SANTIAGO, Chile, Nov. 21, 2018 /PRNewswire/ -- 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, 2018 of US$331.2 million (US$1.26 per ADR), an increase from US$317.2 million (US$1.21 per ADR) for the nine months ended September 30, 2017. Gross profit reached US$580.7 million (34.1% of revenues) for the nine months ended September 30, 2018, higher than US$546.4 million (34.5% of revenues) recorded for the nine months ended September 30, 2017. Revenues totaled US$1,700.6 million for the nine months ended September 30, 2018, representing an increase of 7.5% compared to US$1,582.5 million reported for the nine months ended September 30, 2017.
The Company also announced earnings for the third quarter of 2018, reporting net income of US$83.5 million (US$0.32 per ADR) compared to US$112.9 million (US$0.43 per ADR) for the third quarter of 2017. Gross profit for the third quarter of 2018 reached US$163.7 million, lower than the US$188.5 million recorded for the third quarter of 2017. Revenues totaled US$543.2 million, a decrease of approximately 2.8% compared to the third quarter of 2017, when revenues amounted to US$558.7 million.
SQM's Chief Executive Officer, Patricio de Solminihac, stated: "During 2017, we announced an important lithium expansion near Antofagasta, which would allow us to increase our capacity by almost 50%. This project, which entailed a complete overhaul of our existing plant had a quick timeline, and a very low capex. The commissioning of the fully upgraded plant, as previously announced, has been more challenging than expected, impacting our ability to produce high quality lithium during the third quarter, affecting our sales volumes. We are working diligently to resolve these issues as soon as possible. The ramp-up delay will likely impact our fourth quarter lithium and derivative sales volumes, delaying part of these volumes to the first quarter of 2019. Lithium sales volumes this year should be around 45,000 MT."
He continued by saying, "As we reach the end of the year, we have been positively surprised by the demand growth in the lithium market, especially lithium hydroxide. We believe that total lithium demand growth will surpass 25% this year. As a result, prices in the lithium market remain strong, our average prices during the third quarter remained relatively flat compared to the second quarter. We believe that the prices reported during the fourth quarter will be similar to the third quarter."
Mr. de Solminihac went on to say, "We have seen positive trends in our other business lines as well. Prices for potassium chloride in the third quarter increased over 15% when compared to last year. Specialty plant nutrient sales volumes increased almost 10% compared to the third quarter 2017, and iodine prices exceeded expectations, reaching almost US$25/kg. We believe iodine and derivatives sales volumes could surpass 13,500 MT this year."
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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.
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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.
SOURCE Sociedad Quimica y Minera de Chile, S.A. (SQM)