SQM Inc., Santiago, reported first-quarter net income of $796.1 million ($2.79 per share), up from the year-ago $68 million ($0.26 per share). Gross profit reached $1.16 billion, up from $136.6 million.
Adjusted EBITDA rose to $1.19 billion from $165.1 million, while revenues totaled $2.02 billion, up from $528.5 million.
“Our first-quarter results reflect several positive circumstances: first, the impact of higher prices in all our business lines, where significant increases in lithium prices stand out, and second, the successful long-term, operational, and commercial strategy,” said SQM CEO Ricardo Ramos.
SQM noted that its first-quarter results included Corfo and tax provisions of $800 million. Ramos said that some 60% of operating margin from lithium is dedicated to payments to Corfo and taxes, and said the company’s lithium business is a very good example of a successful public-private partnership.
“Today we can proudly report that we are a leader in the lithium industry,” said Ramos. “We have almost tripled our production levels in three years, while we have significantly decreased the extraction of brines.”
SQM saw a surge in first-quarter lithium results, with volumes up 59%, to 38,100 mt from the year-ago 23,900 mt, and revenues up 970%, to $1.45 billion from $135.2 million. The company said prices reached a record $38,000/mt, and the company had the highest sales volumes it has ever reported.
SQM believes the lithium market will grow at least 30% this year, with one important indicator being a 125% increase in electric vehicle sales in China during the first quarter. SQM said its plans to increase capacity remain on target. It believes its 2022 sales volumes will surpass 140,000 mt.
SQM said its Specialty Plant Nutrition (SPN) business remains an important segment within SQM’s diverse portfolio, with average prices 39% higher in first-quarter 2022 than fourth-quarter 2021. However, the company fears demand growth in the agricultural potassium nitrate market could be impacted by these higher prices and continuous supply restrictions, and ultimately SQM sales volumes in 2022 could be lower than reported in 2021.
First-quarter SPN volumes were off 25% from year-ago levels, to 210,400 mt from 280,500 mt. Potassium nitrate-based volumes were off 24%, to 124,300 mt from 163,100 mt, and specialty blends 25%, to 50,000 mt from 66,600 mt.
SPN revenues, however, were up 42%, to $275.3 million from $194.1 million.
SQM reported that sales prices in its Potassium Chloride and Potassium Sulfate (MOP/SOP) segment were up 170% during the quarter compared to the year-ago period. As a result, revenues were up 89.2%, to $114.1 million from $60.3 million. Volumes were off 29.9%, to 141,700 mt from 202,200 mt. Despite the lower first-quarter volumes, SQM believes that while there is still uncertainty surrounding this market, total volumes for potassium chloride will reach about 750,000 mt during 2022.