Sociedad Quimica y Minera S.A.

Good day and welcome to the SQM first quarter 2024 earnings conference call. All participants will be in 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 telephone keypad. To withdraw your question, please press star then two. We do ask that you limit yourselves to one question and one follow-up. Please also note today's event is being recorded. I'd now like to turn the conference over to Irina Axanova, Head of Investment Relations. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for joining FQM's earnings conference call for the first quarter of 2024. This conference will be recorded and is being webcast 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. Gerardo Yanez, our Chief Financial Officer, will be speaking on the call today. Carlos Diaz, Executive Vice President of Lithium. Mark Fons, Vice President of Lithium Development and M&A. Max Vial, Lithium Market Intelligence Director. Pablo Altamiris, Executive Vice President of Nitrates and Iodine. And Juan Pablo Bilolio, Commercial Vice President of Iodine and Industrial Chemicals, are also available to answer any questions. Our Chief Executive Officer, Ricardo Ramos, unfortunately couldn't join the call today. Before we begin, I would like to remind you that some statements made during this conference call regarding our business outlook, future economic performance, anticipated profitability, revenues, expenses, and other financial items are considered forward-looking statements. Please note that the same cautionary language used in our press release and presentation also applies to this call. And now I will leave you with our Chief Financial Officer, Gerardo Yanez.

Thank you, Irina. Good afternoon, everyone, and thank you for joining us today. As you may know, we reported our first quarter 2024 earnings result yesterday. On this call, we will be discussing the key drivers behind these results and sharing our outlook for the year. Our total revenues for the first three months of the year reached almost $1.1 billion, with an adjusted EBDA of over $400 million. Our net profit was impacted by a one-time adjustment related to the accounting treatment of the lithium mining tax in Chile from previous years, adding up to almost $1.1 billion as of March 31, 2024. This is not having a significant cash impact since the majority of this amount, close to $930 million, was paid in prior years. During the first quarter of this year, we delivered strong growth in our sales volume across all of our major business lines, reporting record high quarterly sales volumes in the iron business, positive sales volume recovery in the fertilizer business, and almost 30% higher lithium sales volumes compared to the same period last year. This growth helped partially offset the impact of lower average sales. prices realized for the first quarter 2024. In our nitrates and iodine business unit, we are proud of the results of the ramp-up of Pampa Blanca project, which is expected to reach approximately 1.3 thousand metric tons of new iodine capacity this year. Also, a few months ago, we began the construction of a seawater pipeline, which is expected to be completed in 2026. It is an exciting development, but it's also a challenging project. Almost 38 kilometers long with a total elevation of over 1,000 meters running from the Pacific coast near the city of Iquique to our operations. Once completed, the pipeline will have a capacity of 900 liters per second and will allow us to expand our production capacity even further while delivering fresh water to some neighboring communities. We have seen positive demand trends in the iron and potassium nitrate market since the beginning of the year. Our outlook is that the iron market demand could grow by approximately 4% this year, approaching 2022 levels. Our iron sales volumes are projected to increase in 2024 compared to last year, with an expected stable average sales price with a possibility of a slight upside. We are similarly optimistic about the potassium nitrate market outlook, with expectations of up to a 15% growth in the demand this year. Our sales volumes are also anticipated to follow a similar pattern. Potassium nitrate prices have been relatively stable over several quarters, and we believe this trend could continue for the remainder of the year. In the lithium business unit, Having completed expansion of our lithium carbonate capacity in Chile to 210,000 metric tons, we're now focusing on a series of initiatives that should allow us to increase this capacity to 240,000 metric tons by the end of the year, mainly through process improvements, increased quality and efficiency of existing production facilities. Our lithium hydroxide capacity in Chile has reached 40,000 metric tons annually, and we expect to complete this expansion to reach 100,000 metric tons per year during 2025. In China, we completed the modification of the Dishim lithium hydroxide conversion facility with a total capacity of 20,000 metric tons per year. This project represents years of innovation and development of a chemical facility to refine lithium sulfate produced in the Salar Adakama to battery-grade lithium hydroxide. At the same time, we have reached agreements to toll approximately 20,000 metric tons of lithium sulfate coming from the Salada da Gama into lithium hydroxide in China. All of this, together with the initiatives we're working on in Australia, should let us reach a total production capacity of more than 300,000 metric tons of lithium products by the end of 2025. Turning to broader lithium markets, we have observed some encouraging trends during the first month of this year strong demand growth have been driven by electric demand market mainly in china which accounts for almost 75 percent of global lithium demand we anticipate that the total ev sales could reach 17 million units by 2024 representing a 22 percent increase from 2023 and total lithium demand could exceed 1.1 million tons in 2024, representing a 20% increase compared to the previous year. Given this demand growth, we have anticipated our sales volumes outlook for this year, expecting to sell close to 200,000 metric tons. The expected growth in global lithium supply this year could be up to 30% compared to 2023. However, given current lithium prices, the expected supply from high-cost producers could be affected, providing some price stability as has been seen since February this year. Before concluding and opening the line for questions, I would like to ask Mark to share with us some of the recent developments in our lithium initiatives abroad.