Boliden’s profit halves as strikes, bad weather weigh

Leaching plant at Rönnskär. (Image courtesy of Boliden.)

Swedish miner Boliden’s first-quarter operating profit fell more than 50% as bad winter weather, lower mining grades and labour strikes weighed on earnings, it said on Tuesday.

Operating profit fell 52% to 1.62 billion Swedish crowns ($148.80 million) from 3.41 billion in the first quarter of 2023 and compared with the 1.55 billion crowns expected by analysts in an LSEG poll.

However, its operating profit excluding the revaluation of process inventory at 1.21 billion crowns missed expectations by 11%, according to JPMorgan.

“Our production during the first quarter was a bit more challenging than ordinary winter months,” said CEO Mikael Staffas in a statement, citing “extremely tough” weather in January and strikes in Finland.

The copper and zinc producer said the now-suspended strikes had hurt its earnings by 400 million crowns in the period, though that was lower than the 500 million crown impact it had flagged in March.

Staffas told investors that the risk of strikes in Finland was not fully over, but estimated a one-off positive effect of 200 million crowns in the second quarter when inventory that was stuck due to the action would be released, if strikes did not pick up again.

Martin Persson, a manager at an equity fund that invests in Swedish large-cap companies at insurer Lansforsakringar, said Boliden’s first-quarter result was somewhat disappointing, but the stock still looked interesting.

“Looking at underlying prices of copper in particular, but also zinc, I think you should be able to have a positive view,” he said, adding that he thought the first quarter was the bottom for profits this year.

Shares in Boliden pared early losses and were down 0.3% during midday trade in Stockholm.

The group, which also mines gold and silver, reiterated its guidance for investments of 15.5 billion crowns during 2024.

A fire at its Ronnskar copper smelter, lower metal prices, falling mining grades and the suspension of production at its Tara zinc mine have hurt Boliden’s earnings over the past quarters.

($1 = 10.8868 Swedish crowns)

(By Greta Rosen Fondahn and Elsa Ohlen; Editing by Sonali Paul, Kirsten Donovan, Louise Heavens and Kim Coghill)


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