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What guidance did Sociedad Quimica y Minera de Chile's management provide for the next earnings period?

Did Sociedad Quimica y Minera de Chile beat or miss consensus estimates last quarter?

- **Lithium Demand Surge**: 2025 at 1.5M tons (+25% YoY), 2026 forecast 1.7M tons, driven by EVs (China +30%) and BSS (40-50% YoY growth).
- **Production Records**: Chile lithium sales 230k tons, Australia spodumene 150-170k tons, and 23-24k LCE sales in 2025.
- **JV Milestone**: Codelco JV approved in China; dividend payments to begin Q4 2025 based on 33.5k tons/year.
- **Iodine Strength**: Prices near $73/kg with 80%+ pipeline completion and 1,500-ton capacity expansion.
- **Financial Resilience**: $2.7B 3-year CapEx plan with no capital raise needed; strong balance sheet and investment-grade focus.

**【CEO Summary Section】**
- **Lithium Market Outlook**: Q3 2025 saw higher realized prices amid volatility, with demand driven by EVs (30% YoY growth in China) and energy storage systems (20%+ of global demand). Q4 volumes expected to match Q3 levels.
- **Operational Highlights**: Record lithium sales volumes in Chile (230,000 metric tons, 180,000 processed domestically), spodumene sales up 150-170k tons in Australia, and first lithium hydroxide production in Kwinana.
- **Other Divisions**: Iodine prices averaged $73/kg, with 80%+ completion of seawater pipeline and 1,500-ton capacity expansion in Maria Elena. Fertilizer demand remained stable, with specialty products growing discretely.

**【CFO Financial Commentary】**
- **CapEx Update**: 3-year program ($2025-2027) reduced to $2.7B, focusing on lithium expansion (100k tons hydroxide in Chile), spodumene mining in Australia, and iodine capacity. No immediate capital raise needed due to strong balance sheet.
- **JV with Codelco**: JV approval secured in China; dividend payments to Codelco based on 33.5k tons/year starting Q4 2025, with terms detailed in public agreements.

**【Q&A Key Highlights】**
- **Demand Growth**: 2025 lithium demand at 1.5M tons (+25% YoY), 2026 forecast 1.7M tons, driven by BSS (40-50% YoY growth) and EVs. Global EV sales: China (60%), Europe (30% YoY), rest of world (40% YoY).
- **Production Targets**: Chile to produce 230k tons lithium (50k toll-processed in China), Australia to sell 23-24k LCE in 2025. Kwinana hydroxide ramp-up to nameplate capacity by end-2026.
- **Iodine Market**: 2025 demand tight, 2026 growth ~3% from new caliche ore supply. SQM targeting 1,500-ton expansion in Maria Elena to reinforce long-term supply.
- **Financial Health**: No capital raise needed; focus on maintaining investment-grade balance sheet through cost control and asset optimization.

Sociedad Química y Minera de Chile S.A. (SQM) Q3 2025 Earnings Call Transcript

- **Lithium Recovery Momentum**: Q3 sales +10% vs Q2, with China spot prices rebounding to RMB 20,000/mt LCE.
- **Kwinana Refinery Success**: First production achieved on schedule; full 50,000 mt LiOH capacity ramping up.
- **Chilean Lithium Growth**: 2025 sales target 10% YoY, driven by price/volume recovery.
- **Iron Segment Dominance**: 57% gross margin, leading SQM's diversified portfolio resilience.
- **Salar Futuro Ambitions**: $1B+ annual CapEx from 2030, pending regulatory approvals.

**【CEO Opening Remarks】**
- Q2 2025 lithium revenue declined 3% YoY due to lower prices, but recent weeks saw price recovery in China and Europe, driven by EV/BEV demand growth.
- Chilean lithium sales volumes expected to rise 10% YoY, despite Q2 flat volumes due to contract price floors.
- Australia's International Lithium Division updated sales guidance to 20,000 mt LCE for 2025, with Kwinana refinery (50,000 mt LiOH capacity) operational and on track for full ramp-up.
- Iron segment remains most profitable (57% gross margin), while fertilizers show stable demand with potassium price resilience.

**【Q&A Key Highlights】**
**Lithium Sales & Pricing**
- Q2 Chilean lithium sales: 51,700 mt (flat YoY). Q3 sales expected +10% vs Q2, with price recovery in China (RMB 20,000/mt LCE spot) boosting Q3 pricing.
- 2025 Chilean lithium sales target: +10% YoY, driven by improved pricing and volumes.
- Kwinana refinery first production achieved on spec, on budget, with ramp-up underway for 50,000 mt LiOH annual capacity (half SQM-owned).

**SPN Division Strategy**
- SPN (Specialty Plant Nutrition) focuses on NPK blends expansion, aiming for volume growth while maintaining price discipline.
- Mid-term goal: balance volume expansion with margin retention through service differentiation.

**Iodine Market Dynamics**
- 2025 iodine demand growth <1% due to supply constraints, but 2026+ growth expected with new capacity.
- X-ray contrast media demand driving long-term iodine fundamentals.
- SQM investing in new iodine capacity (1,500 mt/year) to meet demand, despite high prices.

**Salar Futuro Project Update**
- Environmental study submission to authorities expected Q2 2026, with potential approval by mid-2030.
- CapEx deployment: ~$1 billion annually from 2030-2033, contingent on regulatory approvals.
- Codelco partnership progressing; Chinese regulatory review nearing completion.

**Financial & Operational Updates**
- 2025 International Lithium Division sales guidance: 20,000 mt LCE (spodumene concentrate, ~50% Q3/Q4 split).
- Mt. Holland mine Opalar de AtacEx competitive with Sama, with long-term cost positioning near industry median.
- 2026+ CapEx: ~$1 billion/year (growth projects), with $250M/year maintenance spend.


Sociedad Química y Minera de Chile S.A. (SQM) Q2 2025 Earnings Call Transcript

- **Record Lithium Sales Growth**: Q1 2025 saw 20% YoY lithium sales, driven by EV adoption in China and Europe.
- **Price Volatility Management**: SQM maintains significant cost advantage, with lithium production far above breakeven even as Q2 prices decline.
- **Expansion Confidence**: Despite market noise, SQM proceeds with 240,000 mt lithium carbonate expansion, supported by 17% annual demand growth forecasts.
- **Iodine & SPN Strength**: Iodine prices hit records, while SPN volumes grow despite strategic potassium production cuts.
- **Mt. Holland Success**: Australian project on track to be cash-positive, with refinery commissioning nearing completion.

**【CEO Summary Section】**
- Q1 2025 marked SQM's highest first-quarter lithium sales volume, up 20% year-over-year, driven by EV demand in China and Europe, and energy storage systems globally.
- Lithium prices remained stable in Q1 but have declined in recent weeks, with Q2 average realized prices expected to be lower than Q1.
- Expansion projects include 240,000 metric tons of lithium carbonate and 100,000 metric tons of lithium hydroxide in Chile, and commissioning of the Kwinana refinery in Australia.
- Iodine business achieved record prices due to tight supply and demand, while Specialty Plant Nutrition (SPN) saw strong volume growth despite lower potassium production.

**【CFO Financial Commentary】**
- SQM maintains strong cash flow, with lithium production costs far below breakeven, even in the current price environment.
- The company has no immediate plans for interim dividends, adhering to a 30% net income payout policy, with final decisions on dividend cadence to be made later.
- Capital expenditures remain focused on lithium expansion, with no changes to previously disclosed plans.

**【Q&A Key Highlights】**
- **Lithium Pricing & Supply**: CEO Ricardo Ramos emphasized that current price levels are unsustainable and SQM is the lowest-cost producer. Despite short-term challenges, long-term demand growth (17% annually) justifies capacity expansion.
- **Mt. Holland Project**: The Australian spodumene concentrator is ramping up, with the refinery commissioning at 95% completion. The project is cash-positive even at current prices.
- **Codelco JV Debate**: CEO dismissed political noise around the Codelco JV, reaffirming the transaction's benefits and expected completion in H2 2025.
- **Customer Contracts**: CFO Gerardo Illanes noted that SQM's diverse customer base and confidential pricing mechanisms mitigate spot price volatility.
- **Market Oversupply**: SQM remains confident in its cost leadership and long-term demand outlook, despite near-term supply/demand imbalances.

Sociedad Química y Minera de Chile S.A. (SQM) Q1 2025 Earnings Call Transcript

- **Record Lithium Sales**: 2024 volumes hit 205,000 mt, with Q4 at 58,000 mt. 2025 demand growth (~17%) expected to stabilize prices amid slower supply growth.
- **Iodine Strength**: 2024 record volumes and price gains driven by medical demand. 2025 sales flat, with new capacity additions.
- **CapEx Focus**: $1.1B allocated to lithium (75%), Caliche (32%), and international projects. Strong balance sheet supports expansion without immediate funding risks.
- **EV Growth Driver**: Lithium demand up 25% in 2024, with EVs accounting for 70% of usage. 2025 demand forecast at 1.4M mt (~20% YoY).

**【CFO Financial Summary】**
- Full-year 2024 revenue exceeded $4.5 billion, with gross profit of $1.3 billion. Net income was impacted by a one-time $1.1 billion tax dispute charge.
- Lithium sales reached 205,000 metric tons (including 4,000 mt from Mt. Holland), with Q4 volumes surpassing 58,000 mt. Despite Q4 price declines, 2025 demand growth (~17%) is expected to stabilize prices.
- Iodine achieved record volumes and price growth, driven by X-ray contrast media demand. 2025 sales volumes expected to remain flat, with new capacity additions (María Elena site).
- 2025 CapEx allocated as: $750M for lithium expansion (Chile/Australia), $350M for Caliche (iron ore), and $200M for international lithium projects.

**【Lithium Market Outlook】**
- 2024 lithium demand grew 25% to 1.2M mt, driven by EVs (70%) and energy storage (15%). 2025 demand forecast at 1.4M mt (~20% YoY growth).
- Supply growth (~35% in 2024) is expected to slow to ~10% in 2025, with oversupply easing and potential 2026 price upside.
- SQM targeting 230,000 mt lithium production in 2025, with 100,000 mt lithium hydroxide capacity ramping up in Chile.

**【Capital Allocation & Risks】**
- Strong balance sheet supports $1.1B 2025 CapEx, with maintenance costs ~$250M/year. No immediate plans for equity raises, but monitoring funding needs.
- Potash production down 50% in 2024 due to lithium-focused brine extraction. Long-term potash outlook uncertain, with potential for net buying if lithium demand wanes.
- Codelco JV (Salar Futuro) expected to meet conditions in H2 2025, with $900M-$1B Caliche expansion for iron ore capacity.

**【Iodine & Fertilizers】**
- Iodine sales volumes to remain flat in 2025, with new capacity additions (Nueva Victoria, Pampa Blanca). Fertilizers market stabilized in 2024, with prices near 2H 2024 levels.

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