Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boliden AB (BLIDF, Financial) reported an operating profit just shy of SEK3 billion, marking a significant improvement compared to previous periods.
- The company achieved record mill production in Garpenberg for the second consecutive quarter, highlighting strong operational performance.
- Key projects, including the Aitik project and Kristineberg-Rävliden, are progressing well, with Aitik nearing completion and Kristineberg-Rävliden set for commissioning in early 2025.
- The restart of the Tara mine is on track, with production ramping up and full production expected in Q1 2025.
- Base metal prices have improved compared to last year, and precious metal prices are at an all-time high, positively impacting financial performance.
Negative Points
- The company's cash flow remains negative at about SEK0.5 billion due to high investment rates and working capital ties.
- CO2 emissions have increased compared to last year, primarily due to the Aitik project, which has led to higher diesel consumption.
- The LTI frequency remains a concern, with a relatively weak safety performance in the quarter.
- Sick leave levels are considered too high, with difficulties in reducing them to pre-COVID levels.
- The environmental permit is currently a bottleneck for production at Garpenberg, potentially affecting Q4 output negatively.
Q & A Highlights
Q: Can you elaborate on the grade guidance for Aitik in 2025, and what can we expect beyond that year?
A: Mikael Staffas, President and CEO, explained that 2025 will be the lowest year for grades at Aitik, with a slight pickup expected in 2026. The average grade in the R&R statement is 0.23, and they expect to return to and exceed this level eventually.
Q: What is the impact of ramping up Liikavaara and the construction of improved dam facilities at Aitik?
A: Mikael Staffas noted that the impact is indirect, with some competition for trucking capacity negatively affecting the mine. The completion of the dam project should positively impact mine production on the margin.
Q: Regarding the Garpenberg mine, what is the timeline for the new permit, and what investments are required?
A: Mikael Staffas stated that they aim to submit the application within the quarter and expect to receive the permit in 2025, which should not limit production. The permit is an alteration of the existing one, and no significant investments are planned until the permit is secured.
Q: Can you provide guidance on the Tara mine's throughput and C1 cash cost for 2025?
A: Mikael Staffas confirmed that Tara's throughput is expected to be 1.8 million tonnes at 5.5% zinc, with a C1 cash cost of $1.
Q: What are your expectations for the Odda expansion's earnings contribution in 2025?
A: Mikael Staffas indicated that the full-year effect of EUR150 million remains unchanged, though the exact ramp-up curve is still unclear.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
