Chile’s SQM, the world’s second-largest lithium producer, reported a fourth-quarter net profit that was more than triple of the previous year’s profit. The results narrowly beat the market estimates due to surging demand and tight supplies for the white metal.
Prices for lithium, which SQM extracts from brine from South America’s vast salt flats, have skyrocketed in recent years as automakers seek to produce more electric vehicles (EVs) to comply with stricter climate rules.
SQM reported a quarterly net profit of $1.15 billion for the three months ending December 31, 2022, edging out analysts polled by Refinitiv’s average estimate of $1.14 billion.
Extraordinary results
Revenue nearly tripled to $3.13 billion, exceeding the average estimate of $2.99 billion, and core earnings increased to $1.67 billion.
CEO Ricardo Ramos expressed his satisfaction with the “extraordinary results.”
According to the company, profits were boosted by record sales volumes of lithium and its derivatives, which SQM primarily ships to Asia.
According to the company, some sales planned for this year have been accelerated ahead of the expected end of Chinese EV subsidies.
SQM reported fourth-quarter lithium volumes of 43,000 tonnes, up 38% yearly, selling at a record average of $59,000 per tonne. A year ago, a tonne of lithium cost only $14,600.
SQM to invest and increase lithium capacity
SQM said in a separate statement that it planned to invest $3.4 billion between 2023 and 2025, primarily to expand its Chilean lithium capacities.
The roadmap calls for a $1.2 billion investment this year.
SQM expects its lithium capacity to increase from 210,000 tonnes this year to 265,000 tonnes in 2025 as plants in southwestern Australia and China’s Sichuan come online.
SQM also sells iodine, and it reported that prices for the X-ray chemical hit a record in the fourth quarter, forecasting higher sales volumes and prices this year as it works to enlarge its capacity.
See Also
- India’s newly discovered 5.9m tonnes of lithium reserves to boost its electrification efforts
- Top Lithium reserves, producing countries and companies
- Geothermal power plants could ensure Germany’s lithium extraction needs
- NIO acquires 12% of Australia’s Greenwing Resources
