Rana Gruber (RANA) Q3 & CMD 2024 earnings summary

Executive summary

• Achieved record magnetite production and sales in Q3 2024, with total production of 478,000 mt and revenues of NOK 389 million, despite lower hematite prices due to global market conditions.

• Transitioning to high-grade iron ore production to support steel industry decarbonization and capture value from green steel trends, targeting 67% Fe by decade's end.

• Maintained a strong safety record with no production-related injuries and among the industry's lowest carbon emissions at 7.17 kg CO2e per ton.

• Continued focus on shareholder returns, distributing NOK 1.45 per share in dividends, totaling over NOK 1.3 billion since 2021.

• Positioned as a key supplier to European steel mills, leveraging proximity, low emissions, and a 15-year offtake agreement with Cargill.

Financial highlights

• Q3 2024 revenue was NOK 388.6 million, down 17% year-over-year, mainly due to lower volumes and prices, but offset by record magnetite production and sales.

• Adjusted EPS for Q3 2024 was NOK 2.41; quarterly dividend set at NOK 1.45 per share, equaling 60% of adjusted net profit.

• Cash cost per mt produced was NOK 584 (USD 56), down from Q2 but up from last year due to higher energy and inflation pressures.

• EBITDA for Q3 2024 was NOK 124.8 million, with a margin of 32.1%, down from 53.4% in Q3 2023.

• Free cash flow for the quarter was NOK 62 million, with cash and equivalents at NOK 57 million as of September 30, 2024.

Outlook and guidance

• Targeting hematite concentrate at 65% Fe by H1 2025, with first Fe65 sales expected during 2025.

• Magnetite production expected to reach 175,000 mt in 2025 and over 200,000 mt in 2026, nearly double last year's output.

• Maintaining a cash cost target of USD 50–55/mt, supported by ongoing cost optimization and efficiency initiatives.

• CapEx for 2024 is NOK 240 million, focused on mine development, quality upgrades, and decarbonization; annual CapEx of NOK 210–240 million planned through 2026.

• Confident in maintaining production capacity of 1.85 million tons, with Stensundtjern open pit supplementing output as Kvannevann depletes.