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Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) reported today earnings for the nine months ended September 30, 2020 of US$97.5 million ( US$0.37 per ADR), a decrease from US$211.2 million ( US$0.80 per ADR) for the nine months ended September 30, 2019 . The results were affected by a settlement fee of US$62.5 million related to a class action lawsuit against the Company in the United States .
Gross profit reached US$350.4 million (26.9% of revenues) for the nine months ended September 30, 2020 , lower than US$422.2 million (28.7% of revenues) recorded for the nine months ended September 30, 2019 . Revenues totaled US$1,303.4 million for the nine months ended September 30, 2020 , representing a decrease of 11.4% compared to US$1,471.4 million reported for the nine months ended September 30, 2019 .
The Company also announced earnings for the third quarter of 2020, reporting net income of US$1.7 million ( US$0.01 per ADR) compared to US$60.5 million ( US$0.23 per ADR) for the third quarter of 2019. The quarterly net income was impacted by a one-time, before-tax amount of US$62.5 million related to a settlement fee in a class action lawsuit against the Company in the United States . Gross profit for the third quarter of 2020 reached US$114.8 million , lower than the US$134.2 million recorded for the third quarter of 2019. Revenues totaled US$452.9 million , a decrease of approximately 4.3% compared to the third quarter of 2019, when revenues amounted to US$473.1 million .
SQM's Chief Executive Officer, Ricardo Ramos , stated: "Our gross profit was approximately US$115 million during the third quarter, similar to the gross profit reported during the first two quarters of this year. This quarter, we sold significantly higher sales volumes of lithium, over 40% more than the second quarter this year. However, iodine sales volumes were impacted by the Covid-19 pandemic, which has been impacting, among others, the X-ray contrast media market, and ultimately iodine demand. We are hopeful we could see demand recovery in 2021, returning to levels seen in 2019."
"I would be remiss if I didn't mention the Sustainable Development Plan that we announced last month. This plan is the culmination of several months or hard work and dedication to build a plan primarily based on the sustainable development goals of the United Nations and includes a series of company-wide initiatives focused on environmental protection, social responsibilities and sustainable operations. As part of this plan we have defined concrete goals to significantly reduce the use of continental water and brine extraction. In addition, we plan to become completely carbon neutral in all of our products by 2040. Because we have made process improvements that have enabled production efficiencies, we do not believe that the brine extraction reduction will have an impact on our near-or long-term lithium production or expansion plans. In fact, on top of the lithium carbonate and lithium hydroxide capacity expansions we are already working on in Chile , I'm happy to announce that today the Board approved expanding our lithium capacity even further in order to reach 180,000 and 30,000 metric tons of lithium carbonate and lithium hydroxide respectively by 2023, all of this, again, with lower brine extraction."
The CEO closed by saying, "In line with the lithium expansions we are working on, we are developing nitrates and iodine projects that will enable us to produce more to serve the future needs in these markets, all while reducing environmental impacts. We believe that the total capital expenditures required for growth and maintenance between 2021-2024 will be approximately US$1.3 billion . This proves that we will not be stagnant, we plan to grow or maintain our participation in the markets in which we currently partake."
SQM is a global company that is listed on the New York Stock Exchange and the Santiago Stock Exchange (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A). SQM 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:
- Ensuring access to the best assets related to our current business lines by expanding our global presence;
- Actively searching for attractive minerals allowing us diversification opportunities to replicate and expand our existing mining capacities;
- Strengthening our operational, logistical and commercial excellence process from beginning to end, while looking to be a cost leader; and
- Maintaining a conservative financial policy which allows us to successfully endure economic cycles that could impact the markets in which we sell.
We are a company built and managed by a culture based on excellence, safety, sustainability and integrity. We work every day to expand this culture through the attraction, retention and development of talent as well encouraging an inclusive and diverse work environment ensuring the unique knowledge and innovation needed to sustain our business. 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 position ourselves as leaders in sustainability and commit to a sustainable future where we constantly work to responsibly manage natural resources, protect human rights, care for the environment, form close and trusting relationships with our neighboring communities and create value. Within these communities, we support projects and activities with a focus on education, business development, and protection of the environment and historical heritage. We create value for our clients through established commercial models and the production and development of differentiated products that respond to their industry and market specific needs, constantly creating and providing a sustainable improvement in the quality of life. 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 Sustainable Development Plan, 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, including our ability to successfully implement the Sustainable Development Plan. 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 other 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, except as required by law.
SOURCE Sociedad Quimica y Minera de Chile , S.A. (SQM)