Sociedad Quimica y Minera S.A.

Good day, everyone, and welcome to SQM's earnings conference call for the fourth quarter and full year 2025. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note this conference is being recorded. Now it's my pleasure to turn the call over to Megan Suter with Investor Relations. Please proceed.

Good day, and thank you for joining SQM's Earnings Conference Call for the fourth quarter and full year of 2025. This call is being recorded and webcast live. Our earnings press release and accompanying results presentation are available on our website, where you can also find the link to the webcast. Today's participants include Mr. Decado Ramos, Chief Executive Officer, Mr. Gerardo Llenes, Chief Financial Officer, Mr. Carlos Diaz, CEO of Nova Andino Lithio. Mr. Pablo Altamira, CEO of the Iodine and Plant Nutrition Division. And Mr. Mark Fons, CEO of the International Lithium Division. Also joining us today are members of the commercial and business intelligence teams. Mr. Felipe Smith, commercial vice president of Nova Andino Lithio. Mr. Pablo Hernandez, Vice President of Strategy and Development of Novandino Litio. Mr. Juan Pablo Belolio, Commercial Vice President of Plant Nutrition and Specialty Products. Mr. Alvaro Araya, CFO of the International Lithium Division. Mr. Andres Fontanas, Commercial Vice President of the International Lithium Division. And Mr. Max Vial, Head of Studies of the International Lithium Division. Before we begin, please note that statements made during this call regarding our business outlook, future economic performance, anticipated profitability, revenues, expenses, and other financial items, along with expected cost synergies and product or service line growth, are considered forward-looking statements under U.S. federal securities laws. These statements are not historical facts and are subject to risk and uncertainties that could cause actual results to differ materially. We assume no obligation to update these statements except as required by law. For a full discussion of forward-looking statements, please refer to our earnings press release and presentation. With that, I will now turn the call over to Chief Executive Officer, Mr. DeCarlo Ramos.

Good morning, everyone, and thank you for joining us today. 2025 was an important year for SQM. We finished the year by signing our association agreement with Codelco, creating Novandino Lithium, which enables long-term lithium production from the Salar de Atacama. At the same time, we deliver solid financial results, strengthen our operational performance across our key businesses, and continue advancing our long-term growth strategy. For the full year 2025, we reported revenues of $44.6 billion, slightly higher than the previous year, with net income of $588 million. These results reflect improved market conditions, strong operational execution, and the resilience of our diversified portfolio. During the fourth quarter, we saw particularly strong performance in lithium and iodine, two of our most strategic businesses. In lithium, we achieved record quarterly sales volumes across both our Chilean and international operations. At Novandina Lithio, sales volumes exceed 66,000 metric tons in the fourth quarter, more than 50% higher year-over-year, reflecting the expansion efforts we have implemented over the past several years. On the market side, we began to observe an important shift toward the end of the year. As we mentioned in our previous conference call in November, we saw the inflection point in lithium prices driven by a stronger than expected demand from energy storage system, together with some supply disruptions. This contributed to a tighter market environment and improving pricing trends. As a result, our average realized lithium price increased nearly 14% quarter over quarter, reaching close to $10 per kilogram in the fourth quarter. Given the demand momentum we have seen in recent months and limited new supply entering the market, we expect the pricing environment in the first quarter to be significantly stronger. Looking ahead, we continue to see strong long-term fundamentals for lithium, driven primarily by electric vehicles and energy storage systems. Operationally, we are currently running at full capacity at Novandino Lithium while continuing to advance expansion plans in the Salar de Atacama. In our international lithium division, the Monholland mine and concentrator perform well, and the Kiwana refinery continues progressing through the ramp-up phase. Early this year, we also celebrated the first treatment of lithium hydroxide from the Kiwana refinery in Australia, a milestone that highlights the progress of our international lithium strategy. Moving to iodine, the business delivered a strong contribution, representing approximately 42% of SQM's total gross margin during the year. By the end of 2025, we observed record iodine prices, supported by a tight supply conditions and a strong demand, particularly in the X-ray contrast media market. Looking ahead, we estimate the iodine market could grow by around 3% in 2026. and our sales volumes are expected to remain stable or increase slightly depending on market conditions. We expect to be able to finish our seawater pipeline project in the Tarapacá region, which will provide additional operational flexibility and should allow us to unlock incremental production capacity. In specialty plant nutrition, we saw 3% volume growth during the year, driven by specialty blends and value-added products. For 2026, we expect moderate volume growth of between 2% and 4% within a stable pricing environment. Before concluding, I would also like to highlight our continued progress in sustainability. During 2025, SKM strengthened its ESG performance and received important international recognition, including inclusion in the SP Global Sustainability Yearbook 2026, and a strong radius from Dow Jones Sustainability Index, MSCI, and Ecovaries. To conclude, we're entering 2026 with a strong operational momentum, improving lithium market conditions, and continuous strength in ion and specialty plant nutrition. Our teams remain focused on delivering reliable supply to our customers, executing our growth projects, and creating long-term value for our shareholders. Thank you for joining us today. I will now turn the call over to the operator for the Q&A session. Thank you.