Boliden AB Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Yes, good morning. I have few questions. I guess, first of all, on the newly closed acquisition because previously, you -- when asked about any potential operational improvements in Zinkgruvan and Neves-Corvo, you've said that you can't really comment before the deal is closed. So now that it is closed, can you provide anything on that front for now?

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Okay. That's understood. So -- and then also in the EBIT bridge, the treatment charges contributed roughly negative SEK200 million quarter-over-quarter. How much of the EBIT hit from lower benchmark terms is sort of left to take in Q2, should we expect a similar impact in the Q2 bridge as well?

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Okay. That's very clear. And the final one, even that Q4 was a particularly expensive quarter and costs were now down roughly SEK600 million. For the coming quarters, would you say the Q1 cost base is more indicative of the situation going forward if we exclude the two new mine studies?

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Okay. Okay. And I guess that was all for me. So thank you.

Question: Liam Fitzpatrick - Deutsche Bank - Analyst : Good morning. I just wanted to come back to Somincor and Zinkgruvan in terms of the guidance because the CapEx and the production from what I can tell, looks a little bit different to Lundin. So on the CapEx side in terms of sustaining CapEx, I think it had been indicated annualized at sub SEK1.5 billion based on what you've told us today, it looks more like around SEK2 billion annualized. So any color on that difference would be helpful. And then on production, I understand you're still getting your arms around these assets. But last year, Lundin had guided that Somincor zinc output in '25, '26 would be moving up to around 140,000, 150,000 tonnes of zinc, which is quite a bit higher than the annualized figure you're giving us today. So can you help us explain that? And should we think about these reduction in CapEx levels that you're giving us as indicative for what these assets will do in 2026? And then separately, a quick follow-up on the sales volume point. I noticed that the zinc sales were quite a bit lower than production. Is that purely timing? Or does that relate to inventory build in the system for the order expansion? Thank you.

Question: Liam Fitzpatrick - Deutsche Bank - Analyst : Okay. Could I quickly follow up on the -- Hakan on your point around no inventory build yet for Odda. Does that indicate we should expect some sort of whip inventory build as we move through the second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 7:30AM, BOL.ST - Q1 2025 Boliden AB Earnings Call

Question: Marina Calero - RBC Capital Markets - Analyst : Good morning. Thanks for the call. I have a couple of questions from my side. First, on the new assets. You have provided us today with some clarity on the outlook for this year. Can you comment on how synergies that you're expecting to receive from the timing for those? And then the second question is on the smelters cost. It looks like they've been down quarter-on-quarter. How should we think about that for the coming quarters this year? Thank you.

Question: Marina Calero - RBC Capital Markets - Analyst : Thank you.

Question: Amos Fletcher - Barclays - Analyst : Yeah, morning, gents. A couple of questions. I just wanted to ask on internal profit elimination, this was the second quarter where we had quite a big beat on the back of higher expected elimination. Can you just talk about the drivers behind that and what we should expect in future quarters?

Question: Amos Fletcher - Barclays - Analyst : Okay. And then I wanted to ask on working capital, obviously, quite a big build in the quarter. Can you just discuss how normalized current working capital levels are? And will there be any one-off impact from the Lundin acquisition?

Question: Amos Fletcher - Barclays - Analyst : Okay. And then the final one I just wanted to ask was on Aitik. Can you provide any guidance on how the recovery profile is likely to move through the course of this year?

Question: Amos Fletcher - Barclays - Analyst : Okay, that's great, thank you very much.

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Hello, thanks for taking my questions. The first one is for Hakan. Going back to the treatment totes. When I look at your sensitivities and I assume that half of the new benchmark for copper and zinc, expect into your numbers for Q1. I'm getting a potential incremental impact in Q2, maybe at around SEK170 million or SEK200 million, and you're talking about SEK300 million. So could you just clarify how much of the new benchmark you've taken in Q1 and why SEK300 million comes through Q2? Thank you.

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Yes, that's very helpful. Second question on Aitik. You talked about the fact that you should be out of the oxide zone perhaps, I guess, in the second half. And it sounds like you're more confident on the diorite being an issue isolated to 2025. Is that incremental sort of confidence you got post the Capital Markets Day? And I think at CMD, you talked about potential mitigating measures. Is there anything you're looking at Aitik or you think going into 2026 both oxide and the diorite issue should be behind us.

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Very clear. And maybe last one on Garpenberg, you talked about the zinc rate being lower than the full year average in Q2. Shall we expect something similar to Q1 or even worse?

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Perfect. Thanks very much.

Question: Christian Kopfer - Handelsbanken - Analyst : Thanks, operator. Good morning. Two follow-ups from my side. Firstly, for Somincor, sorry for maybe not understanding it fully when you talked about it. But if I look at the most recent guidance from the previous owners, it seems like you are drastically lower on zinc and on copper as well. So is that primarily driven by mill ore volumes or low grades?

Question: Christian Kopfer - Handelsbanken - Analyst : And why is throughput suddenly so much lower?

Question: Christian Kopfer - Handelsbanken - Analyst : Okay. So you expect to -- so when you did the due diligence, when you bought it to you expected throughput to come back to original guidance for 2026? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 7:30AM, BOL.ST - Q1 2025 Boliden AB Earnings Call

Question: Christian Kopfer - Handelsbanken - Analyst : Okay. And maybe if you are more open on this. When you did the acquisition price analysis from your perspective, did you include more reserves?

Question: Christian Kopfer - Handelsbanken - Analyst : Okay. And then finally for me on smelters. So did I understand you right there, Mikael, when you -- that you said that we shouldn't expect any call it, tailwind for the next couple of quarters on the smelters driven by higher -- driven by higher gold silver output.

Question: Christian Kopfer - Handelsbanken - Analyst : Right. Okay, thanks.

Question: Daniel Major - UBS - Analyst : Hi, yes, thanks for the questions. Just another one on the Neves-Corvo though, and I appreciate you've made it pretty clear the guidance previously provided by Lundin was a bit more optimistic, and that's a driver. But if we focus more on the normalized run rate of the asset beyond the guidance you've inherited or the budget you've inherited for this year. Is it fair to assume that the optimal configuration of the asset is perhaps a lower throughput run rate than the milling capacity, particularly in the zinc circuit going forward. And therefore, 100,000 tonnes broadly plus or minus is a more normalized run rate for Neves-Corvo?

Question: Daniel Major - UBS - Analyst : Okay. And then on the previous guidance you provided SEK300 million to SEK350 million EBITDA contribution from the Lundin assets. Is that based on the assumptions we see today or Lundin's previous guidance and what other macro assumptions are embedded in that?

Question: Daniel Major - UBS - Analyst : Okay. And then just a second one, looking at the sensitivity analysis on Page 23 of your release, that's excluding the acquired assets, with particular reference to the currency sensitivity, can you give us any high-level indication of how that would be grossed up to include the new assets on the euro, dollar and the euro SEK?

Question: Daniel Major - UBS - Analyst : Okay. So you look up there at the table next quarter on a 12-month forward basis. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 7:30AM, BOL.ST - Q1 2025 Boliden AB Earnings Call

Question: Daniel Major - UBS - Analyst : Okay, great. Thanks.

Question: Cody Hayden - Berenberg - Analyst : Good morning and thanks for taking my question. Just two very quick ones. I guess, first, Garpenberg on the zinc grade. I know you mentioned that you expect Q2 to be slightly better than Q1. But how should we think about zinc grade in Q3 to Q4, kind of work towards getting back to 2025 [40%] and then secondly, could you maybe just briefly get the business. Thank you.

Question: Cody Hayden - Berenberg - Analyst : Yes. Sorry about that. Just on my second question. just around kind of tariffs and potential impact on the business. Any kind of update you could provide there?

Question: Cody Hayden - Berenberg - Analyst : That's very clear. Thank you both.

Question: Ola Soedermark - Kepler Cheuvreux - Analyst : Yes, thank you, operator. Just a follow-up on Tara and the ramp-up. Regarding the ramp-up with increasing costs and how the timing of shipments is filtering through the P&L during the quarter. Are there any mismatch there? Or is it a normalized level and equalized kind of timing between the cost and the shipments? Thank you.

Question: Ola Soedermark - Kepler Cheuvreux - Analyst : Okay. And a follow-up on the recoveries at Aitik, you think I've never seen such low recovery rate at Aitik. I say it's going to last for 1 quarter is going to improve gradually during the second quarter.

Question: Ola Soedermark - Kepler Cheuvreux - Analyst : Okay, thank you.