Chile’s SQM, a prominent lithium producer ranking second globally, reported a 32.5% decline in its net profit for the second quarter of the year compared to the same period last year, largely attributed to decreased commodity prices. The miner disclosed a net profit of $580.3 million for the three-month span ending in June, resulting in earnings per share of $2.03. However, these figures fell short of the analysts’ consensus estimate of $2.88, as per Refinitiv’s poll.
The company’s revenue for the quarter amounted to $2.05 billion, representing a 21% decrease from the previous year.
Despite the drop in earnings, SQM achieved record sales volumes of lithium and derivatives, reaching 43.1 thousand metric tons, a notable 26% increase from the previous year. Nonetheless, average selling prices experienced a decline of nearly 37% compared to the corresponding period.
In its statement, SQM noted that although the second quarter of 2023 saw considerably higher sales volumes, this positive impact was offset by reduced average selling prices compared to the same period in the prior year.
Looking ahead, the company expressed its anticipation of surpassing the sales volumes achieved in the first half of the year during the latter half. However, SQM adjusted its production volume projection for 2023 to a range of 180,000 to 190,000 tons due to delays in the start-up of its China refinery. This revised forecast marks a reduction of around 10% from the earlier prediction. In March, CEO Ricardo Rodriguez had indicated a target production range of 200,000 to 210,000 tons for the year.
SQM has been engaged in discussions with Chile’s state-owned Codelco regarding new lithium contracts, a negotiation occurring amid government efforts to enhance its oversight of projects.