Sociedad Química y Minera de Chile S.A. (NYSE:SQM) Q1 2016 Earnings Conference Call - Preliminary Transcript

May 18, 2016 • 08:00 pm ET

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Sociedad Química y Minera de Chile S.A. (NYSE:SQM) Q1 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the SQM First Quarter Earnings Conference Call. All participants will be in a listen only mode. [Operator Instructions] After today's presentation, there'll be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over toGerardo Illanes, he is the Vice President of finance and Investor Relations. Please go ahead.

Executive
Gerardo Illanes

Thank you.

Good morning, everyone and welcome to SQM's first quarter 2016 earnings conference call. For your information, this call will be recorded and is being webcast live. You may access the webcast later on at our website www.sqm.com.

Joining me today, our speakers are Patricio Solminihac, Chief Executive Officer, and Ricardo Ramos, CFO.

Before we begin, let me remind you that statements in this conference concerning the Company's business outlook, future economic performance, 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 law.

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 filings made with the Securities and Exchange Commission. And forward-looking statements should be considered in light of those factors.

I now leave you with our Chief Executive Officer, Patricio Solminihac, for brief comments before we move to Q&A.

Executive
Patricio Solminihac

Good morning, and thank you for joining SQM first quarter 2016 earnings conference call. Yesterday, we posted our first quarter results. We reported net income of $58.5 million down from the $71.7 million, we reported for the first quarter of 2016. Revenues for the first quarter of the year, totaled $391.8 million, similar to the first quarter of last year.

EBITDA margins for the quarter was approximately 40%, which is lower than the first quarter of 2015. Overall, the main trends, we saw during the quarter, where lower prices and higher volumes. The higher volumes helped keep revenue stable, but the lower prices put pressures on margin.

The exception is our liquid [Phonetic] business, where higher prices and higher volume lead to higher revenues and margins. I would like to point out that although our gross profit of $114 billion for the quarter was lower than expected, we expect that gross profit for the full year 2016 will be better than 2016, gross profit. I will briefly describe that, what we're seeing in the different business line started with the fertilizers segments.

In a specific plan nutrition, revenues and sales volumes were flat compared to the first quarter of 2015. However, the total mix demonstrated the positive results we are obtaining from our strategy of targeting the water soluble fertilizer market. Focusing on this market has allowed