Sociedad Quimica y Minera S.A.

Good day and welcome to the SQM fourth quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kelly O'Brien, head of investor relations. Please go ahead.

Good morning. Thank you for joining SQM's fourth quarter 2021 earnings conference call. This conference call will be recorded and is being webcasted live. 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. Speaking on the call today will be Ricardo Ramos Rodríguez, Chief Executive Officer, and Gerardo Illanes Chief Financial Officer. Carlos Diaz, Executive Vice President of the Lifseum business, and Pablo Altimiras, Executive Vice President of the iodine and nitrates business, will also be available to answer any questions. Before we begin, let me 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. They are 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, including our ability to successfully implement the Sustainable Development Plan. Risks, uncertainties, and factors that could affect the accuracy of such forward-looking statements are identified in our public filings made with the U.S. Securities and Exchange Commission, and in our earnings press release issued in 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 developments, or otherwise, except as required by law. I now leave you with our CEO, Ricardo Ramos.

Thank you, Kelly. Good morning, and thank you for joining the call today. Our earnings during the fourth quarter of 2021 were significantly higher than earnings reported during the same period last year. These results were Thank you very much. Our average prices in the potassium-chloride business line during the fourth quarter reached almost $685 per metric ton, prices that haven't been seen in over a decade. This pricing environment has also had an impact on the global prices of potassium nitrate, and our average price in the SPN business line was approximately 40% higher during the fourth quarter of 2021 when compared to the same period of 2020. Positive news was also seen in the island market with 2021 surpassing pre-pandemic levels. This strong recovery led to a strong pricing environment during the year, with prices increasing over 11% in the fourth quarter 2021 when compared to the third quarter, as a result of tight supply-demand equilibrium. We are expecting the outward pricing trend to continue during 2022. We are working on expanding our capacity and to bring on an additional thousand metric tons of capacity next year. In parallel, we are working on the Pampa or Coma project in the Tarapacá region will allow us to increase the effective iodine capacity by approximately 2.5 thousand metric tons. Using seawater for the leaching operations, and it is expected to begin operations during 2024. In the lithium market, our sales volumes met new records during 2021, when they surpassed 100,000 metric tons. We sold over 31,000 metric tons during the fourth quarter, with an average price of approximately $14,600 per ton. During the period, approximately 20% of the sales volumes we expect to sell in 2022 are contracted at a fixed price or at a variable price with specific floors and ceilings, while approximately 50% of the sales volume we have contracted have variable prices linked to specific price indices. The remaining 30% of our volumes for 2022 are still open. It is important to remember that we will see Alive between market prices and our realized average prices because of the structure of our variable price contracts. We believe that our prices in the first and second quarter of 2022 will be significantly higher than the prices reported during the fourth quarter 2021. Additionally, we believe that sales volumes will grow to about 140,000 metric tons during 2022. We are extremely proud of the successful lithium expansion in recent years. Our expansion to 180,000 metric tons of carbonate and 30,000 metric tons of hydroxide should be completed during the first half of 2022 ahead of schedule. We have begun working on a new project at the Carmen Lithium Facility in Chile that was announced with our With this project we will further expand our lithium carbonate and lithium hydroxide capacity to 210,000 metric tons and 40,000 metric tons respectively. Next year with an expected CAPEX of approximately 250 million. I remind you that this CAPEX was not included in the $2 billion CAPEX that was previously disclosed. We remain committed to our previously announced goal to reduce brine extraction, weather usage, and our carbon footprint in the Salar de la Cama. These growth plans and environmental goals to be met with relatively low CAPEX have only become possible after years of research and development due to improvements, expertise and of course a strong effort by our production and engineering teams.