Sociedad Quimica y Minera de Chile S.A. (SQM), in light of the high volatility experienced by world stock markets and in SQM share price, reiterated its statements from its second quarter 2008 earnings release regarding its expectations that results for the second half of this year will be significantly higher than both the results for the first half of this year and the results for the second half of 2007.
Patricio Contesse, Chief Executive Officer of SQM, stated, "Based on the sales we have accomplished so far, our current projections indicate that we will achieve record results in the third quarter. Furthermore, we believe this trend will continue into the fourth quarter and next year, considering that market fundamentals are expected to be strong in the medium and long terms." Mr. Contesse went on to say, "Our expectations for the specialty plant nutrition, iodine and lithium markets have improved in the past 30 days, and in particular, sales volumes of iodine and lithium have exceeded our initial projections."
In July of 2008, SQM reported the details of its capital expenditure plan, which includes approximately US $ 1 billion for the 2008-2010 period. The primary objectives of the plan are:
-- Increase production capacity of potassium-based products in the Salar de Atacama by approximately 250,000 tons per year; -- Increase production capacity of lithium carbonate to 40,000tons per year, already accomplished in this third quarter; -- Increase production capacity of nitrates by approximately 25%, by building a new potassium nitrate facility with a capacity of 300,000 tons per year by the second half of 2010; -- Increase production capacity of iodine by approximately 25% by 2012; -- Explore mining properties in order to search for potential metallic mineral resources, and -- Undertake a number of other investments aimed at improving productivity and infrastructure.
With respect to the capex plan, Mr. Contesse remarked, "SQM is in a unique position today, with excellent growth prospects observed across all of its main markets. SQM's solid financial position will enable the Company to face the growth it expects to see during the coming years."
The Company is expecting a year-end 2008 ratio of net financial debt to EBITDA less than 0.5 times, and given the strong projected cash flows, SQM should maintain solid financial indicators in the coming years.