SANTIAGO, Chile, Aug. 24, 2017 /PRNewswire/ --
Highlights
- SQM reported net income for the six months ended June 30, 2017 of US$204.4 million.
- Earnings per ADR totaled US$0.78 for the first half of 2017, higher than the US$0.54 reported for the first half of 2016.
- Revenues for the first half of 2017 were US$1,023.9 million, 16.2% higher than revenues for the first half of 2016.
- SQM will hold a conference call to discuss these results on Thursday, August 24, at 11:00am ET (12:00pm Chile time).
Participant Dial-In (Toll Free): 1-855-238-1018
Participant International Dial-In: 1-412-542-4107
Webcast: http://services.choruscall.com/links/sqm170824.html - SQM will hold an Investor Day in New York at September 7, 2017. Patricio de Solminihac along with senior management from the finance and operations teams will also join.
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, 2017 of US$204.4 million (US$0.78 per ADR), an increase from US$141.6 million (US$0.54 per ADR), representing a 44.3% increase compared to the earnings reported for the six months ended June 30, 2016. Gross profit reached US$357.8 million (35.0% of revenues) for the six months ended June 30, 2017, higher than US$260.5 million (29.6% of revenues) recorded for the six months ended June 30, 2016. Revenues totaled US$1,023.9 million for the six months ended June 30, 2017, representing an increase of 16.2% compared to US$881.5 million reported for the six months ended June 30, 2016.
The Company also announced earnings for the second quarter of 2017, reporting net income of US$101.2 million (US$0.38 per ADR) compared to US$83.1 million (US$0.32 per ADR) for the second quarter 2016. Gross profit for the second quarter 2017 reached US$179.9 million; higher than the US$146.9 million recorded for the second quarter 2016. Revenues totaled US$505.7 million, an increase of approximately 3.3% compared to the second quarter 2016, when revenues amounted to US$489.6 million.
SQM's Chief Executive Officer, Patricio de Solminihac, stated, "We are pleased with the results we published today. The EBITDA for this first half of the year was US$433 million. Sales volumes in the specialty plant nutrition business line were the strongest reported in recent history. As anticipated, the sales volumes in the potassium chloride business line were down compared to the second quarter last year; we are still expecting that sales volumes in this business line will be between 1.2 and 1.3 million MT this year as we maximize lithium production. Also as anticipated, potassium chloride prices have stabilized at higher levels than last year."
"In the lithium market, we continue to see strong demand growth. We expect the average price in the second half to be higher than the average price seen during the first half of this year. We continue to move forward with our new projects; in Chile, the lithium hydroxide expansion and the lithium carbonate expansion are expected to be completed by the middle of 2018. In Argentina, we are working on the hydrogeological model with the corresponding drilling, a key component of the final development stage. Finally, during July, we announced a 50/50 joint venture with Kidman Resources to develop a 40,000 MT lithium project in western Australia, the high-quality Mount Holland project. These initiatives are in line with our strategic plan to continue developing lithium projects where our competitive advantages and expertise add significant value to a growing and attractive market."
"In the iodine market, we have been working over the past several years to increase our sales volumes in line with our corporate strategy and operational plan. This year our market share should return to levels seen before the price boom period. During the first half of 2017, we saw sales volumes reach the highest levels reported during any six-month period. As anticipated, these higher sales volumes have come with lower prices, but given our current cost position, margins are healthy. Because of the higher sales volumes we have seen in recent quarters, and expectations that this trend will continue in the future, we are adding new iodine capacity in Nueva Victoria. We expect that this expansion will bring our total capacity to approximately 14,000 MT, and it is expected to be operational in mid-2018."
About SQM
SQM is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, 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 business strategy is to be a mining operator that selectively integrates the production and sales of products to industries essential for human development, such as food, health and technology. The strategy is built on the following six principles:
- strengthen internal processes to ensure access to key resources required for the sustainability of the business;
- extend lean operations (M1) to the entire organization to strengthen our cost position, increase quality and ensure safety;
- invest in the development of a specialty fertilizer market, including product differentiation, sales channel management and price optimization;
- recover the iodine market share, seek consolidation and vertical integration opportunities; invest in the development of industrial nitrate applications;
- search and invest in lithium and potassium assets outside of Chile to leverage our operational capabilities, take advantage of the current lithium market appeal and ensure access to raw materials for our potassium nitrate production; and
- seek diversification opportunities in gold, copper and zinc projects in the region to leverage our mining operating capabilities and provide business continuity to our exploration program.
The business strategy´s principles are based on the following four concepts:
- build an organization with strategic clarity, inspirational leaders, responsible personnel and strong values;
- develop a strategic planning process that responds to the needs of our customers and market trends, while ensuring coordination between all segments of the business, including sales and operations;
- develop a robust risk control and mitigation process to actively manage business risk; and
- 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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