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SQM Reports Earnings for the Second Quarter of 2018

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SQM Reports Earnings for the Second Quarter of 2018

PR Newswire

SANTIAGO, Chile, Aug. 22, 2018 /PRNewswire/ -- Sociedad Química y Minera de Chile S.A. (SQM) (NYSE:SQM, Santiago Stock Exchange: SQM-B, SQM-A)) reported earnings today for the six months ended June 30, 2018 of US$247.7 million (US$0.94 per ADR), an increase from US$204.4 million (US$0.78 per ADR), representing a 21.2% increase compared to the earnings reported for the six months ended June 30, 2017. Gross profit reached US$417.1 million (36.0% of revenues) for the six months ended June 30, 2018, higher than US$357.8 million (35.0% of revenues) recorded for the six months ended June 30, 2017. Revenues totaled US$1,157.4 million for the six months ended June 30, 2018, representing an increase of 13.0% compared to US$1,023.9 million reported for the six months ended June 30, 2017.

The Company also announced earnings for the second quarter of 2018, reporting net income of US$133.9 million (US$0.51 per ADR) compared to US$101.2 million (US$0.38 per ADR) for the second quarter 2017. Gross profit for the second quarter 2018 reached US$224.4 million; higher than the US$179.9 million recorded for the second quarter 2017. Revenues totaled US$638.7 million, an increase of approximately 26.4% compared to the second quarter 2017, when revenues amounted to US$505.3 million.

SQM's Chief Executive Officer, Patricio de Solminihac, stated, "Our results for the first half of 2018 were positive, led primarily by the lithium business. We expect our sales volumes in the lithium business line to be almost 50% higher in the second half of the year, compared to the first half, bringing total sales volumes to over 50k MT during 2018. Average prices in this business line were slightly higher during the second quarter. We see demand growth in 2018 surpassing 20%; as expected, new supply has been entering the market, mostly from Australia. Considering our higher sales volumes and the new supply, prices could be slightly lower in the second half of the year but significantly higher than average prices reported last year."

Mr. de Solminihac continued, "The strong results were also driven by positive performance in the specialty plant nutrition and iodine business lines, both reported record sales volumes during the second quarter, and both are on target to reach record sales volumes for the year. Iodine prices have risen, and were over 25% higher during the second quarter this year, when compared to the same period of 2017. We have finished our expansion in iodine reaching 14k MT and continue working towards a nitrates capacity of 1.5 million MT. Our current capacity is 1.3 million MT of nitrates per year. In the potassium chloride market, sales volumes were down significantly during the first half of the year as announced, and is a result of our focus on increasing lithium yields."

He went on to say, "Over the past several months, we have also been working diligently on our lithium expansion projects. We recently finished the first stage of our lithium carbonate expansion in Chile, reaching a capacity of 70k MT/year in the Salar del Carmen. The new capacity is already in operation and we expect to be producing at 70k MT/year during the fourth quarter of this year. Our next step will be to work towards our goal of 120k MT/year, which is expected to be completed by the end of 2019. Furthermore, we reaffirm our strong commitment to the Mt. Holland project in Australia; a key lithium asset for our portfolio. This is a very large rock deposit with significant exploration upside. We have secured a key industrial site for the future refinery where we expect to produce at least 45k MT of lithium hydroxide per year. We recently announced that we are selling our stake in the Cauchari-Olaroz project in Argentina. The transaction is expected to be closed during the fourth quarter of this year."

For the complete version of this press release, please visit our IR Web site: http://ir.sqm.com/English/investor-relation/default.aspx

About SQM

SQM's business strategy is to be a global company, with people committed to excellence, dedicated to the extraction of minerals and selectively integrated in the production and sale of products for the industries essential for human development (e.g. food, health, technology). This strategy was built on the following five principles:

  • ensure availability of key resources required to support current goals and medium and long-term growth of the business;
  • consolidate a culture of lean operations (M1 excellence) through the entire organization, including operations, sales and support areas;
  • significantly increase nitrate sales in all its applications and ensure consistency with iodine commercial strategy;
  • maximize the margins of each business line through appropriate pricing strategy;
  • successfully develop and implement all lithium expansion projects of the Company, acquire more lithium and potassium assets to generate a competitive portfolio.

These principles are based on the following key concepts:

  • strengthen the organizational structure to supports the development of the Company's strategic plan, focusing on the development of critical capabilities and the application of the corporate values of Excellence, Integrity and Safety;
  • develop a robust risk control and mitigation process to actively manage business risk;
  • improve our stakeholder management to establish links with the community and communicate to Chile and worldwide our contribution to industries essential for human development.

For further information, contact:

Gerardo Illanes 56-2-24252022 / gerardo.illanes@sqm.com
Kelly O'Brien 56-2-24252074 / kelly.obrien@sqm.com 
Irina Axenova 56-2-24252280 / irina.axenova@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.

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SOURCE SQM

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