LKAB has grown worried by COVID-19 pandemic-induced market fluctuations and intends to adjust to the new financial environment, the company said in its interim report.
The iron ore miner’s production and delivery results were promising last quarter, despite challenges like COVID-19 and the earthquake at its Kiruna mine in May.
Production at Kiruna is presently running at 70pc, but the company stated it’s difficult to project when mining output will return to normal levels. In order to minimise the impact of reduced production at the Kiruna mine, LKAB is using other mines to compensate for the shortfall.
Through the first six months of the year, iron ore production rose to 13.5mt from 12.8mt during the same period last year. However, production Q2 2020 was slightly lower at 6mt than it was during the second quarter of 2019 when output reached 6.2mt.
Deliveries in the first half of the year increased to 13.9mt from 12.8mt in H1 2019, while deliveries declined to 6.6mt in Q2 2020 from 6.7mt in Q2 2019.
The firm’s net sales dropped to SEK7.45bn ($863mn) in the second quarter of the year from SEK9.23bn during the same quarter in 2019. Its operating profit also decreased to SEK1.88bn in Q2 2020 from SEK4.1bn in the second quarter of 2019.
1 SEK = $0.12