Sociedad Química y Minera de Chile SA (SQM) reported a second-quarter net income of $83.1 million ($0.32 per share), in line with the year-ago $83.2 million ($0.32 per share). Revenues rose 1.1 percent, to $489.6 million from the year-ago $484.3 million, as a doubling in lithium sales helped offset a 27 percent drop in potassium chloride and potassium sulfate revenues amid weaker prices.
Potassium Chloride and Potassium Sulfate revenues were down to $97.3 million from the year-ago $132.5 million, with volumes up 3 percent to 375,100 mt from 362,900 mt. However, SQM said average prices for the business line fell 29 percent when compared with the second quarter of 2015.
Second-quarter Specialty Plant Nutrition (SPN) revenues were down slightly, to $191.1 million from the year-ago $192.2 million. Volumes were up at 254,000 mt from 244,500 mt.
“Pricing in the SPN business line has been more stable than in the potassium chloride and potassium sulfate business segment, but we did see a slight decrease of almost 4 percent during the first half of the year, mainly as a result of lower potassium chloride prices,” said Patricio de Solminihac, SQM CEO. “These lower prices were mostly offset by higher sales volumes, specifically related to our water soluble products, a market where we still expect to see market growth during 2016.”
SQM reported six-month net income of $141.6 million ($0.54 per share) on revenues of $881.5 million, down from the year-ago $154.9 million ($0.59 per share) and $871.8 million, respectively.
First-half potassium chloride/SOP sales volumes were up over 14 percent year-on-year, and SQM expects sales volumes for the full-year to be at least 20 percent stronger than last year’s sales. De Solminihac noted some slight recovery recently in potash prices following the settlement on major contracts with China. “We expect an increase in average prices of potassium chloride during the second half of the year,” he said. Sales volumes were 660,300 mt, up from 577,800 mt, while revenues were off 18 percent to $181.6 million from $220.4 million.
Six-month SPN revenues were marginally off, at $332.2 million from the year-ago $335.3 million. SQM said SPN sales prices decreased as a result of pressure related to lower prices in the potash market, and noted prices in the SPN business line dropped almost 7 percent compared to the first quarter of the year. It said six-month SPN sales volumes increased 3 percent, to 428,100 mt from 415,500 mt, with sales volumes of water soluble products outweighing those of field fertilizers. The company said it expects to see continued growth in the water soluble market. Within the SPN segment, potassium nitrate and sodium potassium nitrate volumes were marginally off, at 263,300 mt from the year-ago 266,500 mt.