While Sociedad Quimica y Minera de Chile SA (SQM) saw a record year for revenues and net income in 2011, potash related sales during the fourth quarter saw the same kind of lull experienced by other potash producers.
For the year, SQM net income was up 43 percent to $545.8 million ($2.07 per share) on sales of $2.14 billion, up from 2010’s $382.1 million ($1.45 per share) on sales of $1.83 billion. Despite the drop in some potash-related volumes, overall SQM fourth-quarter net income was up 50 percent, to $158.9 million ($.60 per share) on sales of $538.9 million from the year-ago $105.8 million ($.40 per share) on sales of $505.7 million. The income uptick was attributed to higher prices.
“We are pleased with our performance throughout 2011,” said SQM CEO Patricio Contesse. “It proved to be a record year for revenues and net income, significantly surpassing 2010. We posted high volumes in our specialty plant nutrition, and record volumes in our lithium and iodine business lines. We also finalized some major capital investments, including our new potassium nitrate plant at Coya Sur and our new granulated MOP facility in Salar de Atacama, which will grant us increased flexibility with potassium products in the future.
“In addition to our traditional sales revenues where we showed strong results, we sold a portion of our mining rights to Sierra Gorda SCM during the fourth quarter, which also contributed to 2011 earnings. This type of transaction has been done in the past, and we will not overlook similar opportunities that may be presented to us in the future. SQM remains confident about the future of its business, and will maintain efforts to assure that future world needs are met in all of its major business lines. In short, SQM will ensure that shareholder value is maximized.”
For the year, Specialty Plant Nutrition (SPN) revenues were up 19.5 percent, to $721.7 million from 2010’s $603.7 million. Fourth-quarter revenues were $174.6 million, up
15.5 percent from the year-ago $151.2 million.
SQM said world demand for SPN products remained strong throughout 2011. Demand drivers included North American and European markets, led mostly by uses in tomato crops and other vegetables. The market saw limited supply in 2011, which, coupled with strong growth in demand, led to an increase in prices across all main markets. One potassium nitrate supplier, Haifa Chemicals in Israel, had a plant offline for part of the year due to a strike.
Average prices for SPN products increased over 14 percent from 2010. SQM said further margin improvements will depend mainly on the behavior of potassium-based fertilizers, especially potash. SQM believes its share of the potassium nitrate world market in 2011 was 49 percent.
SQM SPN volumes in 2011 were up 4 percent, to 849,300 mt from 2010’s 815,400 mt. Within the segment, potassium nitrate/sodium potassium nitrate volumes were up 3 percent, to 551,100 mt from 534,700 mt; specialty blends were up 7 percent, to 189,300 mt from 176,300 mt; sodium nitrate was up 32 percent, to 22,200 mt from 16,800 mt; and Other SPN products were off 1 percent, to 86,700 mt from 87,600 mt.
Potassium chloride/potassium sulfate sales for the year were $555.7 million, up from 2010’s $528.2 million, with volumes off 13 percent to 1.1 million mt from 2010’s 1.27 million mt. However, the company said for the year that MOP volumes grew about 7 percent over 2010, with the Brazilian market growing over 25 percent. Prices increased more than 20 percent overall in 2011, with price stabilization during the fourth quarter.
Fourth-quarter sales were off 24 percent, to $129.8 million from the year-ago $171.4 million. SQM said they were lower than expected due mainly to construction delays with the new MOP and granular MOP facilities in Salar de Atacama. The company said the