Profit decline for LKAB after train derailments

Turnover more than halved in the first quarter compared to the same period last year. It totalled SEK 5,471 million this year, compared with SEK 11,955 million last year. Operating profit totalled SEK 1,370 million (5,186). The weaker result meant that cash flow was negative during the period, - SEK 1,464 million (+3,163).

The derailments on the Ore Line caused traffic stoppages for 76 days, which had a major impact on deliveries during the quarter. They amounted to 3.0 million tonnes, compared to 6.7 million tonnes in the same period last year. Production during the quarter was 6.7 million tonnes (6.9).

Limited capacity on the Ore Line has forced LKAB to reduce production by around one million tonnes on an annual basis. If sufficient delivery capacity cannot be secured in the future, there is a risk that pellet plants with associated concentrators and mine production will be forced to close.

“Optimising the use of the Iron Ore Line and structural changes are both necessary in order to realise our expansion plan and the investments ahead of us that will allow us to utilise the huge mineral resources that we have. We are working intensively with the Swedish Transport Administration and the Norwegian railway administration BaneNor so that we can finally generate the necessary cash flows again. SSAB’s recent investment decision to transform its operations in Luleå confirms the need for our transformation in Gällivare and our contribution to a sustainable value chain for the climate,” says Jan Moström, President and CEO.

Lennart Håkansson

editor@northswedenbusiness.com