LKAB (LKAB) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating profit rose to MSEK 2,666 from MSEK 2,257 year-over-year, driven by higher delivery volumes and insurance payouts for prior derailments.

• Net sales for Q2 increased to MSEK 9,851 (9,350), mainly due to higher deliveries and a weaker SEK.

• First half 2024 net sales and operating profit declined versus prior year due to missed deliveries early in the year.

• Fatal accident occurred in the Kiruna mine during the quarter, prompting enhanced safety measures.

• LKAB continues its transformation towards fossil-free sponge iron, facing challenges in permitting and infrastructure.

Financial highlights

• Q2 2024 net sales: MSEK 9,851 (Q2 2023: 9,350); H1 2024: MSEK 15,322 (H1 2023: 21,306).

• Q2 2024 operating profit: MSEK 2,666 (2,257); H1 2024: MSEK 4,036 (7,443).

• Q2 2024 net income: MSEK 2,845 (3,048); H1 2024: MSEK 4,588 (7,587).

• Q2 2024 operating cash flow: MSEK 1,505 (3,519); H1 2024: MSEK 41 (6,682).

• Q2 2024 net financial income: MSEK 800 (1,345), mainly due to lower SSAB dividend.

Outlook and guidance

• Production in H2 2024 will be limited by facility deficiencies found during maintenance, with one Kiruna plant closed for several months.

• Ongoing risk of further production cutbacks if Iron Ore Line delivery capacity is not improved.

• Demand for high-grade iron ore remains solid, but global economic uncertainty persists.

• Transformation to fossil-free sponge iron continues, with permitting and infrastructure as key challenges.