February 26, 2009 / 3:49 PM / 11 years ago

UPDATE 2-Chile's Soquimich sees stronger 1st qtr, 1st half

(Adds details on capital spending and markets; adds byline)

By Pav Jordan

SANTIAGO, Feb 26 (Reuters) - Soquimich, Chile’s leading exporter of fertilizer and the world’s biggest producer of iodine and lithium, said on Thursday profit would rise in the first quarter and first half versus the same periods last year.

Soquimich (SQM_pb.SN)(SQMa.SN)(SQM.N) Chief Executive Patricio Contesse said the company could see lower demand in certain markets, but a diversified client base should help it weather global market turbulence.

He forecast strong capital expenditures this year as Soquimich sticks to ambitious investment plans.

“Despite the recent market volatility and uncertainty generated by the global economic situation, we expect that net income for the first quarter and first half of 2009 will be higher compared to the same periods of the previous year,” Contesse said on a conference call with analysts on 2008 results.

Santiago-based Soquimich said this week its profit soared to $501.41 million in 2008 from $180 million in 2007.

For the fourth quarter, Soquimich said net profit nearly tripled, to $120.3 million from $44.6 million a year earlier.

“As a company, we continue to feel confident about the core fundamentals in all of our business lines,” Contesse said.

“We feel very comfortable that the bottom line in the first quarter will be much better than the first quarter of the previous year,” he said.


Contesse said Soquimich’s investment plans — to lay out some $1 billion from 2008 through 2010 to expand production capacity in key areas of potassium-based fertilizers, lithium and iodine — were on track.

He projected capital expenditures of $300 million this year, compared with $290 million in 2008.

Iodine is used in X-ray contrast media, biocides and pharmaceuticals. Lithium is used in chemical industries and for the production of lithium batteries, among other uses.

Contesse said customers’ operations showed lithium demand growing in the second quarter and second half of this year.

In potassium chloride, Contesse said, “This year we sold close to 190,000 tonnes, and our plan is to sell in 2009 more than 500,000 tonnes.”

Soquimich is also counting on lower costs in 2009 in key areas including energy, raw materials and exchange rates.

“Last year we spent on energy in the range of $150 million, and this year we are projecting, at actual levels of oil prices and the other energy components, in the range of $120 million,” Contesse told analysts.

Soquimich shares rose 0.91 percent on the Santiago bourse in early-afternoon trade to 17,500 pesos. (Reporting by Pav Jordan; editing by John Wallace)

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