in all its core products;
- International sales network with offices in 20 countries and
sales in over 110 countries;
- Synergies from the production of multiple products that are
obtained from the same two natural resources;
- Continuous new product development according to the specific
needs of its different customers;
- Conservative and solid financial position.
For further information, contact:
Gerardo Illanes 56-2-24252022 /
gerardo.illanes@sqm.com
Kelly O'Brien 56-2-24252074 /
kelly.obrien@sqm.com
For media inquiries, contact:
Carolina García Huidobro /
carolina.g.huidobro@sqm.com
Alvaro Cifuentes /
Alvaro.cifuentes@sqm.com
Tamara Rebolledo /
Tamara.rebolledo@sqm.com (Northern Region)
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: "anticipate,"
"plan," "believe," "estimate," "expect," "strategy," "should,"
"will" and similar references to future periods. Examples of
forward-looking statements include, among others, statements we
make concerning the Company's business outlook, future economic
performance, anticipated profitability, revenues, expenses, or
other financial items, anticipated cost synergies and product or
service line growth.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are estimates
that reflect the best judgment of SQM management based on currently
available information. Because forward-looking statements
relate to the future, they involve a number of risks, uncertainties
and other factors that are outside of our control and could cause
actual results to differ materially from those stated in such
statements. Therefore, you should not rely on any of these
forward-looking statements. Readers are referred to the
documents filed by SQM with the United States Securities and
Exchange Commission, specifically the most recent annual report on
Form 20-F, which identifies important risk factors that could cause
actual results to differ from those contained in the
forward-looking statements. All forward-looking statements are
based on information available to SQM on the date hereof and SQM
assumes no obligation to update such statements, whether as a
result of new information, future developments or otherwise.