SQM Reports Net Income of Nearly $3.9 Billion in 2022, 7X Increase From 2021
- 15-Mar-2023 10:59 AM
- Journalist: Nicholas Seifield
Santiago [Chile]: Sociedad Quimica y Minera de Chile S.A. (SQM) had an incredibly successful year in 2022, reporting earnings of US$3,906.3 million - nearly 7x higher than the US$585.5 million earned in 2021. This increase was driven by a tremendous growth in gross profit, which hit US$5,736.6 million (representing 53.6% of revenues), compared to just US$1,090.1 million (38.1% of revenues) for 2021. SQM also saw corresponding increases in revenue - totalling US$10,710.6 million for 2022 compared to only US$2,862.3 million reported for 2021.
SQM, a leading provider of specialty plant nutrients and industrial chemicals, is expecting to invest an estimated US$3.4 billion into capital expenditure for the period 2023-2025. This includes necessary maintenance costs as well as expanding Lithium capacity in Chile to 210,000 metric tons of Lithium Hydroxide, which includes 100,000 metric tons of the product itself. Additionally, the Mt. Holland project is expected to receive close to US$450 million during this period as well.
Revenues from Lithium and derivatives soared in the twelve-month period ending December 2022, with totals reaching US$8,152.9 million - 770.9% higher than 2021's figures of US$936.1 million.
SQM enjoyed a remarkable success in their Lithium business in 2022, with record-high sales volumes of 157,000 metric tons and average sales prices of close to US$52,000 per metric ton. Demand for SQM's cathodes and electric vehicles surged in the fourth quarter of 2022, likely due to anticipation that Chinese electric vehicle subsidies would not be extended past 2023.
Sales of Lithium have been high in the past few months, with some of the 2023 sales being brought forward and delivered during the final months of 2022. As expected, this led to higher sales rates in the fourth quarter of 2022, followed by a slow-down in sales surrounding the Chinese New Year celebration. As a result, monthly Lithium sales rates were lower over the first two months of 2023, compared to what was seen at the end of last year.
SQM has reported strong demand growth in the electric vehicle markets, with sales rising significantly - especially in the United States. This is due to the Inflation Reduction Act that was implemented last year. As a result of this, SQM anticipates that demand for electric vehicles will grow more than 20% this year compared to 2022.
It should also be noted that SQM's Lithium and Derivatives segment accounted for nearly 79% of their total gross profit in 2022. This suggests that SQM could have an even better year in 2021 if their segments remain successful.