Swedish-based iron ore producer LKAB has issued its financial results for the second quarter and first half of the current year.
In the second quarter, the company registered a net loss of SEK 416 million ($48.83 million), compared to a net loss of SEK 247 million in the second quarter of 2014. Sales revenues in the given quarter decreased by 28 percent year on year to SEK 3.56 billion ($416.7 million), while the company recorded an operating loss of SEK 228 million ($26.76 million) compared to an operating loss of SEK 417 million in the corresponding quarter of the previous year.
In the given quarter, company’s iron ore output amounted to 5.8 million mt, decreasing by 3.33 percent year on year. In the same quarter, the company's shipments decreased by 11.6 percent to 5.3 million mt. Besides the shortage of crude ore, deliveries were affected by an extended maintenance stoppage in the Port of Narvik and delays in deliveries to customers in the MENA region.
In the first half, the net profit of the company was SEK 190 million ($22.3 million), decreasing by 85.8 percent year on year. Sales revenues in the given period decreased by 29.35 percent year on year to SEK 7.74 billion ($908.6 million), while the company's operating profit amounted to SEK 147 million ($17.25 million), down 90.39 compared to the corresponding period of the previous year.
In the first six months of this year, the iron ore output of LKAB amounted to 12 million mt, decreasing by 4.76 percent year on year. In the same period, the company's shipments decreased by 11.1 percent to 11.2 million mt, while its iron ore stocks amounted to 1.8 million mt at the end of the period. Uncertainty about the production capacity of mines resulted in more cautious delivery planning in the first half of the year in order to ensure reliable deliveries to customers.
LKAB stated that low iron ore prices and fewer deliveries are putting pressure on the company’s profitability. Meanwhile, efforts to reduce costs are having a positive effect.