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Investing.com -- Swedish mining company Boliden (ST:BOL) AB on Friday reported mixed second-quarter results and reduced its grade guidance for the Garpenberg mine due to challenging ground conditions.
The company posted operating profit excluding process inventory revaluation of SEK1.28 billion, which was 2% above RBC estimates but fell 2% short of consensus expectations and 6% below company consensus.
In the mining segment, operating profit reached SEK1.04 billion, in line with RBC and consensus estimates but 11% below company consensus of SEK1.2 billion.
Despite zinc and lead production volumes coming in below forecasts, quarterly sales met expectations as Boliden released inventory built up in the first quarter.
The smelting segment outperformed expectations with operating profit of SEK585 billion, exceeding RBC estimates by 82% and company consensus by 65%, driven by better production volumes and margins.
Earnings per share came in at SEK2.02, ahead of RBC estimates of SEK1.27 but 30% below company consensus of SEK2.90, with the difference attributed to lower than expected financial expenses and taxes.
Free cash flow of SEK2 billion beat estimates, reducing net debt to SEK20.5 billion, 16% below RBC expectations.
Boliden maintained its full-year 2025 capital expenditure guidance of SEK15.5 billion but lowered the grade guidance for its Garpenberg mine to 3.1% from 3.3% previously, citing delays in mining certain areas due to challenging ground conditions.
At the Aitik mine, copper production increased 15% quarter-over-quarter thanks to better grades, with the diorite intrusion having less negative impact compared to the previous quarter.
The Zinkgruvan and Somincor mines experienced reduced milled volumes due to maintenance activities, with Somincor also affected by power blackouts. The Odda expansion project remains on track to complete its ramp-up by late 2025.
Boliden shares have underperformed the sector by 5% over the past three months. RBC maintains a Sector Perform rating on the stock with a price target of SEK335 per share.
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