UNITED
STATES OF AMERICA
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT OF
FOREIGN ISSUER
PURSUANT
TO RULE 13A-16 OR 15D-16
OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Includes
earnings release for the first quarter of 2009
SOCIEDAD QUIMICA Y MINERA DE
CHILE S.A.
(Exact
name of registrant as specified in its charter)
CHEMICAL AND MINING COMPANY
OF CHILE INC.
(Translation
of registrant's name into English)
El Trovador 4285, Santiago,
Chile (562) 425-2000
(Address
and phone number of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
|
Form
20-F x
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Form
40-F ¨
|
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
|
Yes
¨
|
No
x
|
If
"Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82________
 |
For
Immediate Release
SQM
REPORTS EARNINGS FOR THE FIRST QUARTER OF
2009
|
Highlights
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·
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SQM
reported net income for the first quarter of 2009 of US$86.3 million, an
increase of 33% over the first quarter of
2008.
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·
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Earnings
per ADR totaled US$0.33 for the quarter, compared to US$0.25 for the same
period of 2008.
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·
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Operating
income for first quarter 2009 was 39% higher than that of first quarter
2008.
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Santiago, Chile, April 28, 2009.-
Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock
Exchange: SQM-B, SQM-A) reported today earnings for the first quarter of
2009 of US$86.3 million (US$0.33 per ADR), an increase of 33% with
respect to the same period of 2008, when earnings totaled US$64.8 million
(US$0.25 per ADR). Operating income reached
US$119.5 million (37% of revenues), 39% higher than the US$86.2 million (26% of
revenues) recorded during the first quarter of 2008. Revenues totaled US$320.9
million for the first quarter, representing a decrease of 2% over the US$326.3
million reported in the same period of 2008.
SQM’s
Chief Executive Officer, Patricio Contesse, stated, “Considering the current
global economy and the difficult circumstances of world markets in general, the
increase in our quarterly operating income and net income is very good news. The
Company’s different business lines prevent us from depending on a single product
or market and provide us with diversified sources of revenue that allow us to
deliver higher operating margins”. He continued, “Higher sales prices during the
first quarter of the year compared to the same period of the previous year
combined with lower operating costs have allowed us to offset the lower sales
volumes in our SPN, iodine and lithium businesses, which have in general
followed the downward trend observed in different sectors of the economy during
recent times. As anticipated, higher production levels of potassium
chloride have translated into significantly higher sales volumes and have
positively impacted our margins.”
Mr.
Contesse concluded, “We remain confident that the fertilizer and industrial
markets that use our products should recover by the second semester, increasing
results in the second half of the year compared to the first half of this
year.”
|
Segment
Analysis
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|
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SQM
Los
Militares 4290 Piso 6,
Las
Condes, Santiago, Chile
Tel:
(56 2) 425 2485
Fax:
(56 2) 425 2493
www.sqm.com
|
 |
Specialty Plant
Nutrition
Revenues
from our Specialty Plant Nutrition business line for the first three months of
2009 totaled US$145.7 million, 15% lower than the US$170.5 million recorded for
the same period in 2008.
Operating
margins were higher than those of the same period of the previous year due to
the higher average prices and lower costs, which more than compensated for the
significant decrease in sales volumes. Lower demand seen in the past few months
was mainly driven by the global economic downturn affecting our sales volumes
and negatively impacting revenues in this business line.
The
current financial crisis has translated into restricted access to credit for
farmers and distributors around the world which has impacted fertilizer demand
in most markets. This effect, combined with the uncertainty regarding
the evolution of fertilizer prices, has meant that distributors have sold
existing inventories rather than purchase new stock, and customers have delayed
fertilizer application, both negatively impacting worldwide demand.
These
circumstances are not sustainable in the long term given that producers of high
value crops must use specialty fertilizers to reach optimum production levels to
ensure the growth and quality of premium crops. The fundamental
drivers that have explained the growth of specialty fertilizers in the past
–scarcity of water, high cost of land and the need for better quality crops–
remain the same and should become more important in the medium- to long-term and
should positively impact demand.
Sales
prices during the first quarter remained at similar levels to those observed in
the fourth quarter of last year, and we believe they should remain relatively
stable in the following quarters.
Specialty
Plant Nutrition gross
margin (1) for
the first three months of 2009 accounted for approximately 40% of SQM’s
consolidated gross margin.
Iodine and
Derivatives
Revenues
from sales of iodine and derivatives during the first three months of 2009
totaled US$43.1 million, a decrease of 28% with respect to the US$60.1 million
reported for the first three months of 2008.
The
decrease in revenues was mainly the result of lower sales volumes in those
applications that have been most affected by the current global economic
downturn, such as nylon, biocides and polarizing films for LCD’s. In general, we
have seen a decline in demand for applications related with the automotive
industry, construction sector and consumer electronics. However, uses related to
health and human nutrition have remained stable during the period, and in
addition, new applications in agrochemicals continued to show promising
growth.
During
the first quarter, we have already seen the effects of the announced price
increase in this business line. In addition, lower energy costs resulted in
higher margins during the first three months compared to the same period in
2008, which helped compensate for lower sales volumes during the first quarter.
We expect that sales volumes should return to normal levels in the second half
of this year.
Gross margin for the Iodine
and Derivatives segment accounted for approximately 14% of SQM’s consolidated
gross margin in the first three months of 2009.
Lithium and
Derivatives
Revenues
for Lithium and Derivatives totaled US$24.5 million during the first three
months of 2009, a decrease of 42% with respect to the US$42.1 million reported
for the first three months of 2008.
Sales
prices in the first quarter remained at similar levels to those observed in the
same quarter of the previous year. The lower revenues are therefore
the result of a substantial decline in sales volumes. Because end uses in this
sector are sensitive to economic cycles, decreased demand was seen across most
of the applications in this segment.
Lower
demand seen during recent months can be explained by both reduced consumption in
end uses as well as inventory optimization of lithium customers. Given the
economic circumstances, lithium customers are no longer maintaining the high
inventory levels that were seen prior to the downturn. This inventory
optimization has resulted in delayed purchases further compounding the effects
of lower demand for end uses. We expect, however, that volumes in the
second half should be higher than in the first half of this year.
Gross margin for the Lithium
and Derivatives segment accounted for approximately 9% of SQM’s consolidated
gross margin in the first three months of 2009.
Potassium
Chloride
Potassium
chloride revenues for the first three months of 2009 totaled US$72.1 million, a
366% increase with respect to the first three months of 2008, when revenues
amounted to US$15.5 million.
During
the first quarter, SQM was able to expand its potassium chloride business line.
Our sales last year were concentrated mostly in Chile, and given our capacity
increase we have started to focus on foreign markets. Our global presence and
our relatively small size in potash give us more flexibility to sell the
additional volume.
As
anticipated potassium chloride revenues have grown considerably due to a
significant increase in sales volumes during the first quarter of the year. We
expect sales volumes to continue to grow in the following quarters.
Gross margin for potassium
chloride accounted for approximately 30% of SQM’s consolidated gross margin in
the first three months of 2009.
Industrial
Chemicals
Industrial
Chemicals revenues for the first three months of 2009 reached US$22.4 million,
7% lower than the US$24.0 million recorded for the same period of the previous
year.
During
the first quarter of 2009, volumes were lower than in the same period of the
previous year, whereas prices increased following the price trend seen for
nitrate fertilizers. As a result, revenues fell slightly during the period.
Applications for industrial chemicals related to construction uses, such as
glass and frits, were negatively impacted due to the economic
downturn.
On a
positive note, other applications such as explosives and charcoal briquettes
remained stable during the period. In addition, we continue to see growing
demand for industrial-grade sodium nitrate to be used in solar energy plants. We
expect this trend to continue in the future since we have already settled a
number of contracts for 2009, and new projects are currently being
developed.
Gross margin for the
Industrial Chemicals segment accounted for approximately 7% of SQM’s
consolidated gross margin in the first three months of 2009.
Other Commodity
Fertilizers
Revenues
from sales of other commodity fertilizers and other income reached
US$13.1million in the first three months of the year, down from US$14.1 million
for the same period of the previous year. Global consumption for commodity
fertilizers decreased in response to the negative world economic scenario and
general lack of credit for farmers.
Selling
and Administrative Expenses
Selling
and administrative expenses totaled US$21.0 million (6.5% of revenues) for the
first three months of 2009, compared to the US$18.0 million (5.5% of revenues)
recorded during the same period of 2008.
Operating
Costs
Operating
costs for the first three months of 2009 totaled US$180.4 million, compared to
the US$222.1 million of the same period of the previous
year. Production costs have continued to decline during the last 6
months, following the trend of lower energy and raw material costs, the
appreciation of the U.S. dollar and the positive effects of initiatives to
reduce costs and increase productivity.
Non-operating
Income
The
Company recorded a non-operating loss of US$13.2 million for the first three
months of 2009, which is higher than the US$3.6 million loss recorded for the
same period of 2008. This increase can be explained by: losses
related to foreign currency translation, lower results from investment in
related companies and higher financial expenses.
Notes:
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(1)
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Gross
margin corresponds to consolidated revenues less total costs, including
depreciation and excluding sales and administration
expenses.
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A
significant portion of SQM’s costs of goods sold are costs related to common
productive processes (mining, crushing, leaching, etc.) which are distributed
among the different final products. To estimate gross margins by business lines
in both periods covered by this report, the Company employed similar criteria on
the allocation of common costs to the different business areas. This gross
margin distribution should be used only as a general and approximated reference
of the margins by business line.
SQM is an
integrated producer and distributor of specialty plant nutrients, iodine and
lithium. Its products are based on the development of high quality natural
resources that allow the Company to be leader in costs, supported by a
specialized international network with sales in over 100 countries. SQM’s
development strategy aims to maintain and strengthen the Company’s world
leadership in its three core businesses: Specialty Plant Nutrition, Iodine and
Lithium.
The
leadership strategy is based on the Company’s competitive advantages and on the
sustainable growth of the different markets in which it participates. SQM’s main
competitive advantages in its different businesses are:
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·
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Low
production costs based on vast and high quality natural
resources.
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Know-how
and its own technological developments in its various production
processes.
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Logistics
infrastructure and high production levels that allow SQM to have low
distribution costs.
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High
market share in all its core
products
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International
sales network with offices in more than 20 countries and sales in over 100
countries.
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Synergies
from the production of multiple products that are obtained from the same
two natural resources.
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Continuous
new product development according to the specific needs of its different
customers.
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Conservative
and solid financial position
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For
further information, contact:
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Patricio
Vargas, 56-2-4252274 / patricio.vargas@sqm.com
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Mary
Laverty, 56-2-4252074 / mary.laverty@sqm.com
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Carolina
Rojas, 56-2-4252250 / carolina.rojas@sqm.com
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For media
inquiries, contact: Fernanda Guerra, 56-2-4252027 / fernanda.guerra@sqm.com
Statements
in this press release concerning the Company’s business outlook, future economic
performances, anticipated profitability, revenues, expenses, or other financial
items, anticipated cost synergies and product or service line growth, together
with other statements that are not historical facts, are “forward-looking
statements” as that term is defined under Federal Securities Laws.
Any
forward-looking statements are estimates, reflecting the best judgment of SQM
based on currently available information and involve a number of risks,
uncertainties and other factors that could cause actual results to differ
materially from those stated in such statements. Risks, uncertainties, and
factors that could affect the accuracy of such forward-looking statements, are
identified in the public filing made with the Securities and Exchange
Commission, and forward-looking statements should be considered in light of
those factors.
Income
Statement
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(US$
Millions)
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For
the 1st Quarter
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|||||||
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2009
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2008
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|||||||
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Revenues
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320.9 | 326.3 | ||||||
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Specialty
Plant Nutrition
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145.7 | 170.5 | ||||||
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Potassium
Nitrate and Blended Fertilizers(1)
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122.0 | 151.8 | ||||||
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Potassium
Sulfate
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23.7 | 18.8 | ||||||
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Iodine
and Iodine Derivatives
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43.1 | 60.1 | ||||||
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Lithium
and Lithium Derivatives
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24.5 | 42.1 | ||||||
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Potassium
Chloride
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72.1 | 15.5 | ||||||
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Industrial
Chemicals
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22.4 | 24.0 | ||||||
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Industrial
Nitrates
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21.7 | 23.2 | ||||||
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Boric
Acid
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0.7 | 0.8 | ||||||
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Other
Income
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13.1 | 14.1 | ||||||
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Cost
of Goods Sold
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(145.7 | ) | (196.9 | ) | ||||
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Depreciation
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(34.7 | ) | (25.2 | ) | ||||
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Gross
Margin
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140.5 | 104.2 | ||||||
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Selling
and Administrative Expenses
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(21.0 | ) | (18.0 | ) | ||||
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Operating
Income
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119.5 | 86.2 | ||||||
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Non-Operating
Income
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(13.2 | ) | (3.6 | ) | ||||
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Financial
Income
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4.0 | 3.0 | ||||||
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Financial
Expenses
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(7.9 | ) | (5.5 | ) | ||||
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Others
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(9.2 | ) | (1.1 | ) | ||||
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Income
Before Taxes
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106.3 | 82.6 | ||||||
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Income
Tax
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(21.0 | ) | (13.3 | ) | ||||
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Other
Items
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1.0 | (4.6 | ) | |||||
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Net
Income
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86.3 | 64.8 | ||||||
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Net
Income per ADR (US$)
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0.33 | 0.25 | ||||||
(1)
Includes Yara Specialty Fertilizers and Other Specialty
Fertilizers
Balance
Sheet
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(US$
Millions)
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As
of March 31
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|||||||
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2009
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2008
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|||||||
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Current
Assets
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1,685.2 | 1,058.6 | ||||||
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Cash
and cash equivalents
(1)
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569.2 | 166.4 | ||||||
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Accounts
receivable (2)
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407.3 | 348.2 | ||||||
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Inventories
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579.1 | 442.2 | ||||||
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Others
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129.7 | 101.8 | ||||||
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Fixed
Assets
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1,155.3 | 1,006.5 | ||||||
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Other
Assets
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108.3 | 99.9 | ||||||
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Investments
in related companies
(3)
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65.3 | 58.5 | ||||||
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Others
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43.0 | 41.5 | ||||||
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Total
Assets
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2,948.8 | 2,165.0 | ||||||
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Current
Liabilities
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619.1 | 280.6 | ||||||
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Short-term
interest-bearing debt
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303.5 | 16.4 | ||||||
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Others
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315.6 | 264.1 | ||||||
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Long-Term
Liabilities
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733.6 | 585.4 | ||||||
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Long-term
interest-bearing debt
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631.5 | 502.3 | ||||||
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Others
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102.2 | 83.1 | ||||||
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Minority
Interest
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46.3 | 51.0 | ||||||
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Shareholders'
Equity
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1,549.8 | 1,248.0 | ||||||
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Total
Liabilities
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2,948.8 | 2,165.0 | ||||||
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Current
Ratio (4)
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2.7 | 3.8 | ||||||
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Net
Debt / Total Capitalization (5)
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18.6 | % | 21.3 | % | ||||
(1)
Cash + time deposits + marketable securities
(2)
Accounts receivable + accounts receivable from related co.
(3)
Investments in related companies net of goodwill and neg. goodwill
(4)
Current assets / current liabilities
(5)
Net interest-bearing debt/ (Net interest-bearing debt + equity+ minority
int.)
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SOCIEDAD
QUIMICA Y MINERA DE CHILE S.A.
Conf:
/s/ Ricardo
Ramos
Ricardo
Ramos
Chief
Financial Officer & Business Development SVP
Date:
April 28, 2009