SQM Inc. reported full-year net income of $3.91 billion on revenues of $10.71 billion, up from 2021’s $585.5 million and $2.86 billion, respectively. Gross profit was $5.74 billion, up from $1.09 billion.
“We are well pleased with the extraordinary results that the company delivered in 2022,” said SQM CEO Ricardo Ramos. “While the positive price environment during the year contributed to the record earnings that we published today, our long-term view of the lithium market, the investments we made in new capacity, the risk we took, and the operational success, all of that well positioned us to benefit from the market conditions seen last year.
“The successful public-private alliance we have with CORFO is also yielding great results, allowing us to contribute more than US$5 billion to the Chilean treasury, along with important contributions to local governments and neighboring communities,” he added.
“As electric vehicle sales continue to grow, we now expect the lithium demand to reach almost 1.5 million mt by 2025. This strong demand growth expectations give us confidence as we remain focused on expanding our lithium production capacity. In Chile, we have reached a run-rate of 180,000 mt of high-quality lithium products while working to further expand our lithium carbonate and lithium hydroxide capacity.”
In 2023-2025, the company is investing $1.4 billion to increase its lithium capacity in Chile to 210,000 mt, including 100,000 mt of lithium hydroxide capacity.
In addition, the Mt. Holland lithium project in Australia is in construction, and SQM expects it to be producing spodumene by the end of the year and lithium hydroxide during first-half 2025. The new Sichuan lithium refinery in China is expected to be completed in second-quarter 2023, while the company continues to invest in lithium exploration.
SQM’s full-year Lithium segment volumes were up 55% for the year, to 156,800 mt with an average sales price of $52,000/mt, compared to 2021’s 101,100 mt. Revenues were up 771%, to $8.15 billion from 2021’s $936.1 million. Lithium accounted for 79% of SQM’s consolidated gross profit.
Company-wide, fourth-quarter net income was $1.15 billion on revenues of $3.13 billion, up from the year-ago $321.6 million and $1.08 billion, respectively. Gross profit was $1.64 billion, up from $542.8 million.
While lithium sales volumes continue to grow for the company, those in the Specialty Nutrition (SPN) and Potassium Chloride & Potassium Sulfate (MOP/SOP) segments have declined.
Full-year SPN volumes were down 27% to 847,800 mt, down from 2021’s 1.15 million mt, with volumes off for all major categories in the group, including the largest – potassium nitrate-based products, which declined 26% to 477,400 mt from 643,600 mt. Citing higher prices, SQM believes global potassium nitrate demand decreased almost 15%. While the company expects some demand recovery in 2023, it currently does not expect it to fully recover to 2021 levels.
Full-year SPN revenues, however, were up 29% on the higher prices, to $1.17 billion from $908.8 million. SPN gross profit accounted for 8% of SQM’s gross profit for the year.
Fourth-quarter SPN revenues were up 2%, to $274.2 million from $268.4 million, with volumes off 30% to 199,200 mt from 285,200 mt.
Full-year MOP/SOP sales volumes were down 46% on higher prices, to 480,500 mt from 2021’s 893,200 mt. However, revenues were up 5%, to $437.2 million from $416.6 million. MOP/SOP represented 4% of SQM’s total 2022 gross profit.
SQM believes the potassium market demand may have reached 60 million mt in 2022, a decrease from 2021’s 71 million mt, as a result of higher market prices. It noted that prices came down in recent months, and its fourth-quarter prices were about 15% lower than the year-ago average for the quarter. The company said the price decrease should have a positive impact on demand, and it expects to see a recovery during the year. It said 2023 sales volumes could surpass 500,000 mt.
Fourth-quarter MOP/SOP volumes were down 68%, to 98,600 mt from 304,600 mt, while revenues dropped 61% to $80.5 million from $208.6 million.