SANTIAGO, Chile, Nov. 22, 2017 /PRNewswire/ --
- SQM reported net income for the nine months ended September 30, 2017 of US$317.2 million.
- Revenues for first nine months of 2017 were US$1,582.5 million, higher than revenues in the nine months of 2016.
- EBITDA margin for the nine months ended September 30, 2017 reached 41%, while EBITDA margins for the third quarter 2017 reached approximately 40%.
- Updated Information: SQM will hold a conference call to discuss these results on Thursday, November 23 at 10:00am ET (12:00pm Chile time).
Participant Dial-In (Toll Free): 1-855-238-1018
Participant International Dial-In: 1-412-542-4107
Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM) reported today earnings for the nine months ended September 30, 2017 of US$317.2 million (US$1.21 per ADR), an increase from US$197.4 million (US$0.75 per ADR) for the nine months ended September 30, 2016. Gross profit reached US$546.4 million (34.5% of revenues) for the nine months ended September 30, 2017, higher than US$406.2 million (29.3% of revenues) recorded for the nine months ended September 30, 2016. Revenues totaled US$1,582.5 million for the nine months ended September 30, 2017, representing an increase of 14.2% compared to US$1,385.5 million reported for the nine months ended September 30, 2016.
The Company also announced earnings for the third quarter of 2017, reporting net income of US$112.9 million (US$0.43 per ADR) compared to US$55.8 million (US$0.21 per ADR) for the third quarter of 2016. Gross profit for the third quarter of 2017 reached US$188.5 million, higher than the US$145.7 million recorded for the third quarter of 2016. Revenues totaled US$558.7 million, an increase of approximately 10.8% compared to the third quarter of 2016, when revenues amounted to US$504.0 million.
SQM's Chief Executive Officer, Patricio de Solminihac, stated: "The results we published for the first nine months of 2017 are a result of our strong position in all of the markets in which we are present. In the specialty plant nutrient business line strong sales volumes were due to strong demand growth along with decreased supply from our competition. Our operations team has been able to increase production in an efficient way, allowing us to increase our volumes while maintaining the supply and demand equilibrium in the market. Our sales volumes increased almost 9% during the first nine months of this year compared to the same period last year. In the potassium chloride market, our sales volumes surpassed 1.0 million MT during the first nine months of the year. Sales volumes for 2017 could surpass 1.3 million MT, a decrease compared to last year, but higher than our previous expectations."
"In the lithium market, we continue to see strong demand growth and we saw prices continue to increase during the third quarter, surpassing US$13,000/ton, thus increasing another 8% compared to the second quarter. We believe this pricing trend should continue for the remainder of this year, and through the beginning of 2018. We continue to move forward with our new lithium projects. Our projects in Chile remain on time, and we expect to complete our lithium hydroxide and lithium carbonate expansions by the middle of 2018. In Argentina, we are investing in the first stage of the 25,000 MT expected to be online in 2019, and in Australia we finalized the documentation required to move forward with the joint venture with Kidman Resources."
"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. Market share has returned to levels greater than 30%, and we believe sales volumes will surpass 12,500 MT this year. Given these increase sales volumes, we are increasing our iodine production capacity to reach just over 14,000 MT as we want to ensure the supply is available to meet the demand of the future. With prices slightly higher than prices seen during the second quarter, we are optimistic about our future in the iodine market."
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.
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.