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SQM: On Track for Good News
SQM Reaffirms Market Outlook
Tue. September 30, 2008; Posted: 12:50 PM
SANTIAGO, Chile, Sept 30, 2008 /PRNewswire-FirstCall via COMTEX/ — SQM | Quote | Chart | News | PowerRating — Sociedad Quimica y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A), 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 40,000 tons 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(1) less than 0.5 times, and given the strong projected cash flows, SQM should maintain solid financial indicators in the coming years.
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 a 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.
For further information, please visit our Web site, www.sqm.com, or contact:
Patricio Vargas, 56-2-4252274 / patricio.vargas [Email address: patricio.vargas #AT# sqm.com - replace #AT# with @ ]
Carolyn McKenzie, 56-2-4252074 / carolyn.mckenzie [Email address: carolyn.mckenzie #AT# sqm.com - replace #AT# with @ ]
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.
(1) Net financial debt = total financial debt less cash and cash equivalents. EBITDA = operating income plus depreciation.
SOURCE SQM
http://www.sqm.com
For full details on Sociedad Quimica Chile (SQM) click here. Sociedad Quimica Chile (SQM) has Short Term PowerRatings of 5. Details on Sociedad Quimica Chile (SQM) Short Term PowerRatings is available at This Link.
SQM Backs Market Outlook - Quick Facts
9/30/2008 12:59 PM ET
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(RTTNews) - Tuesday, Sociedad Quimica y Minera de Chile S.A. (SQM: News ) reaffirmed 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.
The company said that it would achieve record results in the third quarter and it believes that the this trend would continue in the fourth quarter and next year.
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5 responses so far ↓
1 paultaut // Oct 1, 2008 at 8:49 pm
Jim, “Buy on the Rumor, sell on the News”, SQM is an Alt. Energy stock, Which means it is currently tainted with the same stigma as commodities in general.
Besides, it is still in Waterfall mode or lets try to catch the Falling Knife mode. The only support this stock has is in the $20 and below area. It has yet to “bounce, retest and bounce higher with higher lows”. It hasn’t even begun building a base.
Apparently, Chinese oil stockpiles were much higher than I originally thought. Sinopec has announced a cutback in oil imports for the rest of the year…8%.
The Senate has passed the Bailout Package 75-25. Look for the stock market to sink on this news.
2 paultaut // Oct 1, 2008 at 9:23 pm
One other item, take a look at the PE ratio for Dry Ships, DRYS.
Please use it as an example of what psychology will do to Valuations in general.
Bear Markets translate into irrational behavior. Pain thresholds are reached as people vow never to invest in the stock markets again. There is still way too much enthusiasm built in, too much exuberance about even the short term future for the S&P let alone another year of downward revisions.
I actually see some stocks I own going up in price, but then, they aren’t owned by hedge funds, mutual funds, they aren’t followed by ANAlysts or are part of any index. They are fledgling niche players. Many have amazing growth rates which will continue even in these trying times.
Take a look at SRRY, I own it, have since I stumbled on it somewhere a year or so ago. After my initial purchase it dropped like a rock. Sales and new offices continued to rise and it is now up a couple of hundred percent since its lows.
Another Junk stock would be CVIC which is similar but is unfortunately traded on The Vietnamese stock market which is down some 80%. The PE ratio is around 4, Give it 5 years. It could easily surpass $10 provided it doesn’t go Bankrupt in that interval.
Cum ba ya, whatever will be will be.
3 Bruce // Oct 3, 2008 at 5:10 am
Well,
40,000 tons equal how many 400 lbs batteries per year?
4 paultaut // Oct 3, 2008 at 9:31 am
Metric or american? At a rate of 5 per ton, 200,000 American. I”m not going to try the Metric Conversion. Why do you ask?
Copper stored at the LME doubled before the Olympics, inventories have gone down 7,000 tonnes since.
5 Bruce // Oct 4, 2008 at 3:13 am
Metric or American for the argument is the same. SQM mines 40k tons and if a electric car battery weighs 400 lbs and 2oo lbs is lithium ore, then that would mean 400,000 cars per year maxs !
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