Group 1 - President Trump is initiating a Section 232 investigation to assess the effects of importing critical materials on domestic production as part of a broader national security strategy [1] - The executive order signed by President Trump aims to revitalize domestic manufacturing capabilities [1] Group 2 - Dilantha De Silva is a seasoned equity analyst with over 10 years of experience in the investment industry, focusing on small-cap stocks often overlooked by Wall Street [1] - Dilantha has contributed to various investment platforms and has been featured on major financial news outlets like CNBC and Bloomberg [1] - He is a CFA Level III candidate and an Associate Member of the Chartered Institute for Securities and Investment (CISI) [1]

Company Overview - SQM shares increased by 12.3% to close at $35.50, following a significant volume of trading, contrasting with a 26% loss over the previous four weeks [1] - The rally in SQM's stock is attributed to a rise in material stocks after President Trump announced a 90-day pause on reciprocal tariffs for most nations [1] Earnings Expectations - SQM is projected to report quarterly earnings of $0.65 per share, reflecting an 18.8% decrease year-over-year, with revenues expected to be $1.01 billion, down 7.1% from the same quarter last year [2] - The consensus EPS estimate for SQM has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] Industry Context - SQM is part of the Zacks Chemical - Specialty industry, which includes PPG Industries, whose stock also saw a 12.5% increase to $103.11, despite a -19.2% return over the past month [3] - PPG Industries has a consensus EPS estimate of $1.62, which is a 12.9% decline from the previous year, and it also holds a Zacks Rank of 3 (Hold) [4]

Core Insights - Sociedad Quimica y Minera de Chile S.A. (SQM) reported earnings of 42 cents per share in Q4 2024, a decline from 71 cents per share in the same quarter last year, and below the Zacks Consensus Estimate of 52 cents [1][5] - The company's total revenues for the quarter were $1,073.8 million, down approximately 18% year over year, but exceeded the Zacks Consensus Estimate of $1,010 million [2] Segment Highlights - Revenues from the Lithium and Derivatives segment decreased around 33% year over year to $532 million, despite a 13% increase in lithium sales volumes due to lower prices [3] - The Specialty Plant Nutrients (SPN) segment saw revenues of $224.6 million, up 0.4% year over year, driven by higher sales volumes but partially offset by lower prices [3] - The Iodine and Derivatives segment generated revenues of $225.6 million, up 3% from the previous year, benefiting from higher prices [4] - Revenues from the Potassium business increased approximately 30% year over year to $65.9 million, attributed to higher sales volumes [4] - The Industrial Chemicals unit recorded sales of $17.2 million, down roughly 9% year over year, due to significantly lower sales volumes despite higher prices [4] Full-Year Results - For the full year 2024, SQM reported a loss of $1.42 per share, compared to earnings of $7.05 in the previous year, with sales falling around 39% year over year to approximately $4,528.8 million [5] Financial Position - At the end of 2024, the company's cash and cash equivalents stood at $1,377.9 million, an increase of 32% year over year, while long-term debt rose to $3,600.6 million, up roughly 12% from the prior year [6] Outlook - SQM anticipates a 15% increase in sales volumes in the Lithium and Derivatives unit for 2025 compared to 2024, with projected sales of around 10,000 metric tons of LCE from the Mt. Holland operation, although average realized prices are expected to decline year over year [7] - For the SPN unit, the company expects sales volume growth in 2025, in line with or slightly above the anticipated market growth of 4-5% [7] - The Iodine and Derivatives segment is expected to see market demand stabilize with a growth forecast of around 2% in 2025, while potassium sales volumes are projected to decrease by about 50% due to lower production in the Salar de Atacama [8] - Capital expenditure for 2025 is expected to be approximately $1.1 billion [8] Stock Performance - SQM's shares have declined by 14.7% over the past year, compared to a 12.8% decline in the Zacks Fertilizers industry [10]

Financial Data and Key Metrics Changes - The company achieved revenues slightly exceeding $4.5 billion for the full year of 2024, with a gross profit of approximately $1.3 billion [9] - Net income for 2024 was impacted by a one-time charge of approximately $1.1 billion related to a tax dispute [9] Business Line Data and Key Metrics Changes - Lithium sales volumes reached nearly 205,000 metric tons in 2024, including almost 4,000 metric tons from Mt. Holland [10] - In Q4 2024, record sales volumes surpassed 58,000 metric tons of lithium carbonate equivalent [11] - Iodine achieved record volumes and strong price growth, particularly in X-ray contrast media applications [12] - Fertilizers market has stabilized, recovering from past challenges [13] Market Data and Key Metrics Changes - The lithium market grew around 25% in 2024, driven by electric vehicle demand, particularly in China [10] - Demand for lithium is expected to grow approximately 17% in 2025, with stable prices anticipated [11] - The iodine market is expected to see continued demand growth, albeit at a slower pace [12] Company Strategy and Development Direction - The company plans to invest over $1.6 billion in 2024, with approximately $750 million allocated for lithium capacity expansion in 2025 [14] - Investments will also include close to $350 million in caliche operations to increase production capacity [14] - The company remains committed to expanding its core business and leveraging its strong financial position for future opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the lithium market due to strong demand growth, despite price fluctuations [32][35] - The company is closely monitoring capital requirements and maintaining a strong balance sheet to support future investments [24] - Management noted that the iodine business is a key component of the portfolio, with plans for capacity expansion [28] Other Important Information - The company expects to produce 230,000 metric tons of lithium in 2025, with ongoing capacity expansion efforts [42] - Maintenance CapEx across all divisions is estimated to be around $250 million to $280 million per year [60] Q&A Session Summary Question: Potash production guidance and future plans - Management confirmed that potash production is down due to a focus on lithium production, with a possibility of being a net buyer in the future [18] Question: Capital requirements and raising capital - Management indicated that while there may be a gap in funding capital requirements, they are not planning to raise capital at this moment but are monitoring the situation [24] Question: Iodine business potential and spin-off possibilities - Management stated that the iodine business is significant and they are not planning to spin it off, focusing instead on expanding capacity [28] Question: Lithium market outlook and production capabilities - Management highlighted strong demand growth for lithium, with expectations to reach 230,000 metric tons in 2025 [42] Question: Codelco joint venture updates - Management reported no significant obstacles in meeting conditions for the joint venture with Codelco, expecting fulfillment in the second half of the year [47] Question: CapEx breakdown and maintenance CapEx - Management provided a breakdown of 2025 CapEx, estimating total CapEx between $3.1 billion to $3.8 billion over the next three years [51] Question: High costs in Q4 and future expectations - Management explained that higher costs in Q4 were due to one-time expenditures and that similar costs are expected for 2025 [91]

Core Viewpoint - Sociedad Química y Minera de Chile (NYSE: SQM) shares are trading near 5-year lows primarily due to declining revenue linked to the decreasing spot price of lithium, which constitutes a significant portion of their earnings [1] Company Summary - SQM is experiencing a decline in revenue, which is heavily influenced by the falling spot price of lithium [1] - The company holds a large market share in the lithium sector, which is critical to its earnings [1] Industry Context - The lithium market is currently facing downward pressure on prices, impacting companies like SQM that rely on lithium for a substantial part of their revenue [1]

Core Viewpoint - Sociedad Quimica y Minera de Chile S.A. (SQM) reported a significant decline in profits and revenues for the third quarter of 2024 compared to the previous year, primarily due to lower average sales prices despite volume growth in several segments [1][2]. Financial Performance - SQM's profit for Q3 2024 was $131.4 million, or 46 cents per share, down from $479.4 million, or $1.68 per share, in the same quarter last year [1]. - Revenues for the quarter totaled $1,076.9 million, a decrease of approximately 41% year over year, missing the Zacks Consensus Estimate of $1,090.2 million [2]. Segment Highlights - The Lithium and Derivatives segment saw revenues drop around 61% year over year to $497.2 million, despite an 18% increase in sales volumes, due to a 67% reduction in average sales prices [3]. - The Specialty Plant Nutrients (SPN) segment generated revenues of $249.1 million, up about 12% year over year, driven by higher sales volumes but tempered by lower average sales prices [3]. - The Iodine and Derivatives segment posted revenues of $233.5 million, up around 10% year over year, benefiting from increased sales volumes [4]. - Revenues from the Potassium business fell approximately 9% year over year to $68.2 million, as higher sales volumes were offset by lower average sales prices [4]. - The Industrial Chemicals unit recorded sales of $18.6 million, down roughly 57% year over year, due to significantly lower sales volumes despite higher average sales prices [4]. Financial Position - At the end of the quarter, SQM had cash and cash equivalents of $1,565.4 million, an increase of about 52% sequentially [5]. - Long-term debt rose to $3,784.4 million, up roughly 28% from the prior quarter [5]. Outlook - SQM reaffirmed its lithium volume guidance, expecting sales between 190,000-195,000 thousand metric tons for the year [6]. - For the SPN unit, the company anticipates sales volumes to exceed projected market growth of 17% for 2024, with an expected growth of around 20% year-over-year [6]. - The company expects higher average realized sales prices in the Iodine and Derivatives segment for Q4 2024, driven by strong demand growth, particularly in X-ray contrast media [7]. - SQM projects potassium sales volumes to reach 620,000 metric tons in 2024, considering delays in shipments rescheduled for 2025 [7]. Stock Performance - SQM's shares have declined by 23.6% over the past year, compared to a 13.1% decline in the Zacks Fertilizers industry [8].

Financial Data and Key Metrics Changes - The company reported positive volume growth in almost all business lines compared to the previous year, with Specialty Plant Nutrition volumes growing over 20% year-on-year and revenues increasing by more than 12% despite lower prices [8] - Lithium sales volumes reached over 51,000 metric tons, reflecting an 18% year-on-year growth, although average realized prices were 24% lower than the previous quarter [11][12] - The company expects to achieve sales volumes close to 195,000 tons for the year, maintaining its guidance despite pricing pressures [16] Business Line Data and Key Metrics Changes - Specialty Plant Nutrition showed solid dynamics with a market size recovery, contributing to revenue growth [8] - In Iodine, there has been a subtle but continued price increase since the beginning of the year, driven by strong demand and limited supply [9] - Lithium sales are under pressure from a temporary oversupply, but demand remains strong, particularly from the EV market [11][12] Market Data and Key Metrics Changes - The global lithium demand is expected to surpass 1.1 million tons this year, with a forecasted growth of 16% to 18% annually for the next five years [27] - The iodine market is estimated to be around 38,000 to 39,000 tons, with a projected growth of 7% this year, primarily driven by the contrast media industry [31] Company Strategy and Development Direction - The company is focused on increasing production efficiency and expanding capacity through projects like the seawater pipeline [9] - SQM is committed to developing its lithium projects in Chile and abroad, capitalizing on the clean energy transition [13] - The company plans to ramp up production at the Mt. Holland project, with expectations of producing between 110,000 to 130,000 tons of spodumene concentrate this year [18][46] Management's Comments on Operating Environment and Future Outlook - Management believes current lithium market prices are not at equilibrium, with demand continuing to grow while prices remain below incentive levels for new projects [12] - The company is optimistic about the specialty fertilizer market and expects stable price behavior in the midterm [8] - Management is confident in the long-term value of the Kwinana refinery and the overall lithium industry despite potential challenges during commissioning [24] Other Important Information - The company is currently under an SEC investigation related to compliance with anti-corruption laws, and is cooperating with the inquiry [39][40] - The agreement with Codelco is progressing as expected, with no specific issues reported in negotiations with local communities [36][37] Q&A Session Summary Question: Does SQM need to cut volume to help support the market? - The company plans to increase sales in line with production and does not anticipate any curtailments [16] Question: Update on Mt. Holland spodumene and conversion plant? - The concentrator is expected to produce 110,000 to 130,000 tons of spodumene concentrate this year, with the conversion plant 91% constructed and commissioning ongoing [18][20] Question: Outlook for lithium market in 2025? - Demand is expected to remain strong, with projections of 3 million tons by the end of the decade, driven primarily by the EV market [27][28] Question: Update on iodine market and new capacity? - The iodine market is expected to grow around 7% this year, with new supply anticipated in 2025 and 2026, but demand is expected to outpace supply [31][32] Question: Status of SEC investigation? - The company is cooperating with the SEC's inquiry and has initiated an internal review to address the request for information [39][40]

3Q2024 RESULTS PRESENTATION November 2024 Customary note regarding forward-looking statements This presentation release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "plan," "believe," "estimate," "expect," "strategy," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among ...

Core Viewpoint - SQM reported a significant decline in total revenues and a net loss for the nine months ended September 30, 2024, compared to the same period last year, indicating challenges in the market despite some positive volume growth in specific segments [1][5][6]. Financial Performance - Total revenues for the nine months ended September 30, 2024, were US$3,455.0 million, a decrease of 43.9% from US$6,155.9 million in the same period last year [1][6]. - The net loss for the nine months was US$524.5 million or US$1.84 per share, contrasting with a net income of US$1,809.5 million or US$6.33 per share for the same period last year [1][5]. - Gross profit for the nine months was US$1,033.3 million, representing 29.9% of revenues, down from US$2,674.3 million or 43.4% of revenues in the previous year [6]. Quarterly Results - For the third quarter of 2024, net income was US$131.4 million or US$0.46 per share, a decrease of 72.6% from US$479.4 million or US$1.68 per share in the third quarter of 2023 [7]. - Gross profit for the third quarter was US$280.8 million, down 62.7% from US$753.6 million in the same quarter last year [7]. - Revenues for the third quarter totaled US$1,076.9 million, a decrease of 41.5% compared to US$1,840.3 million in the third quarter of 2023 [7]. Business Segments - Solid sales volumes were reported in lithium, iodine, and fertilizer businesses, indicating a recovery in the market [2][3]. - Iodine prices saw a slight increase due to strong market demand and limited supply [4]. - Lithium sales volumes exceeded 51 thousand metric tons, reflecting an 18% year-on-year growth, although prices continued to decline, averaging 24% lower than the previous quarter [8]. Management Commentary - The CEO highlighted positive volume growth across nearly all business lines and noted a recovery in fertilizer markets, with Specialty Plant Nutrition volumes growing over 20% year-on-year [8]. - The CEO expressed confidence in the long-term fundamentals of the lithium market, emphasizing the company's competitive position and readiness to develop projects in response to the clean energy transition [9].

Financial Performance - SQM reported total revenues of US$3,455.0 million for the nine months ended September 30, 2024, a decrease of 43.9% compared to US$6,155.9 million for the same period last year[3]. - The company experienced a net loss of US$524.5 million or US$1.84 per share for the nine months ended September 30, 2024, compared to a net income of US$1,809.5 million or US$6.33 per share for the same period last year[3]. - Gross profit for the nine months ended September 30, 2024, was US$1,033.3 million, representing 29.9% of revenues, down from US$2,674.3 million or 43.4% of revenues for the same period in 2023[3]. - Total revenues for Q3 2024 were $1,076.9 million, a decrease of 41.5% compared to $1,840.3 million in Q3 2023[50]. - Gross profit for Q3 2024 was $280.8 million, down 62.8% from $753.6 million in Q3 2023[50]. - Net income for Q3 2024 was $131.4 million, compared to $479.4 million in Q3 2023, representing a decrease of 72.6%[50]. Revenue Breakdown - Lithium and derivatives revenues totaled US$1,709.3 million for the nine months ended September 30, 2024, a decrease of 61.1% compared to US$4,388.7 million for the same period in 2023[7]. - Specialty Plant Nutrition revenues increased to US$717.3 million for the nine months ended September 30, 2024, a slight increase from US$690.2 million reported for the same period in 2023[10]. - Iodine and derivatives revenues totaled US$742.8 million for the nine months ended September 30, 2024, an increase of 10.2% compared to US$674.0 million for the same period in 2023[16]. - Potassium revenues for the nine months ended September 30, 2024, totaled US$204.9 million, representing a 10.2% decrease from US$228.2 million in the same period of 2023[23]. - Industrial chemicals revenues for the nine months ended September 30, 2024, reached US$61.0 million, a 61.0% decrease from US$156.4 million in the same period of 2023[25]. - Lithium and derivatives revenue dropped to $497.2 million from $1,277.9 million year-over-year, reflecting a decline of 61.1%[50]. Sales Volumes - Lithium sales volumes reached over 51,200 metric tons for the third quarter of 2024, an 18% increase year-on-year[8]. - Specialty Plant Nutrition sales volumes increased by 21% year-on-year for the nine months ended September 30, 2024, totaling 745.3 thousand metric tons[13]. - Potassium sales volumes for the nine months ended September 30, 2024, were 528.6 thousand metric tons, a 23% increase from 430.5 thousand metric tons in the same period of 2023[23]. - Industrial nitrates sales volumes for the nine months ended September 30, 2024, were 41.1 thousand metric tons, a 76% decrease from 168.1 thousand metric tons in the same period of 2023[29]. Profitability and Expenses - Adjusted EBITDA for the nine months ended September 30, 2024, was US$1,155.4 million, with an adjusted EBITDA margin of 33.4%, compared to US$2,752.5 million and a margin of 44.7% for the same period in 2023[37]. - Net financial expenses for the nine months ended September 30, 2024, totaled US$82.8 million, compared to US$3.9 million for the same period in 2023[33]. - Income tax expense for the nine months ended September 30, 2024, reached US$1,301.1 million, compared to US$719.3 million during the same period in 2023[34]. - Administrative expenses totaled US$132.2 million (3.8% of revenues) for the nine months ended September 30, 2024, compared to US$126.8 million (2.1% of revenues) for the same period in 2023[32]. - Cost of sales amounted to US$2,421.7 million for the nine months ended September 30, 2024, a decrease of 30.4% compared to US$3,481.5 million for the same period in 2023[31]. Financial Position - The company reported a liquidity ratio of 2.9, indicating strong short-term financial health[48]. - Total current assets remained stable at $5,608.1 million as of September 30, 2024[48]. - Total assets were reported at $11,290.5 million, unchanged from the previous quarter[48]. - Shareholders' equity stood at $5,123.0 million, consistent with the previous reporting period[48]. Future Outlook - The company anticipates future growth driven by the development of the Salar Futuro Project and partnerships, including with Codelco[52]. - SQM aims to maintain its leading position in the lithium, potassium nitrate, iodine, and thermo-solar salts markets through innovation and technological development[51].