Good day, and welcome to the SQM Second Quarter 2013 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mark Fones, VP of Finance and Investor Relations. Please go ahead.

Good day, everyone, and welcome to SQM's first half 2013 Earnings Conference Call. For your information, this conference call will be recorded and is being webcast live. You may access the webcast later on, on our website, www.sqm.com. Joining me today as speakers are Patricio Contesse, CEO; Patricio de Solminihac, Executive Vice President and Chief Operating Officer; and Ricardo Ramos, CFO. Before we begin, let me remind you that statements in this conference 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, and 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 I now leave you with our CEO, Patricio Contesse, for brief comments before we move to Q&A.

[Audio Gap] for joining the SQM second quarter earnings conference call. I will start with a brief introduction before I open up the lines for questions. On Tuesday evening, we post our result for the first 6 months of 2013. Earnings for this period reached $259.2 million, a decrease from the $342.2 million reported for the same period last year. Revenues total $1,189.9 million, a decrease of 1.9% compared to the 1.2 -- $1,213 million reported during the first half of last year. As you know, our results came in lower for the first half of 2013 than for the first half of 2012. Generally speaking, fertilizer prices declined, and volumes in our chemical business line decreased when compared to last year. We partially able -- we were partially able to offset the lower fertilizer price with increased volumes. In respect to our chemical business line, iodine prices were relatively stable, and we enjoy higher lithium prices when compared to the same period of last year. Following the recognition of the potassium market from Uralkali, which could impact world fertilizer prices, we remain optimistic about the world demand and expect it to increase in 2013 over 2012. Additionally, we still expect our sales volume to be about 15% to 20% higher than sales volume seen in 2012. Sales volumes were higher during the first half of the year, up 13% compared to the first half of last year. Prices were lower when compared to the same period of 2012, although there is no significant direct competition between the potassium nitrate and the potassium chloride market. Therefore, the lower price of potash we expect will have a moderate impact in the price scenario in the potassium nitrate market this year. We expect sales volume in our SPN business line for the…

Thank you, Patricio. Operator, you may go now to the Q&A session.

[Operator Instructions] Our first question will come from Ben Isaacson of Scotiabank.

I have 3 questions. My first question is on your CapEx. You're lowering CapEx by $100 million, and you anticipate lower CapEx in 2014. Where is that $100 million coming from? Is that coming from lithium, potash, iodine expansion? Can you provide some more color and also some more color as to what you're anticipating for lower CapEx next year?

Well, related with the $100 million less this year, it's mainly, mainly in related to maintenance CapEx. And we have focused on maintenance and reduced it significantly. And we have containing most of our growth -- CapEx growth. And related to 2014, we are still studying. We know already they will be significantly higher, and we will be able -- I'm sorry, excuse me, significantly lower but more accurate, we will have that inform at the end of the year when the final CapEx will be approved by our -- the board formally, but clearly will be significant loss. But exactly, we're not in condition today to formally or officially publicly say.

My second question is on the potassium nitrate market. Can you provide an understanding, when the potash or the MOP price goes down by $10 or $20, how does that impact your cost for MOP? And how do you see the relationship in terms of the price that you're able to get for MOP? Do you see that as a fixed percentage or a fixed dollar premium to the MOP market? Can you explain how these parts work?

Well, first of all, there are -- potassium chloride, even -- and potassium nitrate, even though are both potash products, but they are not in -- absolutely relate, because they go to complete different markets. And the decline that we have been seeing in the potash in the last times, last year or more, has not really have same proportional impact in the potassium nitrate. Even beyond that, because this market or this -- it's a market that need the potassium free of chloride today is quite tight between demand and supply. So that says or that's why we said in this analysis that we give you that for this year, with the -- what we see in the market related with demand and supply it is very tight, but we don't see a movement in the potassium nitrate in prices for this year.

So does that mean that you expect margins to expand as your potassium chloride costs go down?

Well, the end, if you consolidate, we -- when you say -- you can put in here or there the lower costs, but if you have a lower cost than the margin in potash, chloride will be lower. As far as consolidating related to having the lower-cost potassium nitrate can increase the margin. But on the other hand, you will see a decrease in the margin of potassium chloride.

Okay, that's helpful. And just my very last question. Obviously, your stock is down significantly year-to-date and kind of much more than your fertilizer or industrial chemical peers. I have a lot of value investors that are looking at SQM on a 3- or 5-year basis. What do you see as kind of the catalyst to kind of turn around your stock? Or kind how do we give confidence to current and prospective shareholders?

[indiscernible] say that it's hard to say at this stage with all the difficulties in potash to have any statement in that area. So I'm not in condition to give in relation to potash. The only thing that we can say there, we are increasing our volumes, and also our costs are going to be reduced. So in that area, we will have more competitiveness in the potash business because our cost and quality are improving on a day-to-day. And also, the growth will be in the range of 15% grower in production, 15% to 20%, in that range. So with that in one hand, but exactly, the prices where they will move the next 3, 4 or 5 years, I just can't say any comment on that because I don't have the crystal ball. But in terms of our costs, then the level of production will be high. In terms of the iodine, I think that the market is growing. We will see opportunities, and we will act aggressively in the market as SQM, in related to our position. And also, we are improving our cost in that area significantly. Then also, as you -- as I mentioned and you put the question, that we have a very stable product in this potassium nitrate. And potassium nitrate -- and we are not decreasing the prices even though what's going on in the potash business for this year. So that means it's much more stable, and that means that it's much less volatile. And that is -- has been shown historically and now even more profound. Also, we see that market growing. Last -- next year, we should be selling in the range of 40,000, 50,000 metric tons more of potassium nitrate. And that is the forecast, growing per year and the next years to come, in a very stable product and related with demand flowing and prices much more -- much less volatile than normal commodity fertilizers. Also, even though the solar salts are -- this year, are going dramatically down, and next year, our focus is the same. We are seeing already a comeback and gradually in the market that permit us to say that 2015 onwards, we are -- this market is starting again. And that is relevant and would be relevant for SQM. So -- and also, I mean, the competitive in terms of costs of SQM by 2000 -- in the next 5 year will change also dramatically.

The next question is from Wesley Brooks of Morgan Stanley.

So first question on iodine. You talked about prices being down only a little bit, 3%. But can you just give us some more color? Was that broad-based or was it just in certain sort of products? And what's really causing that? Given that you've been cutting back volumes, why should prices be easing a little bit? And what should we think about going forward?

Well, as we say that -- as we said in the conference, my statements before that the main situation of volumes has -- coming down because -- affects the supply of the Chilean produce. And exactly why we're going to do that or not is we don't want to make this as public because it will go against us. But I will say that we would continue to review, as I said in the statement, our business strategy. And we keep all things open that would permit us, not only in the short term but in the medium, long term, to have a better value for the stock of SQM. So that means that we are starting different situations, and what will be done or not, it will be according to our estimate, what will be better, not only for the short term but the medium, long term for SQM's shareholders.

Okay. And then on sort of more just the technical, on potash, your average prices in the first half were $465 a ton, which looks pretty good relative to other global prices. Obviously, you've got some SOP in there. But just to give us a feel for how prices move, can you give us some idea of where prices in Q1 versus Q2 were? How much lower they were?

Well, how much they will be is hard to tell. But at this moment, we're moving between 5% to 10% lower.

So in Q -- sorry, in Q2, they were 5% lower than Q1?

Your point.

No, in Q2, was quite similar to what you have already here. The plant will be in the second semester. Exactly, really, we don't know.

Okay. And then the last question just on lithium. I mean, a -- presumably, you had pretty good visibility on Galaxy ramping up. What's really changed that you've had to lower your guidance? Because the idea was they're going to ramp up 17,000 tons plant. So how come you've gone from 5% lower to 10% to 15% lower on your volume guidance? Are they just doing better than you expected?

This is Patricio de Solminihac. Regarding lithium, you are right. Galaxy originally had a much more problem because of the action and really been able to ramp up their production. But I know they have been able to do so, and they are producing more than we expected. But also, given the acquisition of Tianqi that bought Talison, also, there have been also more production from other Chinese producers based on the -- on Talison espousium [ph] . So that is different of what we originally expected, and then we continue to monitor exactly how the market will evolve. However, you have to understand that we have been able to have better prices. That also we have in -- reflecting that in our Q2.

[Operator Instructions] So at this time, I'm not showing any further questions.

Okay. Thank you, all, very much for joining us today. And we hope to have you -- be with us in the next conference call. Goodbye, everyone, and thank you.

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