Sociedad Quimica y Minera S.A.

Good day and welcome to the SQM second quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Kelly O'Brien. Please go ahead, ma'am.

Good morning. Thank you for joining our second quarter 2020 earnings conference call. This conference call will be recorded and is being webcast live. Following this call, you will be able to access the webcast at our website, www.sqm.com. Our earnings press release and a presentation with a summary of the results have been uploaded to our website, where you can also find a link to the webcast. Joining our call today as speakers are Ricardo Ramos, CEO, Gerardo Illanes, CFO, and Pablo Altimiras, Vice President of Lithium and Iodine Businesses. Before we begin, we would like to remind you that statements in this conference concerning the company's business outlook, future economic performances, anticipated profitability, revenues, expenses or other financial items, anticipated cost synergies and product or service line growth together with other statements that are not historical facts are forward-looking statements as the term is defined under federal securities laws. Any forward-looking statements are estimates reflecting the best judgment of SQM based on currently available information and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated in such statements. Risks, uncertainties, and factors that could affect the accuracy of forward-looking statements are identified in our public filings made with the US Securities and Exchange Commission and in our earnings release issued last night. and these forward-looking statements should be considered in light of those factors. We assume no obligation to update such statements, whether as a result of new information, future development, or otherwise, except as required by law. I now leave you with our CEO, Ricardo Ramos.

Thank you, Kelly, and good morning. Thank you for joining our earnings call today. Our second quarter net income, as you know, reached approximately $50 million. While uncertainty continues in the market in which we sell, There were also many positive things that I would like to comment on before we speak more specifically about the markets. First, we published our annual sustainability report, which complies a significant amount of useful information related to the sustainability of our business. This year was the first time that this report was audited and certified by a third party. As a global company, we are aware of our responsibility to protect the environment and communities. We understand that sustainability means continuous improvement, and for that reason, we are finalizing an ambitious plan related to sustainability, and we will release our goals in the coming months. Our team in Chile and around the world does not cease to impress me. I credit their dedication, hard work, and attention to safety and health measures to the reason why we have been able to safely continue operating with no material disruptions. Furthermore, we have not only been able to meet our production goals so far in 2020. In some products, we have been able to exceed them. As we mentioned in the earnings release last night, our lithium production levels are at an all-time high, and we are currently producing at a rate of higher than 70,000 metric tons per year. While we keep on working on our lithium carbonate and lithium hydroxide expansions, this production will allow us to increase our market share as planned during 2020, even as market demand is expected to be similar to levels seen last year. Looking at the numbers published last night, our net income for the second quarter reached about $50 million, lower than the $70 million reported during the same period last year, But revenues, gross profit, and net income during the second quarter were all higher than what we reported during the first quarter of the year. In line with our expectations, we saw significantly higher sales volumes in our SPN, lithium, and industrial chemical business lines when we compared to the first quarter. In the fertilizer market, we saw lower potassium chloride prices in the second quarter and may continue to see price volatility during the remainder of the year. These lower prices in the potassium chloride market and uncertainty in the short term have indirectly and negatively impacted the price trend in the specialty fertilizer market. On the other hand, higher prices in iodine in the first half of the year had a positive impact in our results. I'm going to let Pablo comment in more detail about what we are currently seeing in the iodine and lithium markets.