Chile SQM Q2 income down 44.1% on lower revenues

28 August 2013 17:26  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Sociedad Quimica y Minera de Chile (SQM) posted a Q2 net income of $107.4m (€80.6), down by 44.1% from $192.2m in the prior-year quarter, the chemical and fertilizer producer said late on Tuesday.

The company attributed the drop in income to weaker revenues in its speciality plant nutrition (SPN), iodine, lithium, potassium and industrial chemicals business lines.

Total revenues in the April-June period were $566.5m, down by 17.1% from $683.3m in the prior-year quarter, while gross profit fell 36.5% to $187.8m from $295.7m.

For the first six months of 2013, income fell to $259.2m from $342.2m in the same period last year, while revenues were down to $1.19bn from $1.21bn.

Profits in the January-June period were impacted by lower prices in the potassium market, which affected the company’s SPN and potassium lines, SQM said.

The company said it would “remain vigilant” following Russian potash producer Uralkali’s decision in July to withdraw from the Belarusian Potash export cartel.

The move – and Uralkali’s subsequent announcement that it would increase production and sales volumes of potassium-based fertilizers – could have a negative impact on prices, the company said.

SQM said capital expenditures for the year would reach $400m – lower than the previously estimated $500m – while spending in 2014 would be “significantly lower” than this year’s level.

However, the company said it would press ahead with plans to boost potassium chloride production capacity over the next 18 months to about 2.3m tonnes.

($1 = €0.75)

By: Simon West

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