SANTIAGO, Chile, May 19, 2020 /PRNewswire/ --
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Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) reported earnings today for the three months ended March 31, 2020 of US$45.0 million (US$0.17 per share), a decrease from US$80.5 million (US$0.31 per share) reported for the three months ended March 31, 2019. Gross profit reached US$107.7 million (27.5% of revenues) for the three months ended March 31, 2020, compared to US$145.5 million (28.9% of revenues) recorded for the three months ended March 31, 2019. Revenues totaled US$392.0 million for the three months ended March 31, 2020, representing a decrease of 22.3% compared to US$504.2 reported for the three months ended March 31, 2019.
SQM's Chief Executive Officer, Ricardo Ramos, stated: "Our sales during the first quarter of this year were significantly impacted by the COVID-19 pandemic, and it is reasonable to expect that, along with the rest of the world, we will continue to see impacts. Our first concern is, and has always been, the well-being and safety of our employees and their families, as well as our neighboring communities. Early on, with the help of experts in the field, we implemented several measures, accommodating and changing the way in which we work in an effort to safeguard the health of all of our employees and collaborators. As a result of these efforts, we have been able to continue to operate at normal levels over the past months. At the same time, we have been working with our neighboring communities to provide them support during these difficult times."
Mr. Ramos continued, "We reported earnings for the three months ended March 31, 2020 of US$45 million, lower than what we reported for the same period last year, primarily as a result of the expected lower average lithium prices. This quarter, average lithium prices were almost 50% lower than average prices seen during the same period last year. Furthermore, the COVID-19 pandemic limited our ability to sell during the end of the first quarter, particularly in the lithium market, as Asian markets were heavily affected during the first months of this year. On the other hand, average iodine prices were over 25% higher than average prices reported during the same period last year."
"Current global economy conditions are uncertain, making it difficult to predict the future supply and demand of the markets in which we participate. As a result, there is a chance the sales volumes and average prices we previously estimated for all of our business lines may vary. However, we believe that our sales volumes should be higher in the remaining quarters of 2020, especially in the lithium business line. We have seen some markets starting to get back to normal levels of activity while in some others, the economic activity continues at weaker levels. Fertilizers have been declared essential in most places, and the demand of some of the products that we produce and sell may not be significantly impacted by the pandemic."
Mr. Ramos concluded by saying, "We have always maintained a strong balance sheet to allow us to react to opportunities and challenges; we reported a cash position of approximately US$1.4 billion dollars. In April, we paid back a bond of US$250 million, and our next relevant maturity is not due until April 2023. Our dividend policy, while it aims to maximize returns to investors, also considers important ratios to ensure a healthy cash position. Our capex plan for 2020 has been adjusted to US$350 million".
SQM is a global company that develops and produces diverse products for several industries essential for human progress, such as health, nutrition, renewable energy and technology through innovation and technological development. We aim to maintain our leading world position in the lithium, potassium nitrate, iodine and thermo-solar salts markets by producing high-quality products and promoting a high- quality culture to meet the dynamic and changing requirements of our customers.
We are a company built and managed by people committed to excellence, safety and integrity. We work every day to build a culture of excellence by encouraging and promoting creativity, agility and innovation in the workplace and ensuring equality of opportunities, inclusion and diversity. We seek to create opportunities for professional development so that people achieve their maximum potential. We make ongoing efforts to meet the high standards of integrity described in our code of ethics while actively identifying and implementing ideas to better meet these standards. We strive for safe and accident-free operations by promoting conduct that favors the physical safety and psychological well-being of everyone who works directly and indirectly with the Company.
We participate in the development of the well-being of local communities by supporting projects and activities with a focus on education, business development, and protection of the environment and historical heritage. We will continue to create value for all of our stakeholders through responsible management of natural resources, sustainable expansion projects and improvement of our existing operations, with a focus on minimizing our environmental impacts by reducing our carbon, energy and water footprints and working together with our shareholders, employees, customers, suppliers and communities.
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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)