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LKAB Interim Report for April–June 2020 Quarter

Steel News - Published on Fri, 14 Aug 2020

Image Source: LKAB
During the second quarter LKAB’s production and delivery volumes were stable. Operating profit was negatively impacted, however, mainly as a result of a substantially lower price for highly upgraded iron ore products. Net sales for the second quarter amounted to MSEK 7,456 (9,233) and operating profit decreased to MSEK 1,883 (4,109), which is primarily a result of a market in which both the global spot price for iron ore and the price premium for highly upgraded iron ore products was lower than in the same period the previous year. Slightly lower delivery volumes as well as increased costs for urban transformation provisions also had a negative effect. Operating cash flow was MSEK 972 (1,216).

The production in the second quarter was slightly lower when compared year on year at 6.0 (6.2) Mt, being impacted by measures and new procedures associated with Covid-19. Deliveries of 6.6 (6.7) Mt were affected by the five-day long stoppage on the Ore Railway at the end of the quarter, among other things. For the first half of the year, both production of 13.5 (12.8) Mt and deliveries of 13.9 (12.8) Mt were higher than in the same period last year.

The average spot price for iron ore was USD 93 (100)/tonne. Quoted pellet premiums remained at a substantially lower level when compared year on year. During the quarter pellets accounted for 83 (84) percent of LKAB’s deliveries of highly upgraded iron ore products.

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Posted By : Yogender Pancholi on Fri, 14 Aug 2020
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