Earnings Release • Feb 15, 2023
Earnings Release
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CEO Gunnar Moe & CFO Erlend Høyen Mo i Rana, 15 February 2022
This presentation has been prepared by Rana Gruber ASA (the "Company") solely for information purposes.
The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Certain statements included in this presentation contain various forward-looking statements that reflect management's current views with respect to future events and financial and operational performance.
The words "believe," "expect," "anticipate," "intend," "may," "plan," "estimate," "should," "could," "aim," "target," "might," or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realised. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. Past performance information included in this Presentation or in such other written or oral material is not an indication of future performance and the actual returns on investments may differ materially from the returns indicated herein.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, neither the Company nor its subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
The financial results of this presentation are based on the IFRS in contrast to the NGAAP-based results of the presentation for the corresponding period last year. The historical results included in this presentation therefore differ from the results communicated last year.
For APM definitions, please refer to the appendix to the condensed interim financial statements. Quarterly figures are unaudited.
Strong production trend continued with 460 thousand mt in Q4-22 (and 1.73 million mt in FY-22), enabling reduced costs/mt
Improved market towards year-end
Local Jobs and Value Creation Award awarded by Nordland county part of The Confederation of Norwegian Enterprise (NHO)
Dividends of NOK 3.0 per share – second largest since listing
Agreement with Sandvik to support zero carbon emissions
One of the industry's lowest carbon emissions and aim to be carbon free by end of 2025
Advantageous location ensuring energy-efficient logistics
Strategic projects to enhance market position
Strategic project: Fe65 – increase minimum iron ore content in hematite product to 65%
Strategic project: Carbon free production
Planning of on-site infrastructure started
Open-pit production in Ørtfjell to continue with today's operations facilities until completion in 2024
Future open-pit production in Stensundtjern to be carbon free
On-going project with Sintef and other players to investigate electric vs. hydrogen solution
Strategic project: Carbon free production
Drilling machine for long hole production drilling
Battery operated tramming motor
Milestone in RG decarbonization program
Continued strong production trend due to continuous improvement in entire operations
FY-22 production of 1.73 million mt is the third largest in the company's history
Volumes sold were moderate compared to volumes produced
Wagon emptying resulted in broken jaw
Disembarking from loader resulted in broken arm
Focus on safety to continue in 2023
Related to electric power hedging
Previous principle: realised gains added to, and losses subtracted from, OPEX. Unrealised gains/losses excluded from result
New principle: both realised and unrealised gains/losses included under 'other financial gains and losses' in P&L
Definition of cash cost changed to include realised gains and losses
Explained by higher realised prices for Q3 shipments, reduced freight cost, and weaker NOK
| Development in cash cost/mt Amounts in NOK million (Except where otherwise stated) (NOK/mt produced) |
Q4-22 | Q4-21 | |
|---|---|---|---|
| Pre-tax profit | 343.6 | 11.1 | |
| Unrealised gain/(loss) from hedging positions | (141.0) | 120.8 | Unrealised gain/losses from |
| Adjusted pre-tax profit | 202.7 | 131.9 | hedging of iron ore, USD, and electric power |
| Ordinary income tax | (75.6) | (2.8) | Excluding effects from Q4 shipments for iron ore and USD. |
| Tax on adjustments | 31.0 | (26.6) | |
| Adjusted net profit | 158.1 | 102.3 | |
| Adjusted EPS (NOK) | 4.26 | 2.74 | |
| DPS (NOK) | 3.00 | 1.51 (NGAAP) |
| Amounts in NOK million (Except where otherwise stated) |
Q4-22 | Q4-21 | Amounts in NOK million (Except where otherwise stated) |
31.12.2022 | 30.09.2021 | Change (%) |
|---|---|---|---|---|---|---|
| Net cash flow from operations | (9.8) | 39.4 | Total assets | 1 445 | 1 333 | 8 |
| Total equity | 835 | 606 | 38 | |||
| Net cash flow from investing activities | (67.1) | (12.3) | Equity ratio (%) | 57.8 | 45.5 | 12.3pp |
| Net cash flows from financing activities | (49.0) | (190.0) | Cash and cash equivalents | 213 | 339 | (37) |
| Total cash flow | (125.9) | (162.9) | Interest-bearing debt* | 138 | 132 | 5 |
*The interest-bearing debt consists of lease and rent obligations. The company has an unused credit facility of NOK 100 million.
Continued strong production trend, agreement with Sandvik, second largest dividend distribution since listing
Long-term market outlook remains positive despite turbulent global economic situation
Positive production trend and progress with strategic projects provide promising foundation for 2023
Contact: [email protected] Next report: Q1 2023 – 11 May 2023
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