SANTIAGO, Chile, March 2, 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 twelve months ended December 31, 2015 of US$213.2 million (US$0.81 per ADR), a decrease from US$296.4 million (US$1.13 per ADR) reported for the twelve months ended December 31, 2014; these results were affected by the write-off related to stopping the operations of the mines in Pedro de Valdivia, which had a one-time, before-tax effect of US$57.7 million on net income. Gross margin(3) reached US$542.7 million (31.4% of revenues) for the twelve months ended December 31, 2015, lower than US$583.0 million (28.9% of revenues) recorded for the twelve months ended December 31, 2014. Revenues totaled US$1,728.3 million for the twelve months ended December 31, 2015, representing a decrease of 14.2% compared to US$2,014.2 million reported for the twelve months ended December 31, 2014.
The Company also announced earnings for the fourth quarter of 2015, reporting net income of US$44.6 million (US$0.17 per ADR) compared to US$78.0 million (US$0.30 per ADR) for the fourth quarter of 2014. Gross margin for the fourth quarter of 2015 reached US$118.0 million; lower than the US$140.4 million recorded for the fourth quarter of 2014. Revenues totaled US$411.3 million, a decrease of approximately 16.3% compared to the fourth quarter of 2014, when revenues amounted to US$491.4 million.
SQM's Chief Executive Officer, Patricio de Solminihac, stated, "During 2015, we faced many challenges, including lower prices and lower volumes impacting some of our business lines. As mentioned previously, our sales volumes in both the specialty plant nutrition and potassium segments were lower as a result of delays during the first half of 2015. We were not able to fully compensate for those delays during the second half of the year. In addition, prices have fallen significantly in the past twelve months in the potassium chloride and iodine markets. In the lithium business line, however, average prices rose over 10% compared to 2014, partially offsetting lower iodine and potassium chloride prices."
He continued by saying, "We continued to work on our cost reduction efforts. The restructuring of our nitrates and iodine operations during 2015 will improve our competitive position in the challenging iodine market by allowing us to further reduce production costs. As a clear result of our cost reduction initiatives, even considering lower prices, we were able to increase our EBITDA margin from 37% in 2014 to 42% in 2015."
"During December last year, the investigation that was carried out by the law firm Shearman & Sterling concluded. The results of the investigation were reported to the Board and were submitted to the relevant regulatory agencies in Chile and the United States. The Company is fully committed and focused on its core businesses and on the development of potential new business initiatives."
Mr. de Solminihac closed by saying, "As we look to 2016, we will continue to see challenges in pricing in some of our major business lines. Prices in the first part of the year related to iodine and potassium chloride have continued to fall. However, we look forward to seeing potassium chloride and potassium sulfate sales volumes increasing approximately 20% during 2016. We also expect iodine sales volumes in 2016 to exceed sales volumes reported during 2015. In the lithium market, we continue to lead the world as the lowest cost producer, and we believe that average prices in this business line will be higher in 2016. We have decreased costs in a sustainable way, increased efficiencies throughout the Company and maintained a strong balance sheet within a tough commodity environment. We have a great team in place and I look forward to taking on new challenges and opportunities in 2016."
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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.
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.