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

Thank you. Good day, everyone, and welcome to SQM's Third Quarter 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 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 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, 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.

Good morning, and thank you for joining the SQM third quarter earnings conference call. I will start with a brief introduction before I open up the line for questions. On Tuesday evening, we post our result for the first 9 months of 2013. Earnings for this period reached $399.1 million, a decrease from $508.4 million reported for the same period last year. Revenues totaled, $1,710,900,000, a decrease from 6.4% compared to the $1,828,200,000 reported during the 9 months of last year. As you know, our results came in lower for the first 9 months of 2013 than for the first 9 months of 2012. Generally speaking, we saw significantly lower volumes in our chemical business lines such as lithium and iodine, and lower prices in both of the potassium and SPN business lines. We were partially able to offset lower fertilizer prices with increase in sales volume in potassium chloride and potassium nitrate compared to the first 9 months of last year. Additionally, we saw relatively stable iodine prices and increased lithium prices when compared to the same quarter of last year. As mentioned in our press release on Tuesday, there has been a lot of noise, both good and bad, surrounding the potassium chloride market in the last [ph] following the announcement from Uralkali. During the third quarter, we saw prices pressure on the potassium chloride in various geographical markets, and we'll continue to monitor this trend. Our third quarter sales volume were over 50% higher than sales volume seen in the third quarter of 2012. We continue to believe that the market demand is the more important indicator when assessing the potash market. In contrast, the total demand levels in 2014 will surpass this year's level. We remain confident about the long-term prospect for the potassium chloride market.…

Thank you, Patricio. Operator, we are now going to the Q&A session.

[Operator Instructions] And our first question is from Juan Tavarez of Citi.

My first question is regarding your pricing-over-volume strategy. Just wondering if there's a limit in terms of your market share losses in lithium and iodine to where you'll revisit that strategy and maybe we'll start seeing better volume activity with potential pricing pressure more aggressively here going forward? And if you can share your thoughts on that?

Just clearly, there are limits in what can be done in the [indiscernible] supply and demand. And we are always focusing ourselves what measure would be the best result in SQM not just for 1 year, but for the medium term. So clearly, this policy is revised every time, and our completions will be in the best results for SQM. Exactly what we will do or not, I will not make any comment on that, but we are viewing always this policy and we will take the decision that could make the best benefit for SQM.

And just to understand in the lithium segment specifically, I know you noted that you expect the market to grow by around 5%, but what's your expectation in terms of your potential market share in that environment?

Well, we see that we are going downward because the production, there are newcomers in the market, there is more production in China, some newcomers in Canada, Australia. So we see a trend that our participation and relative terms will not increase.

Okay, great. And just my last question on CapEx. You're saying here you're reducing CapEx by essentially $100 million from your initial guidance. Where are you reducing that CapEx specifically? Should we be kind of looking at your future volume growth impact on that? And then second, could you give us a sense how much is your maintenance CapEx?

Well, related to CapEx, of course, due to the situation, we have become much more strict in reviewing what is absolutely necessary and also is some way the trend in the market of cost of CapEx have declined too in Chile because the investment in mining is declining. So in that sense, it is helping us to invest somewhat less. Related to the CapEx, maintenance CapEx, yes, I will give you year's to-date depreciation we have, it's $220 million approximately. That doesn't mean that the CapEx, maintenance CapEx is that. We think it's lower, significantly lower than that.

Our next question is from Cesar Perez-Novoa, BTG Pactual.

Just continuing with the CapEx guidance, I know that you're not providing any specific number here, but would that bring any implication on your iodine and lithium expansions which, if I recall correctly on the second quarter conference call, you mentioned that you were actually discussing this on the board. If you could provide your outlook, that would be very helpful. And I have another question there. If you could also provide some indication on where potassium nitrate prices stand today and what outlook would we see from that division in 2014?

Related to the CapEx in iodine and lithium, the basic things are done. When I say the basic things are done, first environmental approvals are done. Secondly, the major, probably the very important part of that investment is already being done, that is related to water. So that installation already exist. So what you can postpone, let's say, to try more mine with more tracks, et cetera. And clearly, those things have been postponed, but that can be put in place very rapidly, if it is their need in the market. But the basic things of the investment, the more strategic thing of the investment has already been done. But of course, we would not carry on all those things that today, we see situation of oversupply in the market. So those things clearly will be postponed back for us to go to do the volumes we said before, is relatively easy in time and money. In terms of price of potassium nitrate, I will not like to say price of potassium nitrate today are in the range of $970 to $1,000 to metric. This is about $40 less than previous year. And if you compare to what much has current declined, potassium chloride, really we have been able more or less to set away, to maintain relatively our price. On the other hand, we have increased marginal volumes to even that situation.

Okay. And if I may, just a final question here. On your solar salts, you actually mentioned earlier that your volume growth -- you're expecting some pickup in volume growth in 2015. What about next year?

No, not next year because we are, today, negotiation, new contract that we estimate -- just estimates in the range of 100,000 metric ton and then come back in 2015. Hopefully, next year.

The next question is from Ben Isaacson of Scotiabank.

Three questions. My first question is could you describe the cost savings program that you are undertaking with these management consultants? What specifically are you targeting and what kind of costs are we seeing?

Well, we are reducing our -- well, we hire these -- we've done this, it's not the first time. We have done several times in our history, restructuring of company and we're covering our cost and clearly view the situation. We saw that it was an effort that the company should do again. We think that our objective -- we think that we should be in cash savings next year in the range of $50 million.

Okay. That's helpful. My second question is shipping potash to the U.S. market. Are you doing that right now? And can you kind of describe the difference in the netback between Brazil and the U.S.? Obviously, Brazil prices have fallen quite rapidly, but in the U.S., they haven't. And so maybe netbacks are assuming more attractive there.

We sell not too much in the U.S. The main market has been Brazil, but we really sell all around the world. But our main market has become Brazil.

But is the netback there better than the U.S. given the fact that the Brazilian prices have fallen much faster?

Similar. We don't see a significant difference.

Okay. And then my final question is just on iodine. You talked about it's difficult to see how future supply develops over the coming years. Could you talk about what the state of the market is right now? How much excess supply do you see and kind of where are prices right now?

The prices are today in the range of $45 to $60 this moment. We thought at the beginning of this year, demand would grow in the range of 8% to 4%, between 2% and 4%, but it became the lower range of 2%, just 2%. In the case of supply, it's not easy for us to have information because some of the companies are private companies where there's no availability of public information. We have seen that anyhow Algorta is now making publicly their information, that the volume has not increased that much. In the case of Atacama Minerals, we see a stable situation in terms of supply, a little bit increased this year of more production. I don't know exactly how much of that production are selling anyhow. We see Cosayach increasing their volumes and Bullmine too. Exactly the numbers, what -- how much more are producing, it's hard to say.

Our next question is from Fernando Ferreira of Bank of America Merrill Lynch.

Patricio, I wanted to understand a little bit better this -- the volume decline that you saw in lithium beginning of this year and then the improvements that you saw in the third quarter. Was there any specific reason for this improvement in volumes? And also you mentioned that prices were 22% higher during the third quarter. So I wanted to understand a little bit better there on the pricing volume for lithium.

Clearly, we led to the negotiations at the end of last year to try to increase prices for customer and that create difficulties in terms of they accepted those new prices. So that create a -- how to -- well the first semester tendency in having lower volumes. But finally, the demand has been growing and even though there are more suppliers on the other hand, the prices that we try to allocate at the beginning of the year now, also your customer are accepting because of the difference between supply and demand. So we see -- we were able to obtain those bigger volumes already by the third quarter. Clearly, it was not easy to introduce this new price. It was, we felt, the lower volume sales during the first semester because of this main reason.

Okay. And then I just wanted to confirm what's the current share of Brazil in your overall potash sales?

It's between 35% to 40%.

And do you expect to reach near 50% or not?

We see -- we have really not looking for exact number. What we look what is the best economic combination. If it come out to be that 50% is the best, we will be 50%. If it come to be 30%, it will be 30%. So that depends on the opportunities and better return that we can obtain with our product. So the objective is not a real number, it's an economical number.

Perfect. I just had one last question, the follow-up on the CapEx side. Do you think we could see CapEx going closer to maintenance levels over the next 2 years or we should still expect higher than maintenance?

I -- in general, I would say, conceptually, we will go to maintenance CapEx.

Our next question is from Wesley Brooks of Morgan Stanley.

Just one question from me. On iodine, just you talked about prices easing partly because of the higher supply, but also demand being at the low end of the range. Do you think that the lower demand has been due to the high prices in the last year or 2? Or were there other factors that were really impacting the demand?

Our view that we think that high prices has affected it, has to be some explanation.

Okay. And then, so I guess, this comes down to you've been testing the elasticity of demand and those prices were a bit high. So how should we think about this going forward? At what level do you feel demand starts to pickup again to be running at sort of 4% plus?

We have our numbers in our mind, but I apologize that I cannot give it to you because at this same moment, we are negotiating with our clients for the contract for next year. I cannot give you the range of what we think will be the price that could stabilize the situation that you're talking about.

Okay, understood. But then so, I guess, from Q1, we should be able to see whatever the -- or have a good indication of what the new level will be?

Yes. Absolutely.

At this time, this will end our question and answer session. Thank you.

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

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