Sociedad Quimica y Minera de Chile SA said May 23 that it booked a 10.3% increase in its first-quarter net profit to US$113.8 million, or 43 cents per American depositary receipt.
Revenues in the three months ended March 31 increased to US$518.7 million from US$518.6 million, and gross profit reached US$192.7 million. SQM's board approved an interim dividend of 43.247 cents per share.
A year ago, the lithium miner recorded a net profit of US$103.2 million, or 39 cents per ADR, while gross profit stood at US$177.9 million.
Increased lithium prices, offset by lower sales volumes for its potassium chloride and potassium sulfate business lines, boosted the company's results in the quarter.
Revenues from sales for its lithium business increased 12.1% yearly to US$164.2 million, with gross profit from the segment representing 61% of SQM's consolidated gross profit. Sales revenues for its potassium chloride and potassium sulfate business lines, on the other hand, tanked 51.6% to US$52.2 million.
SQM's industrial chemicals division raked in US$29.5 million, reflecting a 43.1% yearly decrease.
The company plans to increase the capacity for its lithium operations in Chile to 70,000 tonnes from 48,000 tonnes, which is expected to be completed by the end of the year. CapEx for the expansion is pegged at US$75 million.
The Salar de Atacama second-stage expansion, which will increase production to 120,000 tonnes from 70,000 tonnes, will be completed over the next 18 months at a projected CapEx of US$200 million. The company will then invest another US$250 million to add 60,000 tonnes, to reach the target lithium production of 180,000 tonnes per year by 2021 with a total investment of US$525 million.
Meanwhile, the miner expects lower potassium chloride output from Salar de Atacama due a reduction in extraction volume to 1,250 liters per second per year, from 1,500 liters per second per year, for a period of six months. The reduction in brine extraction may result in loss in production and sales volumes of approximately 170,000 tonnes on an annual basis.
