Business Context and Reporting Period
Company: Chemical & Mining Co of Chile Inc (SQM)
Filing Type: Form 6-K (Earnings Release)
Reporting Period: Three months ended March 31, 2026 (1Q2026)
Release Date: May 26, 2026
SQM reported record first-quarter results driven by strong demand in lithium and specialty plant nutrition. The quarter marked the first full period of operation for the Nova Andino Litio joint venture with CODELCO.
Key Financial Metrics
| Metric (US$ Millions) | 1Q 2026 | 1Q 2025 | Change |
|---|---|---|---|
| Total Revenues | 1,760.1 | 1,036.6 | +69.8% |
| Gross Profit | 778.6 | 304.7 | +155.5% |
| Gross Margin | 44.2% | 29.4% | +14.8 pts |
| Net Income | 364.7 | 137.5 | +165.2% |
| EPS (US$) | 1.28 | 0.48 | +166.7% |
| Adjusted EBITDA | 837.0 | 359.6 | +132.8% |
| Adjusted EBITDA Margin | 47.6% | 34.7% | +12.9 pts |
Liquidity & Balance Sheet (as of March 31, 2026):
- Cash & Equivalents: $2,829.4 million (up from $1,750.3 million at year-end 2025).
- Total Debt: $5,111.9 million ($324.4m short-term + $4,787.5m long-term).
- Current Ratio: 2.8 (down from 3.3 at year-end 2025).
- Total Assets: $15,779.5 million.
Material Changes vs. Prior Period
- Lithium & Derivatives: Revenues surged 135.7% to $1,185.5 million. Sales volumes reached 69,000 metric tons of LCE (up 25% YoY). Average realized price for Nova Andino Litio rose ~95% YoY to $17.8/kg.
- Specialty Plant Nutrition (SPN): Revenues increased 12.6% to $239.0 million, driven by tighter supply conditions in Asia and reduced Chinese exports.
- Iodine & Derivatives: Revenues grew 8.2% to $275.9 million with volumes up 7% and prices up 1.3%.
- Potassium: Revenues declined 19.0% to $34.4 million due to a strategic shift to prioritize lithium brines, resulting in a 31% volume drop.
- Cost Structure: Cost of sales increased 34.1% to $981.5 million, reflecting higher production volumes and input costs, though gross margins expanded significantly.
Guidance, Outlook, and Risks
Management Commentary & Guidance
- Lithium Volume Guidance: Upgraded full-year sales volume growth expectation from 10% to 15% due to tight global supply-demand balance and strong BESS market demand.
- SPN Volume Guidance: Increased full-year sales volume growth expectation to approximately 10%, capitalizing on supply gaps in potassium nitrate markets.
- Pricing Outlook: Management expects average realized prices for lithium and iodine to remain firm or increase in Q2 2026.
- Expansion Projects:
- Salar Futuro: Environmental permitting documentation is being finalized for submission in coming months.
- Seawater Pipeline (Iodine): Commissioning phase; expected online in H2 2026 to boost capacity above 15,000 tons.
- Kwinana Refinery: Ramp-up continuing; nameplate capacity expected in 2027.
Risks and Contingencies
- Geopolitical Factors: Middle East conflicts impacting global fertilizer trade flows and supply chains.
- Market Dynamics: Potential decrease in global potassium nitrate demand (-5%) due to high prices causing farmers to rely on inventories.
- Regulatory: Progress on environmental permitting for Salar Futuro is critical for future growth.
- Forward-Looking Statements: Actual results may differ due to risks including implementation of the Sustainable Development Plan and capital expenditure requirements.
Investor Verification Checklist
- Lithium Pricing Sustainability: Verify if the ~95% YoY price increase in Nova Andino Litio is sustainable given potential new supply entries in H2 2026.
- Potassium Volume Decline: Confirm the long-term strategic impact of the 50% expected volume decline in the Potassium segment on overall revenue mix.
- Capital Expenditures: Review upcoming CAPEX requirements for the Salar Futuro project and Kwinana refinery ramp-up against current cash reserves ($2.8B).
- Joint Venture Performance: Monitor the operational efficiency and profit-sharing mechanics of the Nova Andino Litio partnership with CODELCO.
- Regulatory Timeline: Track the submission and approval status of the Salar Futuro environmental permit.