SQM Reports Revenue Growth for Eighth Consecutive Year

The Chile based chemical manufacturer Sociedad Quimica y Minera de Chile (NYSE:SQM) reported revenue growth for the eighth consecutive year, with earnings 179% above the 2007 figures at US$1.91 per ADR.

The company's Total Revenues for 2008 reached US$1.77 bln, which was a significant increase from the US$1.19 bln achieved in 2007. Net Income arrived at US$501 mln.

According to product category, the SQM sold US$979 mln worth of Specialty Fertilizers, US$247 mln of Iodine and Iodine derivatives, US$172 mln of Lithium and Lithium derivatives, US$140 mln of Potassium Chloride, and US$124 mln worth of Industrial Chemicals.

With respect to the Specialty Fertilizer product category, the 69% growth was a result of a significant price increase throughout the year, offsetting the decline in sales volume. Prices for the segment rose on average 116% from 2007, which resulted mainly from the rise in prices for potassium-related fertilizers.

The company in an official statement argued that the decline in demand, which was felt mainly in the fourth quarter as a consequence of tight credit conditions, is

not sustainable given that specialty crop producers must fertilize to maximize yields and continue to provide export-quality products in order to maintain margins.

As of December 31, 2008, SQM's Net Financial Debt was US$333.8 mln, and the relationship Net Financial Debt/EBITDA was 0.45. The balance sheet showed US$446 mln of Current Liabilities, US$611 mln of Long-term Liabilities, and US$1.463 mln of Equity. Cash and Cash Equivalents increased significantly, from US$164 mln in 2007, to US$324 mln.

At the current price per ADR of US$27.13, the company trades at a P/E of 25.8, with a Market Cap of 7.14 bln. The share price has nearly doubled from the October low of $15.

The company's latest financial statements can be found here.

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Comments

[Jim Kingsdale:]

With EPS of $1.91 and a stock price of just under $27, that looks like a P/E of about 14, not 25? What am I missing?

Mar 23 10:16 AM

[Jimbo Cramer:]

Oil field brines will be the next big item imo. It is the only one of the 5 world wode possible sources of Lithium that have not been exploited. And one of the 3 types of lithium brines that can be tapped for the old but now new hot commodity. I am long SQM, very happy and feel it has an easy double from here. I am looking at a number of pure play jrs that can make a serious homerun in Lithium ... a jr that has brines that are deemed 'producible' for contained lithium is MCI: miningmarketwatch.net/...

Mar 24 03:40 AM

[Jimbo Cramer:]

miningmarketwatch.net/... is the url I was indicating for lithium.

Mar 24 03:42 AM

[Hallvardo:]

Sorry about that typo. The P/E was supposed to be 15, not 25.
My mistake!

Mar 27 01:35 PM