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Boliden profit up in Q1 on increased sales

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Boliden’s net profit increased 13.3% in the first quarter of 2012 compared with the same period in 2011, thanks to higher sales and rises in base metals prices.

The Swedish miner’s profit came to a total of 1.09 billion SKr ($161 million) for the three months ended March 31, compared with 961 million SKr in the first quarter of 2011.

“Sales increased in comparison with the previous quarter due to higher prices for all metals. The metal premium for copper rose during the quarter,” the company said in its results release for the quarter.

Operating profit was also up, at 1.5 billion SKr, compared with 1.4 billion SKr in the first quarter of 2011, and 1.1 billion SKr in the fourth quarter.

Revenue increased to 10.32 billion SKr in the first three months of 2012, from 10.16 billion SKr in the same period a year previously.

Boliden conceded, however, that demand for metals fell both on a global and a European level during the period.

The company’s net debt also rose year-on-year to 5.15 billion SKr for the period, from 4.11 billion SKr in the same period in 2011.

Zinc concentrate up
Zinc in concentrate production, meanwhile, was up 1% year on year, to 73,790 tonnes for the first quarter of this year, and 15% quarter on quarter.

This was thanks to stable production and higher grades at the Tara mine in Ireland, and higher grades at Garpenberg in Sweden.

“TC/RCs [treatment and refining charges] were stable at low levels on the spot market and were substantially lower than the realised level in the benchmark contracts for 2012,” Boliden said.

“The concentrate surplus in China notwithstanding, TC/RCs on the spot market have continued to remain low. Spot premiums in Europe were stable in comparison with the fourth quarter of 2011.”

Copper slips
Copper in concentrate production, however, slipped 8% year on year, and 6% quarter on quarter, to 18,888 tonnes.

“The reduction in comparison with the previous quarter was due to lower grades in the Boliden Area,” the company said.

“Lower grades at Aitik [in Sweden] and in the Boliden Area in comparison with the previous year resulted in reduced copper production.”

One of the crushers at Aitik underwent an upgrade in February and March in order to improve its performance.

“The upgrade had a negative effect on Boliden Area mines’ operating profit of approximately 50 million SKr during the quarter,” Boliden said.

“The measures implemented are currently being evaluated, and the preliminary results look good with regard to production stability. The other crusher will be upgraded later during the year, and is expected to have only a limited effect on the profit.”

Lead in concentrate production also rose in comparison with quarter on quarter, to 12,629 tonnes, following an increase in volumes at Tara, but remained flat against the first quarter of 2011.

Overall production
Overall zinc production was up 2% year on and 4% quarter on quarter in the first three months of 2012, to 118,345 tonnes.

“The increase in zinc production in comparison with the previous quarter was primarily due to the strike in Finland in October 2011, which reduced production volumes at Kokkola,” Boliden said.

“Odda’s zinc production [in Norway] was affected by a maintenance shutdown brought forward from April to February.”

Overall copper production came to 84,516 tonnes for the three months ended March 31, up 4% year on year, but down 4% quarter on quarter.

The drop compared with the previous quarter was due to quality problems at the Rönnskär cathode production line in Sweden, while the rise year on year came as a result of improved production stability at Harjavalta in Finland.

Lead metal production increased 7% year on year, and 152% quarter, to 5,498 tonnes, thanks to increased processing of lead in concentrate.

In the coming quarter, major maintenance shutdowns are to take place at Harjavalta and Rönnskär, with an expected impact on operating profit for the company’s smelting operations of about 130 million SKr.

Claire Hack
chack@metalbulletin.com
Twitter: @clairehack_mb

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