SQM — Sociedad Química y Minera de Chile S.A.

SQM Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Full Year 2025 Revenues: $44.6 billion, slightly up from the previous year.
• Net Income: $588 million, reflecting improved market conditions and operational performance.
• Q4 Highlights: Record quarterly lithium sales volumes, with over 66,000 metric tons sold, up more than 50% year-over-year. Average realized lithium price increased nearly 14% quarter-over-quarter to approximately $10 per kilogram.

2. Strategic Updates and Business Highlights:

• Nova Andino Litio: Partnership with Codelco established, enabling long-term lithium production from Salar de Aacama.
• Lithium Operations: Full capacity utilization at Nova Andino Litio; expansion plans in Salar de Atacama are ongoing.
• International Lithium Division: Successful ramp-up of Mount Holland mine and concentrator; first shipment of lithium hydroxide from Kwinana refinery celebrated.
• Iodine Business: Strong contribution to gross margin (42%); record iodine prices observed due to tight supply and strong demand, particularly in the x-ray contrast media market.
• Sustainability: Improved ESG performance recognized by inclusion in the SP Global Sustainability Yearbook 2026 and strong ratings from various sustainability indices.

3. Forward Guidance and Outlook:

• Lithium Demand: Anticipated strong demand driven by electric vehicles and energy storage systems; expected sales volume increase of 10% in 2026.
• Iodine Market: Projected growth of around 3% in 2026; stable or slightly increasing sales volumes expected.
• Specialty Plant Nutrition: Moderate volume growth forecasted between 2% and 4% for 2026.
• Pricing Outlook: Expectation of a stronger pricing environment in Q1 2026, with prices likely to remain closer to current levels than previous lows.

4. Bad News, Challenges, or Points of Concern:

• Cost of Production: Significant increase in costs noted in Q4, primarily due to higher lease payments; concerns raised about potential cost increases from sulfate operations.
• Market Volatility: Pricing remains volatile; uncertainty about future pricing trends beyond Q1 2026.
• Delays in Expansion: The timeline for increasing Chilean capacity to 240,000 tons has been pushed to 2028 due to optimization projects, which may affect growth expectations.
• Supply Disruptions: Mention of supply disruptions in the lithium market, particularly related to lepidolite producers in China, could impact future supply dynamics.

5. Notable Q&A Insights:

• Lithium Production Mix: Plans to focus on both lithium carbonate and hydroxide production, with flexibility in operations across Chile and China.
• Minority Interest and Dividends: Clarification on how dividends to Codelco will be calculated based on the net income from the joint venture, with expected payments in April.
• Iodine Sales vs. Demand: Higher-than-expected iodine sales in Q4 attributed to a lack of expected capacity from third parties; stable sales anticipated for 2026 despite new capacity coming online later than expected.
• Exploration Activities: Updates on exploration efforts in Australia, Namibia, and Canada, with ongoing drilling programs and positive early-stage results.

Overall, SQM demonstrated solid financial performance in 2025, with strategic initiatives positioning the company for continued growth, particularly in lithium and iodine markets, despite facing some operational and market challenges.