Unassociated Document
UNITED
STATES OF AMERICA
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT OF
FOREIGN ISSUER
PURSUANT
TO RULE 13A-16 OR 15D-16
OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Includes
SQM’s earnings release for the period-ended March 31, 2010.
SOCIEDAD QUIMICA Y MINERA DE
CHILE S.A.
(Exact
name of registrant as specified in its charter)
CHEMICAL AND MINING COMPANY
OF CHILE INC.
(Translation
of registrant's name into English)
El Trovador 4285, Santiago,
Chile (562) 425-2000
(Address
and phone number of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F x Form
40-F o
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If "Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82________
For
Immediate Release
SQM
REPORTS EARNINGS FOR THE FIRST QUARTER OF 2010
Highlights
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SQM
reported net income for the first quarter of 2010 of US$76.5 million, a
decrease of 13.5% over the first quarter of
2009.
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·
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Earnings
per ADR totaled US$0.29 for the quarter, compared to US$0.34 for the same
period of 2009.
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·
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1Q10
revenues increased 21.0% year-over-year reaching US$388.5
million
|
Santiago, Chile, May 25, 2010.-
Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock
Exchange: SQM-B, SQM-A) reported today earnings for the first quarter of
20101 of
US$76.5 million (US$0.29 per ADR), a decrease of 13.5% with respect to the same
period of 2009, when earnings totaled US$88.4 million (US$0.34 per
ADR). Gross
Margin reached US$131.5 million (33.8% of revenues), 7.5% lower than the
US$142.1 million (44.2% of revenues) recorded during the first quarter of
2009. Revenues totaled US$388.5
million for the first quarter, representing an increase of 21.0% over the
US$321.1 million reported in the same period of 2009.
SQM’s
Chief Executive Officer, Patricio Contesse, stated, “After undergoing
unprecedented economic challenges during 2009, which negatively impacted global
markets, the first quarter of 2010 showed strong signs of a transition to
pre-crisis levels. We observed positive signs of recovery in all of our business
lines with higher volumes in each business segment in the first quarter of the
year compared to first quarter of 2009. Although prices in our fertilizer and
lithium businesses are lower than the same period last year, they are in line
with our expectations for 1Q10. Although there continues to be economic
uncertainty in global markets, improved economic conditions and a more
encouraging outlook in general have had a positive impact on our businesses, and
we expect this positive trend to continue throughout the year.”
Mr.
Contesse concluded, “Last year’s challenging conditions proved that our diverse
businesses and broad customer base make SQM more resilient compared to
fertilizer industry players under demanding market conditions. Sales volumes for
the first quarter of 2010 reflect the turnaround in markets, and we are
optimistic that the following quarters will continue to show promising signs of
growth and recovery for our businesses.”
1 Figures
for 1Q10 have been prepared according to IFRS standards, and 1Q09 numbers have
also been prepared according to IFRS for comparative purposes.
Segment
Analysis
Specialty Plant
Nutrition
Revenues
from our Specialty Plant Nutrition business line for the first three months of
2010 totaled US$128.2 million, 6.2% higher than the US$120.7 million recorded
for the same period in 2009.
The first
months of 2010 have reflected a positive shift from the uncertainty that
characterized much of 2009. Demand has begun to recover in important SPN
markets, and demand in particular for soluble potassium nitrate fertilizers has
improved positively. During 2009, many consumers in the SPN markets were
hesitant to make purchases due to the lack of an established price in major
potash markets. However, with newly established prices in major markets, growers
are making plans to purchase and apply fertilizer in all sectors. As a result we
have observed the comeback of healthy demand for our main SPN products during
the first quarter of 2010.
Although
average prices for the first quarter were considerably lower year-over-year,
current prices are approximately 5-10% lower than average prices recorded during
the second half of 2009, and we expect these prices to remain stable for 2010.
Volumes for this business line increased approximately 35% compared to the first
quarter of 2009, reflecting underlining confidence in fertilizer
markets.
We expect
this upward trend in volumes to continue throughout the year, and we anticipate
2010 sales volumes for SPN to be significantly higher than 2009 sales
volumes.
Specialty
Plant Nutrition gross
margin2
for the first three months of 2010 accounted for approximately 31% of SQM’s
consolidated gross margin.
Iodine and
Derivatives
Revenues
from sales of Iodine and Derivatives during the first three months of 2010
totaled US$62.9 million, an increase of 46.0% with respect to the US$43.1
million reported for the first three months of 2009.
After a
historically low first quarter in 2009, increased revenues were mainly a result
of significantly higher sales volumes and relatively flat average prices
compared to the same period last year. Improved economic circumstances and a
more encouraging outlook for global markets in general have had a positive
impact on the iodine industry during the first months of 2010. Certain
applications that are more sensitive to economic cycles, such as biocides used
in paints and LCD screens, have begun to recover somewhat sooner than initially
estimated, which in turn has led to higher sales volumes. Uses related to human
and animal health and nutrition have remained stable during the last few
quarters. Inventory levels throughout the supply chain have also returned to
more normal levels which has also positively affected sales during the first
quarter.
We expect
these improved circumstances in the iodine market to continue throughout the
year. As a result, we anticipate that sales volumes will continue to recover
during the year reaching normalized levels during the second half of the year.
We believe prices going forward should remain flat during the year.
Gross margin for the Iodine
and Derivatives segment accounted for approximately 20% of SQM’s consolidated
gross margin in the first three months of 2010.
Lithium and
Derivatives
Revenues
for Lithium and Derivatives totaled US$33.9 million during the first three
months of 2010, an increase of 38.2% with respect to the US$24.5 million
reported for the first three months of 2009.
The
lithium market has also shown encouraging signs of recovery during the first
quarter of 2010. A generally more optimistic outlook for global economic
conditions has also positively influenced the lithium market. Certain
applications, such as lubricating greases and other uses related to
construction, that were initially expected to recover at a slower rate have
begun to improve sooner than anticipated. Rechargeable batteries, traditionally
the main driver of the lithium market, have also bounced back during the first
quarter. Additionally, as in the case of iodine, many lithium consumers
throughout the supply chain are returning inventories to more normalized levels,
which has also positively affected our sales volumes. As a result, volumes
recorded during the quarter were substantially higher than those observed during
the fourth quarter of 2009 and higher than those of 1Q09, which was one of the
lowest quarters of the past years.
Prices in
this business segment have fallen approximately 20%, in line with the price
decline announced during September 2009. Lower prices have effectively helped to
bring back demand and to capture volume from certain applications which had
reduced their historic use of lithium, such as glass and ceramics.
We expect
this positive trend in demand to continue throughout the year, with sales
volumes increasing accordingly transitioning to pre-crisis levels.
Gross margin for the Lithium
and Derivatives segment accounted for approximately 12% of SQM’s consolidated
gross margin in the first three months of 2010.
Potassium Chloride &
Potassium Sulfate (MOP & SOP)3
Potassium
Chloride and Potassium Sulfate revenues for the first three months of 2010
totaled US$124.7 million, a 30.2% increase with respect to the first three
months of 2009, when revenues amounted to US$95.7 million.
The first
quarter of 2010 has reflected the transition from difficult market circumstances
of 2009 to a more stable environment. Important contracts were settled at the
end of 2009 and during the first months of 2010 which help bring a sense of
stability to the market, encouraging other important buyers in main markets to
begin making potash purchases. Consumer confidence in this market has improved
significantly since the first signs of market recovery at the end of 2009, and
the uncertainty regarding price stability declined remarkably.
In these
improved market conditions, we were able to double our potash sales during the
first quarter of 2010 compared to the same quarter the previous year. Average
prices during the first quarter of 2010 fell approximately 41% year-over-year,
reflecting price levels established in major potash markets at the end of 2009.
On average, prices for the second half of 2009 were substantially lower than
those observed during the first half of 2009; however, for 1Q10, prices were
slightly lower than 4Q09 prices. Consequently, we expect current price levels to
remain stable throughout the year.
Demand
fundamentals for this segment, both in the short and long term, remain solid as
farmers begin to apply fertilizer at more normalized rates, and distributors
continue to re-stock the supply chain. As a result, we expect volumes in this
market to continue to recover throughout the year, improving substantially over
2009 market demand.
Expansion
projects have moved forward according to plans, and we expect this year’s
production to be higher than 2009 production, allowing us to reach our sales
target of 1.2 million MT of MOP + SOP for the year.
Gross margin for potassium
chloride and potassium sulfate accounted for approximately 29% of SQM’s
consolidated gross margin in the first three months of 2010.
Industrial
Chemicals
Industrial
Chemicals revenues for the first three months of 2010 reached US$27.4 million,
22.6% higher than the US$22.4 million recorded for the same period of the
previous year.
During
the first quarter of 2010, volumes were approximately 21% higher than the same
period of the previous year as a result of the positive trend observed in the
general global economic recovery. Applications more sensitive to economic cycles
that were hard hit during the previous quarters have begun to recover in line
with the positive economic sentiment. Other applications, such as charcoal
briquettes and explosives, have remained stable.
In
addition, we continue to forecast positive growth for new projects that use
industrial-grade sodium and potassium nitrate in solar thermal energy storage.
Sales for this application should increase substantially over 2009. We
anticipate that the positive trend observed in industrial chemicals will
continue in the following quarters.
Gross margin for the
Industrial Chemicals segment accounted for approximately 8% of SQM’s
consolidated gross margin in the first three months of 2010.
Other Commodity Fertilizers
& Other Income
Revenues
from sales of other commodity fertilizers and other income reached US$11.4
million in the first three months of the year, down from the US$14.7 million for
the same period of the previous year.
Company
adopts IFRS
Following
SVS guidelines, SQM has migrated from Chilean GAAP and has adopted International
Financial Reporting Standards as the basis for its accounting principles. This
change is effective as of January 1, 2010, and as a result, 1Q10 is the first
quarter to be reported under IFRS. Also, 1Q09 figures have been prepared under
IFRS for comparative purposes.
Administrative
Expenses
Administrative
expenses totaled US$17.8 million (4.6% of revenues) for the first three months
of 2010, compared to the US$16.0 million (5.0% of revenues) recorded during the
same period of 2009. This increase is related to higher revenues recorded in the
first quarter of 2010.
Net
Financial Expenses
Net
financial expenses for the first three months of 2010 were US$5.5 million,
compared to the US$4.0 million recorded during the same period of
2009.
During
April 2010, the Company successfully placed US$250 million in the international
bond market. The bond will mature in 2020 and has a coupon rate of
5.5%.
Notes:
2) Gross
margin corresponds to consolidated revenues less total costs, including
depreciation and excluding sales and administration expenses.
A
significant portion of SQM’s costs of goods sold are costs related to common
productive processes (mining, crushing, leaching, etc.) which are distributed
among the different final products. To estimate gross margins by business lines
in both periods covered by this report, the Company employed similar criteria on
the allocation of common costs to the different business areas. This gross
margin distribution should be used only as a general and approximated reference
of the margins by business line.
3)
Potassium chloride and potassium sulfate will be reported together. This new
classification better reflects the fact that both products are derived from the
same natural resource, that they share a production process and that potassium
is the most relevant driver for costs and pricing. This new classification is
also consistent with market approach to reporting potassium products. SOP sales
include sales of third party products.
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 leader in costs, supported by a specialized international network
with sales in over 100 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 are:
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Low
production costs based on vast and high quality natural
resources.
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Know-how
and its own technological developments in its various production
processes.
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Logistics
infrastructure and high production levels that allow SQM to have low
distribution costs.
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High
market share in all its core
products
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International
sales network with offices in more than 20 countries and sales in over 100
countries.
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Synergies
from the production of multiple products that are obtained from the same
two natural resources.
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Continuous
new product development according to the specific needs of its different
customers.
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Conservative
and solid financial position
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For
further information, contact:
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Mary
Laverty, 56-2-4252074 /mary.laverty@sqm.com
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| |
Patricio
Vargas, 56-2-4252485 / patricio.vargas@sqm.com |
For media
inquiries, contact: Fernanda Guerra, 56-2-4252027 / fernanda.guerra@sqm.com
Statements
in this press release concerning the Company’s business outlook, future economic
performances, anticipated profitability, revenues, expenses, or other financial
items, anticipated cost synergies and product or service line growth, together
with other statements that are not historical facts, are “forward-looking
statements” as that term is defined under Federal Securities Laws.
Any
forward-looking statements are estimates, reflecting the best judgment of SQM
based on currently available information and involve a number of risks,
uncertainties and other factors that could cause actual results to differ
materially from those stated in such statements. Risks, uncertainties, and
factors that could affect the accuracy of such forward-looking statements, are
identified in the public filing made with the Securities and Exchange
Commission, and forward-looking statements should be considered in light of
those factors.
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Income
Statement
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(US$
Millions)
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For
the 1st Quarter
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2010
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2009
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Revenues
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388.5 |
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321.1 |
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Specialty
Plant Nutrition*
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128.2 |
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120.7 |
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Iodine
and Iodine Derivatives
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62.9 |
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43.1 |
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Lithium
and Lithium Derivatives
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33.9 |
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24.5 |
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Potassium
Chloride & Potassium Sulfate
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124.7 |
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95.7 |
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Industrial
Chemicals
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27.4 |
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22.4 |
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Other
Income
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11.4 |
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14.7 |
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Cost
of Goods Sold
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(257.0 |
) |
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(179.0 |
) |
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Gross
Margin
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131.5 |
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142.1 |
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Administrative
Expenses
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(17.8 |
) |
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(16.0 |
) |
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Financial
Expenses
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(7.8 |
) |
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(7.9 |
) |
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Financial
Income
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2.3 |
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3.9 |
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Exchange
Difference
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(3.1 |
) |
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(5.7 |
) |
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Other
|
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(7.5 |
) |
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(8.1 |
) |
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Income
Before Taxes
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97.6 |
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108.3 |
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Income
Tax
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(20.7 |
) |
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(20.8 |
) |
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Net
Income before minority interest
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76.9 |
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87.5 |
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|
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Minority
Interest
|
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(0.4 |
) |
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0.9 |
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Net
Income
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76.5 |
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88.4 |
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Net
Income per Share (US$)
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0.29 |
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0.34 |
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*Includes
other specialty fertilizers
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Balance
Sheet
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(US$
Millions)
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As
of March 31
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As
of Dec. 31
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2010
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2009
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Total
Current Assets
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1,568.2 |
|
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1,709.9 |
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Cash
and cash equivalents
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359.3 |
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530.4 |
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Accounts
receivable (1)
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399.7 |
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394.5 |
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Inventory
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633.5 |
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630.8 |
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Others
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175.7 |
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154.2 |
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Investments
in related companies
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58.8 |
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55.2 |
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|
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Property,
plant and equipment
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1,303.1 |
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1,300.5 |
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|
|
|
|
|
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Other
Non-current Assets
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87.0 |
|
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89.6 |
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Total
Assets
|
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3,017.1 |
|
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3,155.2 |
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Total
Current Liabilities
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364.1 |
|
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|
547.5 |
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Short-term
debt
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141.3 |
|
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271.4 |
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Others
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222.8 |
|
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276.1 |
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Total
Long-Term Liabilities
|
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|
1,104.1 |
|
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|
1,143.2 |
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Long-term
debt
|
|
|
990.6 |
|
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|
1,035.2 |
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Others
|
|
|
113.5 |
|
|
|
108.0 |
|
|
|
|
|
|
|
|
|
|
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Shareholders'
Equity before Minority Interest
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|
|
1,504.0 |
|
|
|
1,418.8 |
|
|
|
|
|
|
|
|
|
|
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|
Minority
Interest
|
|
|
44.9 |
|
|
|
45.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
|
1,548.9 |
|
|
|
1,464.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities & Shareholders' Equity
|
|
|
3,017.1 |
|
|
|
3,155.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
(2)
|
|
|
4.3 |
|
|
|
3.1 |
|
|
(1)
Accounts receivable + accounts receivable from related co.
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|
|
|
|
(2)
Current assets / current liabilities
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|
|
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|
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SOCIEDAD
QUIMICA Y MINERA DE CHILE S.A.
Conf:
/s/ Ricardo
Ramos
Ricardo
Ramos
Chief
Financial Officer & Business Development SVP
Date: May
25, 2010