SANTIAGO, Chile, Aug. 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 six months ended June 30, 2016 of US$141.6 million (US$0.54 per ADR), a decrease from US$154.9 million (US$0.59 per ADR) for the six months ended June 30, 2015. Gross Margin reached US$260.5 million (29.6% of revenues) for the six months ended June 30, 2016, lower than US$295.2 million (33.9% of revenues) recorded for the six months ended June 30, 2015. Revenues totaled US$881.5 million for the six months ended June 30, 2016, representing an increase of 1.1% compared to US$871.8 million reported for the six months ended June 30, 2015.
The Company also announced earnings for the second quarter of 2016, reporting net income of US$83.1 million (US$0.32 per ADR) compared to US$83.2 million (US$0.32 per ADR) for the second quarter of 2015. Gross margin for the second quarter of 2016 reached US$146.9 million; lower than the US$164.6 million recorded for the second quarter of 2015. Revenues totaled US$489.6 million, an increase of approximately 1.1% compared to the second quarter of 2015, when revenues amounted to US$484.2 million.
SQM's Chief Executive Officer, Patricio de Solminihac, stated, "During the first half of 2016 we saw higher volumes of potassium chloride, iodine, lithium and specialty plant nutrients. These higher sales volumes were in line with our expectations as were the market trends in general: higher prices in lithium, the continued downward trend in iodine prices and lower average prices of potassium products."
"In the fertilizer markets, potassium chloride sales volumes for the first six months of 2016 were up over 14% 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 that we saw last year. Following the closure of potassium chloride contracts between other potash producers and China, we have seen some slight price recovery recently, and hope that this trend will continue during the remainder of 2016."
"Pricing in the specialty plant nutrition business line has been more stable than in the potassium chloride and potassium sulfate business line, but we did see a slight decrease of almost 4% during the first half of the year, mainly as a result of lower potassium chloride prices. These lower prices were mostly offset by higher sales volumes, specifically related to our water soluble products, a market where we still expect to see market growth during 2016."
"Our sales volumes of iodine continue to grow, as proof, in the second quarter we reported the strongest sales volumes we have seen in years. However, we do not expect the downward price pressure to soften in the near future."
He went on to say, "We continue to believe in the solar salts market, but due to some delays in concentrated solar power plant projects, it is estimated that solar salt sales volumes during 2016 will not reach the 70,000MT that we had originally anticipated. We believe that the majority of these sales volumes will be delayed."
Mr. de Solminihac concluded by saying, "The lithium market continues to demand more supply from major players. In response to this need, our sales volumes grew over 30% during the first half of this year when compared with 2015. We expect our sales volumes will surpass our original expectations, and we could see sales volumes increase over 25% when compared to sales volumes seen last year. These higher volumes will be further emphasized by the higher prices of both lithium carbonate and lithium hydroxide. In other lithium news, we continue to move forward with our partner Lithium Americas on the feasibility study related to the Caucharí-Olaroz lithium project in Argentina. We are pleased to announce that we now expect production capacity could reach 50,000MT. This capacity will be brought to the market in two stages of 25,000MT each, and as originally planned, we are anticipating that construction will begin during the first half of 2017."
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)