SQM - SQM's Q1 profit drops as high stockpiles across battery supply chain hit demand
2023-05-18 07:58:34 ET
Sociedad Quimica y Minera de Chile ( NYSE: SQM ) -2.9% pre-market Thursday after missing Q1 GAAP earnings expectations even as revenues rose 12% Y/Y to $2.26B, and revenue for lithium and its derivatives jumped 14% to $1.65B from the year-earlier quarter.
Q1 net income fell to $749.9M, or $2.63/ADR, from $796.1M, or $2.79/ADR, for the year-earlier quarter, as the change in subsidies in China and the high level of stock across the battery supply chain led to weaker demand, predominantly in China.
SQM ( SQM ) said Q1 average lithium sales prices jumped by more than a third but sales volumes slumped ~15% from a year earlier.
SQM ( SQM ) said a recent increase in customer activity causes it to believe the destocking period has ended and anticipates sales volumes will recover in the upcoming quarters.
Q1 adjusted EBITDA slipped more than 8% to $1.08B from a year ago.
"This year, we continue with our growth plans and expect to invest close to US$1.2B in expanding our production capacity in Chile and abroad," CEO Ricardo Ramos said.
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SQM's Q1 profit drops as high stockpiles across battery supply chain hit demand