SANTIAGO, Chile, May 18, 2016 /PRNewswire/ -- Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) reported earnings today for the three months ended March 31, 2016 of US$58.5 million (US$0.22 per ADR), a decrease from US$71.7 million (US$0.27 per ADR) reported for the three months ended March 31, 2015. Gross profit reached US$113.6 million (29.0% of revenues) for the three months ended March 31, 2016, lower than US$130.7 million (33.7% of revenues) reported for the three months ended March 31, 2015. Revenues totaled US$391.8 million for the three months ended March 31, 2016, similar to the US$387.5 million reported for the three months ended March 31, 2015.
SQM's Chief Executive Officer, Patricio de Solminihac, stated, "During the first quarter of 2016, as anticipated, the downward trend in iodine prices and the weakness in potash prices continued, impacting our margins. Potash sales volumes were higher this quarter compared to the first quarter of last year, which helped to offset the impact on revenues, although adverse weather conditions at the port caused some shipments to be postponed to the second quarter. We believe we are on track to see a recovery in our potash volumes for the full year, returning to levels similar to those reported in 2014. In fact, we expect to see higher sales volumes across all of our business lines for the full year, although margins will continue to reflect lower iodine and potash prices."
He went on to say, "Pricing in the specialty plant nutrition business has been more stable than potash pricing, and our leading position in the potassium nitrate market has helped us to keep revenues stable in the face of uncertainty in the potash market. The best news of the quarter has been our lithium business, where we saw significant revenue growth. In response to strong global demand for lithium, we are working to deliver more volumes, and prices have also increased."
"In other lithium news, during the first quarter we were pleased to announce a joint venture with Lithium Americas to develop the Caucharí-Olaroz lithium project in Argentina, which is a great complement to our existing lithium operations in Chile. We are targeting a capacity of 40,000 tons with this joint venture, with production expected to begin by 2019. We believe that our years of experience in this business will contribute to the success of this project, and we should benefit from synergies with our Chilean lithium operations. We are confident that this joint venture will generate value for our shareholders."
Mr. de Solminihac concluded by saying, "Although we have faced many challenges during the last year, relating to both operating and non-operating matters, I am proud of the hard work I see every day across the company. Efforts to improve operating efficiency have become part of the culture, and we are constantly seeking new opportunities to improve and to grow. We are also committed to maintaining a solid financial position. We recently paid a special dividend to shareholders, and following that payment, all of our financial indicators remain well within our conservative internal targets. I believe that SQM is well positioned to take on the challenges and opportunities that the future will bring."
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.
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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 Sociedad Quimica y Minera de Chile, S.A. (SQM)