Swedish mining company Boliden reported a more than 50% drop in first-quarter operating profit, attributing it to severe winter weather, reduced mining grades, and labor strikes. The operating profit fell to 1.62 billion Swedish crowns ($148.80 million), a significant decline from 3.41 billion in the same period of 2023.
Despite analysts’ expectations of 1.55 billion crowns, the company’s operating profit, excluding the revaluation of process inventory, missed the mark by 11%. Boliden’s CEO, Mikael Staffas, highlighted the challenging production conditions during the quarter, emphasizing exceptionally tough weather in January and strikes in Finland.
The company estimated that the suspended strikes had impacted earnings by 400 million crowns, lower than the 500 million crown impact forecasted earlier. While addressing investors, Staffas acknowledged the ongoing risk of strikes in Finland and anticipated a one-off positive effect of 200 million crowns in the second quarter if inventory disruptions due to the strikes were resolved.
Despite the disappointing first-quarter results, some analysts, like Martin Persson from insurer Lansforsakringar, still found Boliden’s stock appealing, especially considering the underlying copper and zinc prices.
Boliden’s shares, initially experiencing losses, recovered slightly and were down 0.3% during midday trading in Stockholm. The company also reiterated its guidance for investments of 15.5 billion crowns during 2024, despite recent challenges such as a fire at its Ronnskar copper smelter, declining metal prices, lower mining grades, and the suspension of production at its Tara zinc mine.