Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boliden AB (BLIDF, Financial) reported a significant one-off insurance booking of SEK2.4 billion related to a venture fire.
- The company had a very good production quarter in the smelters, with maintenance activities being on time and on budget.
- Garpenberg achieved record throughput production.
- The Odda expansion project is progressing well, with infrastructure in place and commissioning of different units expected later this year.
- Boliden AB (BLIDF) reported an operating profit of SEK4 billion, excluding process inventory revaluation, with a positive cash flow of SEK400 million despite intensive investments.
Negative Points
- Low mill volumes in Aitik due to issues with the ramp-up of the Liikavaara satellite pit and equipment availability.
- The company faced challenges with last-time injury and safety, indicating a negative trend in this area.
- CO2 emissions were relatively high in the quarter due to diesel usage in the IT projects, which did not contribute to production.
- Sick leave remains elevated compared to pre-COVID levels.
- Nickel prices have been volatile, with a negative impact on total profit due to lower prices towards the end of the quarter.
Q & A Highlights
Q: Are you actively looking at opportunities to add additional copper or zinc mining exposure? And do you think you've got the balance sheet to do deals at the moment?
A: M&A has always been an option for us. It isn't necessary for our strategy to work, and we are not too small in any sense. We are confident in our current position but remain open to opportunities.
Q: What do you think is a realistic annual average level for Aitik, and what will get you operating at that level consistently?
A: Our ambition is to reach 45 million tonnes. We have faced challenges, including a SEK5 billion project and ramping up the autonomous hauling system. We expect improvements as we move forward, particularly by 2025.
Q: Have you received any more clarity on the rest of the insurance payment timeline?
A: We expect about SEK200 million per quarter for Q3 and Q4 of this year, totaling SEK1 billion for the full year. The remainder will be distributed between the quarters next year, depending on project spend.
Q: Can you talk about the ramp-up issues at Liikavaara and the lower equipment availability during the quarter?
A: We faced rock mechanical issues and teething problems with the autonomous trucks. These should be resolved in the coming months, but some issues may affect Q3. Competition for resources between operations and the project should alleviate as the project finishes towards the end of the year.
Q: Do you have good line of sight on concentrates availability for the Odda smelter expansion?
A: We have a very good and balanced book for Odda concentrates going forward. There are no major challenges, although balancing the ramp-up curve is always a bit of a challenge.
Q: Will the insurance income form the basis of the dividend calculation for the full year?
A: According to our dividend policy, the proceeds will be included in the bottom line and thus form the basis for paying dividends. We do not have any plans to deviate from this policy.
Q: What kind of nickel price would you need to take the investment decision for pushback 5 in Kevitsa?
A: The nickel price is crucial for the pushback 5 decision. We will use long-term prices in our calculations and may adjust them before making a decision. We aim to postpone the decision if possible and work on the environmental permit in parallel.
Q: Can you explain the impact of lower treatment charges on the smelters' performance?
A: We had a SEK100 million negative impact on treatment charges compared to last quarter, which is normal. This reflects the full quarter effect of lower benchmark TCs and metal premiums.
Q: What is the status of the secondary insurance claim for Rönnskär?
A: Discussions are ongoing with the secondary insurer. We expect to receive about SEK200 million per quarter for Q3 and Q4 of this year, with the remainder distributed between the quarters next year. The secondary insurer's obligations kick in once the primary insurance is fully used.
Q: When do you expect Tara to go above breakeven?
A: We expect Tara to go above breakeven in Q1 of next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
