UNITED
STATES OF AMERICA
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT OF
FOREIGN ISSUER
PURSUANT
TO RULE 13A-16 OR 15D-16
OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Includes
SQM’s earnings release for the nine months ended September 30,
2010.
SOCIEDAD QUIMICA Y MINERA DE
CHILE S.A.
(Exact
name of registrant as specified in its charter)
CHEMICAL AND MINING COMPANY
OF CHILE INC.
(Translation
of registrant's name into English)
El Trovador 4285, Santiago,
Chile (562) 425-2000
(Address
and phone number of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form 20-F x
Form 40-F ¨
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If "Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82________
For
Immediate Release
SQM
REPORTS EARNINGS FOR THE FIRST NINE MONTHS OF 2010
Highlights
|
|
·
|
SQM
reported net income for the first nine months of 2010 of US$276.3 million,
an increase of 6.5% over the first nine months of
2009.
|
|
|
·
|
Earnings
per ADR totaled US$1.05 for the first nine months, compared to US$0.99 for
the same period of 2009.
|
|
|
·
|
Revenues
for first nine months of 2010 were 25.9% higher than that of first nine
months of 2009.
|
Santiago, Chile, November 23, 2010.-
Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock
Exchange: SQM-B, SQM-A) reported today earnings for the first nine months of
20101 of
US$276.3 million (US$1.05 per ADR), an increase of 6.5% with respect to the same
period of 2009, when earnings totaled US$259.4 million (US$0.99 per
ADR). Gross
Margin reached US$454.4 million (34.3% of revenues), 11.5% higher than
the US$407.5 million (38.7% of revenues) recorded during the first nine months
of 2009. Revenues totaled US$1,324.7
million for the first nine months, representing an increase of 25.9% over the
US$1,052.2 million reported in the same period of 2009.
The
Company also announced a year-over-year earnings increase of 11.3% for the third
quarter of 2010, reporting
quarterly net income of US$94.8 million (US$0.36 per ADR) compared to the
2009 figure of US$85.2 million (US$0.32 per ADR). Gross Margin for the third
quarter reached US$151.2 million, 15.3% higher than the US$131.1 million
recorded for the same period of 2009. Revenues totaled US$459.5
million, an increase of approximately 19.7% with respect to the third quarter of
2009, when revenues amounted to US$383.8 million.
Patricio
Contesse, SQM’s Chief Executive Officer, stated, “We have continued to observe
positive demand recovery across all of our business lines as markets move passed
2009 lows. The market uncertainty that characterized 2009 has dissipated and
consumer confidence has returned to markets, as the global economic situation
improves.”
Mr.
Contesse continued, “During the first nine months of 2010 demand for all of our
business segments has recovered more robustly than initially expected,
reflecting the strong, underlying fundamentals in each market. We anticipate
that this momentum will continue during the remaining months of the year and
through next year, and considering that the Company is in a unique position to
capture growth in each of its markets, we remain optimistic about the long term
prospects for SQM.”
1 Figures for the first nine months of 2010 have been prepared according
to IFRS standards, and figures for the first nine months of 2009 have also been
prepared according to IFRS for comparative purposes.
Segment
Analysis
Specialty Plant Nutrition
(SPN)
Revenues
from our SPN business line for the first nine months of 2010 totaled US$452.5
million, 13.0% higher than the US$400.3 million recorded for the same period in
2009.
Third
quarter 2010 revenues reached US$151.5 million, an increase of 6.9% over the
US$141.7 million recorded in 2009.
Sustained
improvement in potash markets has continued to provide stability to the
fertilizer sector and positively impact major SPN markets. Sales volumes for SPN
during the first nine months of 2010 improved substantially, by more than 25%,
over volumes recorded in the same period of the previous year, reaching
pre-crisis volumes of 2008. Improved global economic conditions have helped
support demand for high value crops, and improved pricing conditions for certain
crops have also contributed to more attractive grower economics which in turn
have driven demand for specialty fertilizers.
Average
prices for the first nine months of the year in this segment decreased compared
to the same period last year, in line with global price trends in potassium
markets. However, in recent months we have observed slightly higher prices for
SPN products, and we expect this trend to continue.
SPN gross margin2 for the
first nine months of 2010 accounted for approximately 29% of SQM’s consolidated
gross margin.
Iodine and
Derivatives
Revenues
from sales of iodine and derivatives during the first nine months of 2010
totaled US$241.8 million, an increase of 72.4% with respect to the US$140.3
million reported for the first nine months of 2009.
Iodine
and derivatives revenues for the third quarter of 2010 amounted to US$91.8
million, an increase of 98.5% compared to the US$46.3 million recorded the
previous year.
Iodine
demand in 2010 has moved well above market lows of 2009 and has surpassed market
demand recorded in 2008. In recent months we have observed healthy signs from
industrial applications of iodine such as nylon, biocides, LCD screens and
fluoro-chemicals, while demand for human and animal health and nutrition has
remained stable. We estimate that the inventory restocking observed during the
second quarter of the year has decreased, and inventory levels have now reached
normal, operational levels. Consequently strong sales volumes for the third
quarter are a result of stronger end consumption.
Sales
volumes for the first nine months of 2010 increased substantially over volumes
posted in 2009, while prices remained stable year-over-year. During recent
months, demand for iodine and derivatives has been steady which has allowed us
to remain optimistic regarding 2010 market performance and market growth in the
coming years.
Gross margin for the Iodine
and Derivatives segment accounted for approximately 23% of SQM’s consolidated
gross margin for the first nine months of 2010.
Lithium and
Derivatives
Revenues
for lithium and derivatives totaled US$114.3 million during the first nine
months of 2010, an increase of 35.4% with respect to the US$84.4 million
recorded for the first nine months of 2009.
Third-quarter
2010 lithium revenues increased 15.4% with respect to the third quarter of 2009,
amounting to US$36.8 million, compared to US$31.9 million in
2009.
Conditions
in the lithium market remained positive through the third quarter as improved
demand for the majority of lithium applications translated into higher sales
volumes compared to the same period of last year. The supply-chain restocking
observed during the second quarter of 2010 has subsided, and we estimate that
inventory levels, while not completely saturated, have returned to more
normalized levels. As a result and in line with our estimates for the quarter,
volumes posted in the third quarter of 2010 were significantly higher than the
third quarter of 2009 and similar to the average volumes for the first half of
2010. Year-to-date volumes, however, remain well above those observed during
2009. Prices in this segment have remained relatively stable since market prices
were adjusted downward during the final months of 2009, and year-over-year
prices, as a result, have fallen approximately 20%.
Looking
forward the lithium market is poised to grow in the medium-term supported by the
development of new technologies for a range of energy storage applications.
Coupled with steady growth in industrial applications of lithium, the outlook
for this market remains optimistic.
Gross margin for the Lithium
and Derivatives segment accounted for approximately 11% of SQM’s consolidated
gross margin for the first nine months of 2010.
Potassium Chloride &
Potassium Sulfate (MOP & SOP)3
Potassium
Chloride and Potassium Sulfate revenues for the first nine months of 2010
totaled US$356.8 million, a 24.3% increase with respect to the first nine months
of 2009, when revenues amounted to US$287.1 million.
Year-over-year
potassium chloride revenues grew 9.7% in the third quarter, reaching US$114.4
million, compared to US$104.3 million for the same period of 2009.
We
continued to observe improved conditions in potash markets during the third
quarter of 2010. Healthy demand in recent months was underpinned by improved
farmer economics and reduced global grain inventories. Volumes in major markets
have moved well above 2009 lows, and we believe that the solid fundamentals of
the potash industry will continue to carry this market forward.
Average
prices for the first nine months of 2010 were substantially lower than the same
period of last year. However, recent announcements of price increases in major
spot markets are not reflected in average prices recorded for the third quarter.
While these announcements may not be fully reflected in 2010 results, they have
set the stage for a positive price trend in the short-term, supported by
stronger fertilizer markets.
Our
expansion of potassium-based products from the Salar de Atacama continues to
develop according to plans, and our potash sales volumes grew by over 80% in the
first nine months of 2009 compared to the same period of last year.
Gross margin for potassium
chloride and potassium sulfate accounted for approximately 25% of SQM’s
consolidated gross margin for the first nine months of 2010.
Industrial
Chemicals
Industrial
Chemicals revenues for the first nine months of 2010 reached US$109.5 million,
35.3% higher than the US$80.9 million recorded for the same period of the
previous year.
Revenues
for the third quarter totaled US$41.8 million, an increase of 21.8% with respect
to the third-quarter 2009 figure of US$34.3 million.
Performance
of industrial chemicals has remained solid during the third quarter of 2010. We
have observed improved demand for traditional applications of industrial
chemicals, in particular those for civil works, and as a result volumes improved
approximately 30% over the same period of last year. Prices for industrial
chemicals during the first nine months have declined moderately compared to the
same period of 2009 but should remain relatively stable in the
short-term.
We
anticipate demand for industrial chemicals to continue to improve in the
remaining months of 2010, with total demand reaching levels similar to those
observed pre-crisis. With new initiatives announced for alternative energy
projects that use industrial nitrates to store thermal energy, long-term
prospects for this market continue to present interesting growth opportunities
for the Company, and we expect these developments to significantly impact this
segment from 2012 onwards. As the global economy stabilizes in following months
and years, demand for industrial chemicals should accelerate which in turn
should have a positive impact on this business segment.
Gross margin for the
Industrial Chemicals segment accounted for approximately 11% of SQM’s
consolidated gross margin for the first nine months of 2010.
Other Commodity
Fertilizers
Revenues
from sales of other commodity fertilizers and other income reached US$49.8
million in the first nine months of the year, down from US$59.1 million for the
same period of the previous year.
Company
adopts IFRS
Following
SVS guidelines, SQM has migrated from Chilean GAAP and has adopted International
Financial Reporting Standards as the basis for its accounting principles. This
change is effective as of January 1, 2010. Figures for the first nine months of
2010 and 3Q1O have been prepared under IFRS; figures for the first nine months
of 2009 and 3Q09 have been prepared under IFRS for comparative
purposes.
Administrative
Expenses
Administrative
expenses totaled US$55.5 million (4.2% of revenues) for the first nine months of
2010, compared to the US$53.4 million (5.1% of revenues) recorded during the
same period of 2009.
Net
Financial Expenses
Net
financial expenses for the first nine months of 2010 were US$20.0 million,
compared to the US$13.0 million recorded during the same period of
2009.
Notes:
(2) Gross
margin corresponds to consolidated revenues less total costs, including
depreciation and excluding sales and administration expenses.
A
significant portion of SQM’s costs of goods sold are costs related to common
productive processes (mining, crushing, leaching, etc.) which are distributed
among the different final products. To estimate gross margins by business lines
in both periods covered by this report, the Company employed similar criteria on
the allocation of common costs to the different business areas. This gross
margin distribution should be used only as a general and approximated reference
of the margins by business line.
(3)
Potassium chloride and potassium sulfate will be reported together. This new
classification better reflects the fact that both products are derived from the
same natural resource, that they share a production process and that potassium
is the most relevant driver for costs and pricing. This new classification is
also consistent with market approach to reporting potassium products. SOP sales
include sales of third party products.
SQM is an
integrated producer and distributor of specialty plant nutrients, iodine,
lithium, potassium-related fertilizers and industrial chemicals. Its products
are based on the development of high quality natural resources that allow the
Company to be leader in costs, supported by a specialized international network
with sales in over 100 countries. SQM’s development strategy aims to maintain
and strengthen the Company’s position in each of its businesses.
The
leadership strategy is based on the Company’s competitive advantages and on the
sustainable growth of the different markets in which it participates. SQM’s main
competitive advantages in its different businesses are:
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Low
production costs based on vast and high quality natural
resources.
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Know-how
and its own technological developments in its various production
processes.
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·
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Logistics
infrastructure and high production levels that allow SQM to have low
distribution costs.
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High
market share in all its core
products
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International
sales network with offices in more than 20 countries and sales in over 100
countries.
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Synergies
from the production of multiple products that are obtained from the same
two natural resources.
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Continuous
new product development according to the specific needs of its different
customers.
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·
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Conservative
and solid financial position
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For
further information, contact: Mary Laverty,
56-2-4252074 / mary.laverty@sqm.com
Mark
Fones, 56-2-4252485 / mark.fones@sqm.com
For media
inquiries, contact: Fernanda Guerra, 56-2-4252027 / fernanda.guerra@sqm.com
Statements
in this press release 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 that 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 such forward-looking statements, are
identified in the public filing made with the Securities and Exchange
Commission, and forward-looking statements should be considered in light of
those factors.
|
(US$ Millions)
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For the 3rd Quarter
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For the 9-month period
ended September 30
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2010
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2009
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2010
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2009
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Revenues
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459.5 |
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383.8 |
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1,324.7 |
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1,052.2 |
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|
|
|
|
|
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|
Specialty
Plant Nutrition*
|
|
|
151.5 |
|
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|
141.7 |
|
|
|
452.5 |
|
|
|
400.3 |
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|
Iodine
and Iodine Derivatives
|
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|
91.8 |
|
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46.3 |
|
|
|
241.8 |
|
|
|
140.3 |
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|
Lithium
and Lithium Derivatives
|
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|
36.8 |
|
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31.9 |
|
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|
114.3 |
|
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|
84.4 |
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|
Potassium
Chloride & Potassium Sulfate
|
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|
114.4 |
|
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|
104.3 |
|
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|
356.8 |
|
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|
287.1 |
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|
Industrial
Chemicals
|
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|
41.8 |
|
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|
34.3 |
|
|
|
109.5 |
|
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|
80.9 |
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Other
Income
|
|
|
23.1 |
|
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|
25.3 |
|
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49.8 |
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|
59.1 |
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|
|
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|
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Cost
of Goods Sold
|
|
|
(272.7 |
) |
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|
(216.9 |
) |
|
|
(767.1 |
) |
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|
(543.2 |
) |
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Depreciation
and Amortization
|
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|
(35.6 |
) |
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|
(35.7 |
) |
|
|
(103.3 |
) |
|
|
(101.4 |
) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Gross
Margin
|
|
|
151.2 |
|
|
|
131.1 |
|
|
|
454.4 |
|
|
|
407.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
Expenses
|
|
|
(19.4 |
) |
|
|
(18.2 |
) |
|
|
(55.5 |
) |
|
|
(53.4 |
) |
|
Financial
Expenses
|
|
|
(8.6 |
) |
|
|
(7.4 |
) |
|
|
(26.5 |
) |
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|
(23.1 |
) |
|
Financial
Income
|
|
|
3.6 |
|
|
|
2.2 |
|
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|
6.5 |
|
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|
10.1 |
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Exchange
Difference
|
|
|
(1.5 |
) |
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|
(2.3 |
) |
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|
(6.9 |
) |
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|
(8.5 |
) |
|
Other
|
|
|
(0.4 |
) |
|
|
(1.5 |
) |
|
|
(8.2 |
) |
|
|
(13.5 |
) |
|
|
|
|
|
|
|
|
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|
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|
|
|
|
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Income
Before Taxes
|
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|
124.9 |
|
|
|
103.9 |
|
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|
363.8 |
|
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|
319.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
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|
(28.3 |
) |
|
|
(18.0 |
) |
|
|
(84.4 |
) |
|
|
(60.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Net
Income before minority interest
|
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|
96.6 |
|
|
|
85.9 |
|
|
|
279.4 |
|
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|
258.8 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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Minority
Interest
|
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|
(1.8 |
) |
|
|
(0.7 |
) |
|
|
(3.1 |
) |
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|
0.6 |
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
Net
Income
|
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|
94.8 |
|
|
|
85.2 |
|
|
|
276.3 |
|
|
|
259.4 |
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|
Net Income per Share (US$)
|
|
|
0.36 |
|
|
|
0.32 |
|
|
|
1.05 |
|
|
|
0.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
*Includes
other specialty fertilizers
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(US$ Millions)
|
|
As of Sept. 30
|
|
|
As of Dec. 31
|
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|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
1,855.9 |
|
|
|
1,707.4 |
|
|
Cash
and cash equivalents
|
|
|
615.8 |
|
|
|
530.4 |
|
|
Accounts
receivable (1)
|
|
|
470.9 |
|
|
|
394.5 |
|
|
Inventory
|
|
|
639.5 |
|
|
|
630.8 |
|
|
Others
|
|
|
129.7 |
|
|
|
151.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Investments
in related companies
|
|
|
61.9 |
|
|
|
55.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment
|
|
|
1,394.1 |
|
|
|
1,300.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Other
Non-current Assets
|
|
|
76.4 |
|
|
|
78.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
3,388.3 |
|
|
|
3,141.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
448.6 |
|
|
|
545.0 |
|
|
Short-term
debt
|
|
|
140.7 |
|
|
|
268.9 |
|
|
Others
|
|
|
307.9 |
|
|
|
276.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Long-Term Liabilities
|
|
|
1,265.1 |
|
|
|
1,132.3 |
|
|
Long-term
debt
|
|
|
1,154.7 |
|
|
|
1,024.4 |
|
|
Others
|
|
|
110.4 |
|
|
|
107.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity before Minority Interest
|
|
|
1,627.2 |
|
|
|
1,418.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Minority
Interest
|
|
|
47.4 |
|
|
|
45.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
|
1,674.6 |
|
|
|
1,464.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities & Shareholders' Equity
|
|
|
3,388.3 |
|
|
|
3,141.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
(2)
|
|
|
4.1 |
|
|
|
3.1 |
|
(1)
Accounts receivable + accounts receivable from related co.
(2)
Current assets / current liabilities
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SOCIEDAD
QUIMICA Y MINERA DE CHILE S.A.
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Conf:
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/s/ Ricardo Ramos
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Ricardo
Ramos
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Chief
Financial Officer & Business Development SVP
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Date:
November 23,
2010
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