SQM has reported a net profit for the fourth quarter that is more than three times that of the same period a year ago, narrowly surpassing projections due to rising demand and limited supplies of the white metal.
The world’s second-largest lithium producer reported a quarterly net profit of $1.15 billion for the three months ending December 31st, edging out analysts’ average forecast of $1.14 billion.
Additionally, revenue for the quarter nearly tripled to $3.13 billion, exceeding the average estimate of $2.99 billion, resulting in an increase in core earnings to $1.67 billion.
A scramble for lithium, which SQM extracts from brine in South America’s expansive salt plains, has pushed up prices in recent years as automakers seek to produce more electric vehicles (EVs) to comply with stricter climate regulations.
Ricardo Ramos, the chief executive officer, stated that he was “well pleased with the extraordinary results.” with the results.
Record sales volumes of lithium and its derivatives, which SQM primarily exports to Asia, fueled the company’s profits, it was reported. Some sales anticipated for this year were shifted forward in anticipation of the anticipated end of Chinese EV subsidies.
SQM’s fourth-quarter lithium volumes increased by 38 percent year-over-year to 43,000 tonnes, and were sold at a record average price of $59,000 per tonne. A year ago, lithium was sold for only $14,600 per tonne.
SQM stated in a separate statement that it intended to invest approximately $3.4 billion between 2023 and 2025, with an emphasis on expanding its lithium capacities in Chile. The plan calls for an investment of $1.2 billion for this year.