LKAB's operating profit halved

This is shown in LKAB's interim report for the second quarter.

Operating profit was SEK 2.3 billion in the second quarter, compared with SEK 5.7 billion in the same period last year. The decline in earnings is due to lower iron ore prices and lower delivery volumes, and higher costs as prices for energy and other input goods increase.

Declining prices and lower volumes caused net sales to fall to SEK 9.4 billion (12.4 last year).

Production decreased to 5.3 million tons (5.7). This was partly due to planned maintenance stops, production disruptions and raw material shortages in Kiruna. Production in Kiruna is still affected by the earthquake in the Kiruna mine in 2020. In addition, transports of raw materials from LKAB's other mines have been hampered by a lack of capacity and maintenance work on the Ore Railway, Malmbanan. This has limited the production possibilities in the Svappavaara mine during the summer.

“There is a risk that delivery capacity for our highly upgraded iron ore products will be limited due to the inadequacies of the Ore Railway, which is already a bottleneck that increases costs and reduces flexibility. This is particularly apparent during the maintenance work that takes place in the summer months and is something that we will unfortunately see worsen over time, if nothing changes,” says Jan Moström, President and CEO LKAB, in a comment on the quarterly report.

Lennart Håkansson

editor@northswedenbusiness.com