SQM Inc., Santiago, reported a surge in income for the full-year and fourth-quarter ending Dec. 31, 2021. Full-year net income was $585.5 million ($2.05 per share) on revenues of $2.86 billion, up from 2020’s $164.5 million ($0.63 per share) and $1.82 billion, respectively. Gross profit was $1.1 billion, up from $482.9 million. Adjusted EBITDA was $1.18 billion, up from $579.8 million.
Fourth-quarter net income was $321.6 million ($1.13 per share) on revenues of $1.08 billion, up from the year-ago $67 million ($0.25 per share) and $513.8 million, respectively. Gross profit was up at $542.8 million from $132.5 million. Adjusted EBITDA was $559.5 million, up from $146.1 million.
“We are very proud that production goals set for 2021 were achieved, and in some cases even surpassed,” said CEO Ricardo Ramos. “As a result, we were able to supply stronger than expected demand growth in the lithium, iodine, potassium chloride and potassium nitrate markets and ultimately benefit from higher market prices. Consequently, our net income in 2021 was over three times higher than net income reported during 2020.”
“Given the existing shortage of potash and potassium-based fertilizers, we saw a significant increase in global potassium prices,” added Ramos. “During the fourth quarter 2021, prices increased significantly compared to third quarter of 2021 and the fourth quarter of last year, 56 percent and 153 percent, respectively, reaching almost $685/mt. This positive trend should continue in the short term and also have a positive impact on pricing environment in the SPN (Specialty Plant Nutrition) business line during the first half of 2022.”
Full-year Potassium Chloride and Potassium Sulfate (MOP/SOP) segment results included volumes of 893,200 mt, up 22.9 percent from 2020’s 726,700 mt. Revenues were up 99 percent, to $416.6 million from $209.3 million.
Fourth-quarter MOP/SOP volumes were up 25 percent to 304,600 mt from 244,600 mt, while revenues were up 214 percent to $208.6 million from $66.3 million.
SQM reiterated, however, that due to reduced water use and brine extraction in 2022 under its Sustainable Development Plant (GM Nov. 19, 2021) its MOP/SOP sales volume will be decreasing year-by-year, and it expects 2022 volumes of 750,000 mt, down from 2021’s 893,200 mt.
Full-year SPN volumes were up 11 percent, to 1.15 million mt from 2020’s 1.04 million mt. Potassium nitrate-based and specialty blends were both up 12 percent. The company believes demand growth in the agricultural potassium nitrate market increase 4 percent in 2021 and prices were up over 16 percent, surpassing $940/mt in the fourth quarter.
The company believes they were impacted by lower production by some competitors. SPN revenues were up 30 percent to $908.8 million from $701.7 million.
Fourth-quarter SPN volumes were up 8 percent to 285,200 mt from 265,200 mt, with potassium nitrate-based products up 16 percent and specialty blends off 20 percent. Revenues were up 50 percent, to $268.4 million from $179.1 million.
SQM believes lithium demand grew 55 percent during the year, mainly driven by electric vehicles. It believes total annual demand will reach 1 million mt sooner than anticipated. The company said market prices also grew as supply could not keep up with strong demand.
SQM said its lithium capacity expansion to 180,000 mt/y is expected to be achieved in coming months and it will boost the company’s market share. The Board of Directors has approved another capacity increase to 210,000 mt/y of lithium carbonate and 40,000 mt/y of lithium hydroxide, which is expected to be online in 2023.