Hello, and welcome to the SQM Third Quarter 2017 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I now would hand the call over to Gerardo Illanes. Please go ahead, sir. .

Thank you. Good morning, everyone, and welcome to SQM's Third Quarter 2017 Earnings Conference Call. For your information, this conference call will be recorded and is being webcast live. You may access the webcast later on at our website, www.sqm.com. .

Joining me today as speaker is Patricio de Solminihac, Chief Executive Officer..

Before we begin, let me remind you that statements in this conference concerning the company's business outlook, future economic performance, 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 law.

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 filings made with the Securities and Exchange Commission, and forward-looking statements should be considered in light of those factors..

I will now leave you with our Chief Executive Officer, Patricio de Solminihac, for brief comments before we go to Q&A. .

Thank you, Gerardo. Good morning, and thank you for joining SQM's Third Quarter 2017 Earnings Conference Call. .

Last night, we post our results for the first 9 months of the year. Our net income reached $317.2 million, an increase of over 60% when compared to the first 9 months of last year. .

higher sales volume in potassium nitrate, higher prices in lithium market and record sales volumes in the iodine market. These numbers were supported by the fact that we once again were able to prove our flexibility and ability to respond to market need and changes. .

Our operational teams in both the Salar del Carmen and Nueva Victoria were able to ramp up production in order to accommodate market need, specifically for iodine, potassium nitrate and lithium..

In the lithium market, our sales volume exceed 12,700 metric ton during the third quarter. This volume, coupled with the average price of over $13,000 per ton, led to a contribution to gross profit from lithium totaling 61%.

We are still on target to sell around 50,000 tons of lithium this year and believe average prices during the second half of the year will exceed lithium prices seen during the first half of 2017..

In the specialty plant nutrition business line, our nitrogen expansion project continued to move forward and with good reasons. Our sales volume were over 9% higher during the first 9 months of the year compared to the same period last year as a result of a strong demand growth along with a decreased supply from our competitor.

We will sure -- we will ensure that we are fully available to meet the growing demand of the future..

Our 2017 capital expenditure should total close to $170 million this year. In Argentina, the project Minera Exar will invest around $60 million in 2017, and of that, $30 million will come from us..

Our cash generation capacity has allowed us to report a very strong balance sheet in this third quarter with a net financial debt-to-EBITDA of less than 0.3..

We announced last night that we will pay a dividend equivalent of 100% of the net income of the results of the third quarter. This will be paid on December 14, 2017..

I thank you for joining the call today, and we'll now open up the line for questions. .

[Operator Instructions] And the first question comes from Joel Judd (sic) [ Jackson ] with BMO. .

This is Fahad on for Joel Jackson. I had 2 questions, so I'll ask them one by one. The first question, can you talk a bit about what you see lithium prices doing next year? One of your main competitors is suggesting that prices -- lithium prices will increase mid to high single digits next year.

Does SQM share this view? And if you could break it out between first half and second half, that would be great. .

Thank you, Joel. Regarding the lithium price on the lithium market in general first, we see that the market continue to be tight during the fourth quarter, so we believe that the first part of next year, that will be the same case. So we expect to continue to see high prices that could be some higher than the -- this last part of this year.

But depending on how the new supply came into the market, we believe that there is a possibility that market will start to balance toward the second half of the year. .

Okay. Great.

And my second question, is there any possibility that the mediation or resolution with Corfo can get resolved before the new Chilean government comes in? And what's the best case in terms of a resolution to -- due to some of the quota issues and the mine life in terms of timing? What would be the best case scenario?.

Regarding our arbitration with Corfo, unfortunately, we were not able to get to an agreement in the [ consultation ] process that we ended last month.

I think and I continue to be -- to be sometime optimistic that we need to find a solution because the incentives are very well aligned for the country for Corfo and for ourselves to really find a solution. So I think that the solution need to be find.

If we don't find a solution, the arbitration will continue and we will have a resolution from the arbitrator, which we feel confident that we have the argument and we will be favored with a positive resolution for us. But that could take all next year.

So what we think is that from our part, we are available to really try to find and negotiate a solution with Corfo before that. .

And the next question comes from Oliver Rowe with Scotiabank. .

I have 2 as well, so I'll go one by one also. So first off, you're a major player in most of the industries you participate in. And when you lost market share in iodine, we saw a volume overprice approach, and now you've regained that market share. So it seems like from a strategic perspective, maintaining market share is quite important for SQM.

Does that also apply for lithium? Do you want to keep your historical 25% share of the lithium market? I think that would mean in 2025, you'd need something like 200,000 metric tons. .

Well, the answer is, first, that given the growth that we are seeing in the lithium market that we think and believe that, that growth will continue for the years to come, of course, there is a great opportunity for our company, given our knowledge and our know-how, not only technically but also commercially and from product development.

So we think that we have a great opportunity to grow with the market. If that means that we will maintain the market share or we will increase it or diminish a little bit, that will depend on what the market conditions are regarding the demand.

We are, of course, trying to grow, not only in Chile where we need to solve our problem with Corfo in order to grow more, and we think that, that should be within our objectives. And second, we need -- given that growth, and we need also a geographic [ maturation ] diversification from a production point of view.

That's why we are developing the project in Argentina as well as in Australia. And then with all those volumes, we think that we could at least maintain our market share. .

[Operator Instructions] We have a question from Pedro Ferreira with Santander. .

So I was wondering if whether you're also looking for a strategy of volumes over prices in the SPN segment. We've seen that this third quarter, the prices are going down since the first quarter 2017.

So I was just wondering, does this price pressure is to keep going on? Or do you forecast the prices to go up in the future?.

Thank you, Pedro. Basically, in SPN, the potassium nitrate-based products, we want to make sure that we supply enough country for the products. Even though they are specialty fertilizers, they are related to some extent with the prices of potash.

So what we want is to, of course, get the premiums that we get from potash, but we don't want to be too far away from that relation.

So given that the potassium chloride prices continue to be where they are today, we think that we need to continue supplying volumes so the price do not exceed that much that relation in order to continue to incentive the growth in the market. .

And as there are no more questions, I would like to return the call to Gerardo Illanes for any closing comments. .

Thank you all very much for joining us today, and we hope to have you with us in our next conference call. Goodbye, everyone. .

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..