Lower turnover and poorer results for LKAB

This is shown in the company's year-end report presented on Monday.

In the last quarter, sales increased to SEK 10.8 billion (9.9) and operating profit was SEK 3.8 billion (2.7). The main reason is higher iron ore prices, higher delivery volumes and a higher share of pellets, although this was offset by lower pellet premiums.

However, the full year 2023 was worse than the previous year. Net sales were SEK 42.9 billion (46.5) and operating profit was SEK 16.2 billion (20.8). The operating margin is close to 40 percent.

Operating profit was affected by higher costs due to longer planned maintenance stops, measures to secure production capacity and higher input costs. Lower pellet premiums and lower delivery volumes were partly offset by a weaker Swedish krona.

Production in 2023 was 26.2 million tons (25.0). For the full year, deliveries decreased due to raw material shortages and production disruptions in the first half of the year, and capacity limitations on the Ore Line. The delivery volume was therefore 25.3 million tons (25.8).

In December, an ore train bound for Narvik derailed at Vassijaure near the Norwegian border. This resulted in 15 kilometers of torn rails and a halt to all traffic. Although it is hoped that traffic on the Ore Raillway Malmbanan will resume during the second half of February, the stoppage has lasted for more than two months. It has not affected LKAB's deliveries from Narvik in December, but the impact is expected to be greater in the first quarter of this year. In total, LKAB has not been able to deliver ore worth SEK 5 billion in two months.

“We can no longer shut our eyes to how critical to society and how sensitive the infrastructure of the Ore Railway is, and the value that is thus at stake. We are ending the year with relatively high production and the expansion of the Ore Railway is crucial both for the current volumes and for future production increases. At this moment, however, we are focusing on how capacity can be ensured in the near future,” says Jan Moström, President and CEO of LKAB.

The Board proposes to the Annual General Meeting that the dividend should amount to half the profit for the year, i.e. SEK 7.6 billion (7.5).

Lennart Håkansson

editor@northswedenbusiness.com