Hold onto your hats, folks, because Chile’s SQM is rolling in the dough! The world’s second-largest lithium producer just posted a fourth-quarter net profit that’s more than triple what it was a year earlier. Talk about hitting the jackpot! And how did they do it? By tapping into the insatiable demand for lithium, that’s how. With car manufacturers churning out electric vehicles faster than you can say “climate change,” the need for this “white metal” has shot through the roof.
But it’s not just the electric vehicle market that’s causing a scramble for lithium. Oh no, it’s also the fact that SQM extracts the metal from South America’s sprawling salt flats that’s driving prices up. It seems everyone wants a piece of this briny action!
So, what were SQM’s numbers, you ask? How about a quarterly net profit of a whopping $1.15 billion for the three months to Dec. 31, 2022! And that’s not all, folks. Revenue for the quarter nearly tripled to $3.13 billion. I mean, that’s enough money to make even Scrooge McDuck jealous!
Of course, the CEO of SQM, Ricardo Ramos, was thrilled with the company’s “extraordinary results.” And who wouldn’t be? With record sales volumes for lithium and its derivatives, SQM is laughing all the way to the bank. And get this, some sales anticipated this year were brought forward ahead of an expected end to Chinese EV subsidies. Talk about being ahead of the game!
But that’s not all, folks. SQM has big plans for the future, and it’s going to cost a pretty penny. We’re talking about a $3.4 billion investment from 2023 to 2025, with a focus on expanding its Chilean lithium capacities. And that’s not even counting the $1.2 billion investment earmarked for this year alone! With plans to grow its lithium capacity from 210,000 tonnes forecast this year to 265,000 in 2025, it’s clear that SQM is not content to rest on its laurels.
But wait, there’s more! SQM also sells iodine, which is used in X-rays, and prices for this chemical hit a record in the fourth quarter. SQM is predicting higher sales volumes and prices this year as it works to expand its capacity. It seems that when it comes to making money, SQM is unstoppable!