New Major Dividend From LKAB to the Swedish State of SEK 7.6 Billion

By Hilde-Gunn Bye, High North News - February 14, 2024
LKAB extracts iron ore from several places in Norrbotten, Northern Sweden, and is the largest iron ore producer in Europe. (Photo: Arne O. Holm / High North News)

The Swedish mining company LKAB’s year-end report for 2023 shows the company’s profit is somewhat stable compared to 2022. However, the company specifies that developing the Iron Ore Line will be crucial for both present volumes and future production increases.

The Swedish state-owned mining company LKAB delivered an operating profit of SEK 16 billion for 2023. In 2022, the figure was SEK 20,8 billion.

The company’s net sales in 2023 decreased to SEK 42,9 billion from 46,5 billion in 2022.

The figures were revealed in the company’s year-end report for 2024, presented on Monday.

The Board of Directors is proposing to the Annual General Meeting that an ordinary dividend amounting to SEK 7,6 billion be paid. This is 50 percent of the SEK 15,2 billion profit for the year. The profit in 2022 were also approximately SEK 15 billion.

Increased production, yet fewer deliveries

During the past year, the company increased production from 25 megatonnes (Mt) in 2022 to 26,2 Mt. Deliveries, however, decreased somewhat due to a lack of raw materials, production disruptions during the first six months, and capacity restrictions on the Iron Ore Line.

As High North News has reported, an iron ore train derailed on the Iron Ore Line in Northern Sweden in December, and traffic has not yet resumed.

LKAB writes that the consequences are difficult to fully assess in light of the already strained capacity on the Ore Railway, and effects going forward are still being investigated. The assessment, however, is that there is a significant risk that this could have far-reaching consequences.

“We can no longer shut our eyes to how critical to society and how sensitive the infrastructure of the Ore Railway is, and the value that is thus at stake. We are ending the year with relatively high production, and the expansion of the Ore Railway is crucial both for the current volumes and for future production increases,” says Jan Moström, President and CEO of LKAB, and adds:

“At this moment, however, we are focusing on how capacity can be ensured in the near future.”

A good fourth quarter

LKAB had strong results in the past year’s fourth quarter, with net sales increasing to over SEK 10,7 billion. The company points to higher iron ore prices, delivery volumes, and a higher percentage of pellets, partly offset by lower pellet premiums.

The operating profits of the fourth quarter also increased to 3,8 billion.

High North News is an independent newspaper published by the High North Center at Nord University in Bodø, Norway.