Champion Iron (CIA) Q2 2025 earnings summary

Executive summary

• Quarterly production reached 3.2M wmt, with sales of 3.3M dmt and revenue of $351M for Q2 FY2025, despite operational disruptions from forest fires and planned plant shutdowns; sales exceeded production due to resumed rail haulage.

• EBITDA was $74.5M–$75M and EPS was $0.04, both significantly down year-over-year and quarter-over-quarter.

• Net income for Q2 was $19.8M, with a semi-annual dividend of $0.10 per share declared, marking the seventh consecutive payout.

• No significant workplace or environmental incidents occurred, continuing a strong safety and environmental record since 2018.

• The DRPF project advanced on schedule, with $64.7M–$65M invested in the quarter and $218M cumulative to date; work programs to meet 2030 Scope 1 and 2 emission reduction targets and initial Scope 3 assessment were disclosed.

Financial highlights

• Q2 revenues were $351M, down 9% year-over-year and 25% sequentially, with EBITDA of $74.5M and net income of $19.8M.

• Net realized selling price was US$79/dmt, down 21% year-over-year; negative provisional price adjustment of $17M due to iron ore price softening.

• C1 cash cost was $77.2–$77.5/dmt, with AISC at $96.3–$101.4/dmt; cash operating margin dropped to $6.1/dmt from $35.3/dmt year-over-year.

• Cash balance decreased to $183.8M, mainly due to dividend payment and capex; available liquidity at quarter-end was $759.3M.

• Working capital was $277.1M, and total liquidity (cash, working capital, credit) exceeded $1.0B.

Outlook and guidance

• DRPF project remains on track for H2 2025 commissioning, with total estimated capex of $470.7M and $218.4M invested to date.

• Additional railcars and mining equipment expected to support future production and sales growth; 400 new railcars ordered, with delivery expected in coming months.

• The company is well positioned to fund all cash requirements for the next 12 months from existing cash, forecasted operating cash flows, and undrawn credit facilities.

• Ongoing evaluation of growth projects, including Bloom Lake expansion and the Kami project, with focus on environmental studies and optimization.

• Continued focus on decarbonization and emission reduction targets, aiming for carbon neutrality by 2050.