Interim Report January June 2010

Transcription

1 Interim Report January June 21 Lennart Evrell President & CEO Johan Fant CFO

2 Second quarter 21 The Market Concerns over China price volatility Improving demand Metal prices down gold, silver up Tight concentrate market Boliden Revenues MSEK 8,98 (6,439) EBIT ex PIR* MSEK 1,13 (477) Operating profit MSEK 1,123 (654) Cash Flow MSEK 21 (-97) Aitik expansion in production 1-year maintenance at Rönnskär Long term financing in place *: PIR=Process Inventory Revaluation IR 2

3 Group EBIT Development MSEK 2 Quarterly EBIT Quarterly EBIT excl PIR* Q37 Q47 Q18 Q28 Q38 Q48 Q19 Q29 Q39 Q49 Q11 Q21-5 *Process Inventory Revaluation IR 3

4 The Market

5 Industrial production Higher industrial activity - improved base metals demand High growth in all regions but manufacturing below peak Year over year % Manufacturing IP growth (%) Japan China-gross value USA EU Source: Reuters Datastream IR 5

6 Automotive Sales and production increasing from low levels German market softer scrapping incentive in 29 Year over year % 2 15 Car production Monthly data 3m moving average Japan USA* China Germany Source: Reuters Datastream * Light vehicle assemblies IR 6

7 Construction US and EU improving but still negative China slightly down from high levels Year over year % Construction market indicators China-fixed assets investments, residential buildings (CMLV) EU-16 construction industrial production USA-Total construction spending value (USD) Source: Reuters Datastream IR 7

8 Zinc Prices and Inventory Tonnes USD/t Shanghai inventory LME Inventory Cash Price LME Quarterly average Zinc price (LME average) USD/t Q2-1 vs period Q2 9 1, % 6 3 Q3 9 1, % Q4 9 2,211-9% 4 2 Q1 1 2,288-12% Q2 1 2, Price 12% down vs Q1 and closed at USD % vs Q1 average Inventory continued to increase, +95, tonnes in Q2 IR 8

9 Zinc USD/t concentrate 6 Zinc treatment charge (TC) USD/t metal Zinc metal price premium Source: CRU Realised TC (including price participation) Spot TC - Asia Source: CRU Europe ex-works US Midwest Delivered Far East (Western) Metal price down realized TC down Continued pressure on spot TC Spot premiums slightly higher metals demand increasing IR 9

10 Copper Prices and Inventory Tonnes USD/t COMEX Inventory Shanghai inventory LME Inventory LME Cash Price Quarterly average Copper price (LME average) USD/t Q2-1 vs period Q2 9 4, % Q3 9 5,84 + 2% Q4 9 6, % Q1 1 7,243-3% Q2 1 7, Price 3% down vs Q1, closing price down 1% vs Q1 average Global inventories down by 92, tonnes in Q2 Copper hedges in 21 at 7,627 USD per tonne and USD/SEK at 8.15 IR 1

11 Copper Copper treatment charge USD/t concentrate Standard grade TC Cif spot mine/trader USD/t TC benchmark Source: CRU USD/t metal Source: CRU Copper metal price premium Spot Copper premium CIF W. Europe Benchmark CIF Europe Concentrate shortage spot TC/RC around zero Spot premium continued up metals demand increasing IR 11

12 Lead, silver and gold - Prices Tonnes Lead LME Inventory LME Cash Price Quarterly average Prices Q1 21 vs period Q2-9 Q1-1 Lead + 29% - 12% Silver + 33% + 8% Gold + 3% + 8% USD/t USD/oz USD/oz Silver Gold IR 12

13 Business Area Mines

14 Mines - Production Milled ore, ktonnes Copper Metal content, tonnes Milled ore, ktonnes Zinc Metal content, tonnes Q3 7 Q4 7 Q1 8 Q2 8 Milled ore (Aitik) Q3 8 Q4 9 Q1 9 Q2 9 Q3 9 Q4 9 Metal content Q1 1 Q Q3 7 Q4 Q1 7 8 Milled ore Q2 8 Q3 8 Q4 9 Q1 Q2 Q3 Q4 Q Zinc metal content Q Start-up in Aitik drives volume increase Metal content, 2,5 ktonnes copper Milled ore slightly higher Lower grades in Tara and Garpenberg reduce metal production IR 14

15 Mines - Financial Summary EBIT 1,34 (486) MSEK 8 MSEK in Q1 21 Higher copper volumes Higher gold and silver volumes Lower prices High costs in Aitik 1 2 MSEK Quarterly EBIT 2 IR 15

16 AITIK copper mine expansion Status On time Mill section 1 and 2 in production On capex Commissioning phase continues Both old and new mill in production Low uptime in crushers High costs Inauguration 31 August Fundamentals Double ore production High productivity Profitable mining of lower grades Average reserve grade,25% Cu annual production approx +5% Life of mine Lower grades Current production plan has lower than average grades Capex Just over 6 bsek Time In production 1 July 21 Full production 36 mtonnes ore IR 16

17 Business Area Smelters

18 Smelters - Production Total feed, tonnes Copper Cathode production, tonnes Total feed, tonnes Zinc Metal production, tonnes Q3 7 Q4 7 Q1 8 Q2 8 Copper feed, total Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Copper cathode production Q3 7 Q4 7 Q1 8 Q2 8 Zinc feed, total Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Zinc metal production Increase despite maintenance stop at Rönnskär Rönnskär, -5% Harjavalta, +28% Continued high production Kokkola, -1% Odda, +3% IR 18

19 Smelters Financial Summary EBIT excl. PIR* 11 MSEK (28) 256 MSEK in Q1 21 Maintenance stop Rönnskär 1 year stop, relining of flash furnace 5 weeks, record time 13 MSEK Good results from Finnish units 9 MSEK Quarterly EBIT Quarterly EBIT excl PIR* -5 * Process Inventory Revaluation IR 19

20 E-scrap expansion in brief Investment rationale Tight Cu concentrate market continues Big increase in e-scrap supply Volume of electronic products increasing Shorter product life cycles Proprietary technology Leading position within e-scrap recycling Fundamentals E-scrap recycling capacity from 45, to 12, tonnes per year Investment of approx. SEK 1.3 billion Expected start up end of 211/ beginning of 212 Increases metal production Gold +2 tonnes Silver +32 tonnes Copper +14,5 tonnes Synergies with existing production Pay back less than 4 years IR 2

21 Financials

22 Financial Summary MSEK Q2 21 Q2 29 YTD 1 YTD 9 Revenues Operating profit (EBIT) EBIT margin 13% 1% 14% 12% EBIT excl Process Inventory Revaluation Free cash flow Capex Earnings per share, SEK Gearing 46% 55% IR 22

23 Group EBIT Q2 21 versus Q2 29 and Q1 21 MSEK Q2 21 Q2 29 Q1 21 EBIT Process Inventory Revaluation EBIT excl Process Inventory Revaluation Deviation Higher volumes from Aitik Specification of deviation Q2 21 vs. Q2 29 Q2 21 vs. Q1 21 Volume Costs Prices & Terms Metal prices and terms Realised Metal- & Currency hedge* TC/RC terms Premiums -1 2 Definitive pricing (MAMA)* Currency effects w hereof translation effects Others -1 5 *Actuals for each period Q2 21 Q2 29 Q1 21 Realised Metal- & Currency hedge Definitive pricing (MAMA) Of which more than 5% is Aitik expansion Zinc USD/t -12% Copper USD/t -3% Lower realised TC for Zinc USD/SEK: +5% EUR/SEK: -1% IR 23

24 Capital Structure SEK bn 3 Jun 3 Jun Unless otherwise stated Total Asset % 55% Gearing Capital employed Shareholders' equity % 4% 48% 46% 43% 46% Net debt Gearing % % Equity/asset ratio, % % Duration of committed credit facilities, years Average interest rate, % % % Q29 Q39 Q49 Q11 Q21 Interest duration, years Net payment capacity Shareholders equity includes the value of outstanding hedge contracts 2. Defined as unutilised credit lines and cash less outstanding commercial papers IR 24

25 EBIT per Business Area MSEK Q2 1 Q2 9 YTD 1 YTD 9 Mines Sales EBIT Capex Smelters Sales EBIT ex PIR* Capex Group Sales EBIT ex PIR* Capex *Process Inventory Revaluation IR 25

26 Operating costs Change in operating costs, local currencies YTD 21 vs 29 Energy +14% Consumables +1% Personnel +11% Transport -14% External services +19% Depreciation & other +27% External services; 18% Share of total operating costs Depreciation & other; 14% Energy; 17% Consumables; 17% Total operating cost in local currency Total operating cost in SEK +13% +8% Transport; 5% Personnel; 29% Volumes drive costs Aitik and smelters on higher production Parallel operation of old and new mill in Aitik Maintenance stops IR 26

27 Cash Flow MSEK Q2 1 Q2 9 YTD 1 YTD 9 Op profit before depreciation (EBITDA)* Changes in working capital* Capital expenditure w hereof Aitik Free cash flow *Includes Process Inventory Revaluation Increased inventories Very low at year end 29 Currently somewhat over target levels Focus on securing feed for smelters Strong growth in Aitik and maintenance stop in Rönnskär Large shipments at end-of-month IR 27

28 Sensitivity Analysis Change in metal prices, +1% EBIT effect, SEK m Change in USD, +1% EBIT effect, SEK m Change in TC/RC, +1% Copper 47 USD/SEK 97 TC Zn 55 EBIT effect, SEK m Zinc 565 EUR/USD 38 TC/RC Cu 55 Lead 1 USD/NOK 9 TC Pb -15 Gold 14 Silver 11 Estimate of the 12-month effect on Group EBIT on 3 June 21, based on planned production volumes. Effects of hedging, contracted TC/RC or stock exposures are not taken into account IR 28

29 Summary China concerns and price volatility Underlying demand improving Aitik expansion On time On capex Not yet stable, actions crushers Full capacity in year maintenance stop Rönnskär Refinancing of debt portfolio IR 29

30 Forward-looking statements Certain statements in this presentation are forward-looking, and the actual outcome could be materially different. Such forwardlooking statements are based on Boliden s present plans, estimates, assumptions, projections and expectations and are subject to risks and uncertainties. In addition to the factors explicitly discussed, other could have a material effect on the actual outcome. Such factors include, but are not limited to, general economic or political conditions, fluctuations in exchange rates, interest rates and in metal prices, production disruptions, technological issues, interruptions in supply, actions of courts, regulators, government agencies, competitors, customers, suppliers, employees and other third parties. IR 3

31 Boliden produces metals that make modern life work IR 31