LKAB (LKAB) investor relations material

Executive summary

• Q3 net sales rose to MSEK 8,051 from 7,578; operating profit was MSEK 1,595 versus a loss of 2,423, mainly reflecting lower urban-transformation costs and higher deliveries.

• Deliveries reached 6.8 Mt, up from 6.2 Mt, while production was 6.7 Mt versus 6.9 Mt; flexible routing helped manage Hormuz disruptions.

• Nine-month operating profit improved to MSEK 2,518 from 2,288, while operating cash flow fell to MSEK -232 from 3,246, chiefly due to working-capital outflows.

Financial highlights

• Q3 net sales were MSEK 8,051 (7,578); gross profit was MSEK 2,081 versus a loss of 1,855, and net income was MSEK 934 versus a loss of 1,850.

• Q3 operating profit was MSEK 1,595 versus a loss of 2,423; the prior-year result included MSEK 4,469 in urban-transformation provision costs.

• 9M net sales declined to MSEK 23,145 from 25,020; operating profit increased to MSEK 2,518 from 2,288, while net income was MSEK 2,358 versus 2,450.

• Q3 net financial expense was MSEK 417 versus income of 102, mainly due to lower investment returns amid higher interest rates and increased urban-transformation interest expense.

Outlook and guidance

• Geopolitical and trade-policy uncertainty clouds market visibility; prolonged Strait of Hormuz disruptions could affect deliveries despite successful customer reallocations and alternative routes so far.

• Iron ore prices remained under pressure, while pellet premiums strengthened; higher oil prices, altered routes and vessel demand have increased freight costs.

• Competitiveness initiatives continue, but permitting, energy supply, Iron Ore Line capacity and an uncertain operating environment remain challenges to long-term development.