Swedish-based iron ore producer LKAB has issued its financial results for the third quarter and first nine months of the current year.
In the third quarter, the company registered a net profit of SEK 1.43 billion ($171.25 million), compared to a net profit of SEK 509 million in the third quarter of 2016. Sales revenues in the given quarter increased by 40 percent year on year to SEK 5.99 billion ($715.31 million), mainly due to higher market prices for highly upgraded iron ore products and a better result from price and currency hedging, while the company recorded an operating profit of SEK 1.81 billion ($216.5 million) compared to an operating profit of SEK 273 million in the corresponding quarter of the previous year.
In the third quarter this year, the company’s iron ore output amounted to 6.5 million mt, decreasing by 4.4 percent year on year, while its iron ore shipments fell by 1.4 percent year on year to 7.1 million mt.
In the first nine months of the year, the net profit of the company was SEK 3.82 billion ($456.78 million), compared to a net profit of SEK 628 million in the same period of the previous year. Sales revenues in the given period rose by 46 percent year on year to SEK 17.82 billion ($2.05 billion), while the company registered an operating profit of SEK 4.69 billion ($560.04 million), compared to the operating profit of SEK 167 million in the corresponding period of the previous year, mainly due to higher market prices for highly upgraded iron ore products.
Meanwhile, in the January-September period, the iron ore output of LKAB amounted to 20 million mt, rising by 1.5 percent, while the company's iron ore shipments increased by one percent to 20.3 million mt, both year on year.
LKAB assesses that the oversupply situation within iron ore fines will continue, which is putting pressure on iron ore prices; at the same time, the premium for highly upgraded iron ore products is expected to remain high. Demand for LKAB’s pellets continues to be strong and the strategy of maximizing pellet production remains in place.