SANTIAGO, Chile, March 1, 2017 /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, 2016 of US$278.3 million (US$1.06 per ADR), an increase from US$213.2 million (US$0.81 per ADR) reported for the twelve months ended December 31, 2015 (the 2016 results were affected by the write-off related to stopping the operations of the train, which had a one-time, before-tax effect of US$32.8 million on net income, while the 2015 results were impacted by the stopping of the operations at Pedro de Valdivia, which had a one-time, before-tax impact of US$57.7 million). Gross profit(3) reached US$611.0 million (31.5% of revenues) for the twelve months ended December 31, 2016, higher than US$542.7 million (31.4% of revenues) recorded for the twelve months ended December 31, 2015. Revenues totaled US$1,939.3 million for the twelve months ended December 31, 2016, representing an increase of 12.2% compared to US$1,728.3 million reported for the twelve months ended December 31, 2015.
The Company also announced earnings for the fourth quarter of 2016, reporting net income of US$80.9 million (US$0.31 per ADR) compared to US$44.6 million (US$0.17 per ADR) for the fourth quarter of 2015. Gross profit for the fourth quarter 2016 reached US$204.8 million; higher than the US$118.0 million recorded for the fourth quarter 2015. Revenues for the fourth quarter 2016 totaled US$553.8 million, an increase of approximately 34.6% compared to the fourth quarter 2015, when revenues amounted to US$411.3 million.
We entered into an agreement with the Department of Justice and the Securities and Exchange Commission, both of the United States of America pursuant to the terms disclosed by the Company on January 13, 2017. These agreements had a one-time impact on the fourth quarter 2016 results of US$30.5 million.
SQM's Chief Executive Officer, Patricio de Solminihac, stated, "We ended 2016 with a very strong fourth quarter; our EBITDA reached US$238.9 million, and contributed to the EBITDA of US$761.0 million that we reported for the year. Higher lithium sales volumes and higher lithium average prices were the main contributors to these strong fourth quarter results, higher sales volumes related to potassium chloride, iodine and solar salts(4) also played an important role."
"Lithium sales volumes almost reached 50,000 MT for the year, and average prices during the fourth quarter surpassed prices seen in earlier quarters during 2016. Sales volumes seen during the fourth quarter exceeded 14,000 MT, a record for us. We remain uncertain about future lithium prices, as new supply and timing of new projects will be an important factor during 2017. It is anticipated that new supply could enter the market during the second half of 2017. We believe lithium demand could grow over 10% per year in the near term."
He continued by saying, "As we look to take advantage of the strong lithium market, we will focus our production process on maximizing lithium yields, trying to reach similar sales volumes in 2017 as seen in 2016. This in turn could lead to a decrease in potassium chloride production in 2017, and potassium chloride sales volumes, that were up over 24% in 2016 compared to 2015, could decrease in the future. We believe in recent months, potassium chloride prices have reached a bottom, and in some cases, we have seen slight price recovery. However, we still believe that average prices in 2017 will be lower than average prices seen during 2016. In the SPN business line, prices decreased during 2016, and could decrease further in coming quarters."
He closed by saying, "Our sales volumes of iodine and derivatives grew over 13% when compared to the fourth quarter last year, reporting the strongest quarterly sales volumes seen in recent years, and the strongest annual sales volumes seen since 2012. Prices continued to decline as anticipated, but we regained market share in line with our objective, closing the year with a market share of approximately 29%. We expect sales volumes in 2017 to be slightly higher than sales volumes seen during 2016. We have seen prices stabilizing in recent months, however, we still expect average prices during 2017 to be lower than average prices reported during 2016."
For the complete version of this press release, please visit our IR Web site: http://ir.sqm.com/English/investor-relation/default.aspx
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.
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SOURCE Sociedad Quimica y Minera de Chile, S.A.