Welcome to this webcast presentation of Rana Gruber's Third Quarter Results. My name is Gunnar Moe, and I am the CEO of Rana Gruber. With me today is our CFO, Erlend Høyen, who will give you additional insight into the financial results for the quarter. I will start today's presentation by giving you a quick introduction to Rana Gruber. I will then walk you through the key events for the quarter before Erlend takes you through the financials. I will come back to sum up and share a few comments on our outlook before we move on to the Q&A. You may ask your questions at any time during the presentation by using the Q&A function embedded in the webcast solution, and we will answer them at the end of this session.
As many of you know by now, Rana Gruber is the only iron ore producer in Norway, located in the heart of Norway, Mo i Rana, with more than 200 years of history. Our products of iron ore concentrates and our specialized product, Colorana, are sold in the international market, mainly to customers in Europe. We extract iron ore from underground mines and open pit mines in the mountains surrounding Mo i Rana. Our annual production capacity is 1.8 million metric tons of iron ore concentrate. We have a fully invested infrastructure and operations, enabling us to run operations with less operational and financial risk. Our products are all natural, and we do not add chemicals in the production. We are the producer with lowest CO2 emissions globally, and we have decided to reduce all CO2 emissions to zero by 2025.
Let's have a quick look at the overall market drivers our industry is exposed to. Key demand drivers for our industry include infrastructure projects and increased climate awareness. Economic stimulus packages post-COVID-19 have been implemented globally to support infrastructure projects. On top of this, increased environmental concern globally has led to a shift in demand among our end users toward more high-quality products. Increased environmental awareness has also boosted the transition to electric cars. After the summer, the market for iron ore has been impacted by stricter steel production regulations in China, which have led to volatility in market prices lately. Let's have a quick look at the highlights for the third quarter. The third quarter has been characterized by volatile markets, both for iron ore prices, freight costs, and energy prices.
Our revenues fell back by 70% from Q3 last year, mainly as a result of additional freight expenses, which I will talk more about in a moment. We increased concentrate production by 2% from Q3 2020, and our niche product, Colorana, increased production by 36%, although from small volumes. Activity in the open pit mine increased significantly from last year's level for two reasons. In Q3 2020, flood and related production issues reduced open pit production for the comparable period. This quarter, more production was shifted to open pit due to the movement from underground mining level to another. Increased open pit activity, higher energy costs, and corporate activity related to strategic projects were all factors which contributed to higher cash costs in the quarter.
Net gain from hedges impacted our performances positively, and net profit came in at NOK 256 million, compared with 59.7 million one year earlier. For Q3 2021, the board has resolved to pay out NOK 1.05 per share, corresponding to 70% of EPS. This comes on top of the dividend of NOK 6.76 per share distributed for the first half of the year.
Thank you, Gunnar. We'll now dive into the financial highlights for the quarter. Financial figures will be nominated in the Norwegian kroner if not otherwise mentioned. Concentrate production increased by 2% from the comparable period last year, supported by good operational performance. As Gunnar mentioned, the revenue came down in the quarter and EBITDA was also hit by higher cash costs. Looking at the market prices compared to Q3 last year does not look that dramatic as they show an increase of 38% from last year's level. However, there are multiple factors impacting our realized prices that we'll get back into in the next slide. On this slide, we have made an illustration of how our hematite revenues are booked.
This is essential for understanding why prices reduced our revenues in Q3 this year versus last year, while market prices increased in the same period. The final price for hematite concentrate is settled with a three-month lag. This means that all shipments in any given quarter will be finally settled in the following quarter. Only shipments completed in the quarter's first month will be settled before the time of reporting, which usually takes place in the middle of the next quarter. For Q3 2021, July shipments will be fully settled at average prices for October, while shipments in August and September will be booked at the last known average in the quarter, in this case, the average for September.
This means that in a market where prices are trending downwards, our realized prices will be lower than the market average, for that given quarter. Let's look at the production for the quarter. Most importantly, we had no injuries related to our production this quarter either, and sick leave has continued to be low in the third quarter. The increase in production is a result of continuous operational, improvements and is in line with the mine plan. As most of you know, our main product, hematite, represents more than 90% of our total production. Total production of ore was marginally lower in Q3 2021 versus Q3 2020, and production shifted from underground mine to open pit, mainly as a result of the movement from one underground mining level to another.
Now we'll have a look at how the main driver is impacting revenue and EBITDA for the quarter. Product revenues for the third quarter came in at NOK 258 million, compared with NOK 304 million in the same period last year. As illustrated on this slide, the downward shift in the market for iron ore impacted revenues and the EBITDA negatively, while volumes produced and sold held up well. Higher freight costs reduced both revenue and EBITDA by approximately NOK 48 million in the quarter, and EBITDA came in at NOK 56 million in the quarter, down from NOK 161 million in Q3 last year. The operating result is related to lower revenues due to negative market shift, in addition to increased cash costs.
Now we'll see a little bit more about our freight cost exposure. Rana Gruber competes in a global market. Product quality and freight costs are key elements in this competition. As they communicated earlier this year, Rana Gruber has moved to a spot market exposure as this has become the industry standard. Freight rates have been very high in Q3 and in the beginning of Q4, while easing down somewhat during the last weeks, impacting our revenue quite significantly for the quarter. Over time, the transition is expected to improve competitiveness and revenue when shipping market normalizes. Now we'll have a look at the cash costs for the quarter. For the third quarter, cash cost was NOK 481 per metric ton, compared to NOK 382 per metric ton in Q3 2020.
This relates to both hematite and magnetite concentrates. This increase is caused by higher activity on the open pit mine as a result of movement from one underground level to another. In addition, flood and the related production issues in Q3 2020 reduced open pit production in the comparable period for last year. The increase in energy prices lifted prices for both fuel and power consumption, increased corporate activity related to the key strategic initiatives that we have, and the company's transition to Oslo Børs main list required more human resource capacity in the quarter. Now let's look at a few remaining items from the P&L. We have gone through the revenue and operating profit part of the P&L. Some short comments on some of the common elements displayed here.
Gains from hedges totaled NOK 58 million in the quarter, compared with losses of NOK 45 million one year earlier. This gave a net profit for the quarter of NOK 56 million compared to NOK 60 million in Q3 last year. This again corresponds to an earnings per share of 1.51 compared to 1.60 in the same period last year. Now we'll have a quick look at our hedging exposure. Our performance is exposed to fluctuations in the sales price of iron ore concentrate, as well as fluctuations in currency levels, then mainly in US dollar and euros. Risk related to the sales price of iron ore concentrate is managed by combining physical delivery agreements towards end customers and forward contracts.
Our hedging positions shall contribute to a stable and solid cash flow, enabling future investments and a predictable and attractive dividend strategy. In periods of higher volatility, our hedging strategy has proven valuable, showcased in the current quarter. Rana Gruber has now secured 34% of the production for the remaining part of 2021 and all of 2022 at an average price of $123.37 per metric ton. Now I'll look at the cash flow for the period. Total cash flow for the third quarter was NOK 2.7 million compared with a negative NOK 1.8 million in Q3 last year. By the end of September, cash holdings was NOK 427 million. Total CapEx for the quarter was NOK 32 million.
Five million related to development projects and nine million related to maintenance CapEx. In addition, eighteen million was related to buyback of the company's administration building that we have bought back from Mo Industripark. Finally, we'll look at the financial position at the end of September. We finished the third quarter with a solid financial position enabling us to deliver on our dividend policy. With an equity ratio of 52.5% and cash holdings of NOK 427 million, the company hold a good liquidity position in volatile market conditions. The company's debts, excluding leasing obligations by the end of the third quarter consisted of a single USD loan of approximately NOK 50 million, as well as an unused credit facility of NOK 100 million.
Due to the strong financial position of the company, the board of directors has decided to repay the entire USD loan of NOK 50 million in the fourth quarter of 2021. This concludes the review of the financial performance, and I will now hand the word back to Gunnar for his final remarks.
Thank you, Erlend. To sum up, this quarter has been characterized by market volatility in several aspects. First, production limits at Chinese steel mills led to a negative shift in demand for iron ore, which resulted in declining market prices through the quarter. This impacted our revenues from shipments, which are booked with a three-month lag. Second, we were impacted by higher freight costs due to constraints in the global shipping market. Changes in our freight cost exposure lowered revenues by approximately NOK 48 million for Q3 2021. Thirdly, our cost base increased due to higher price, higher activity in the open pit mine, increased energy costs, and higher corporate activity. We have initiated long-term strategic projects which will increase product margins as well as promoting production with less emissions leading the way for our industry.
Increased activity will for some time involve increased cash costs. However, the company now has capacity to insource some work, working streams previously handled by external providers. Production has been stable over the past quarter, delivering on our promise to deliver stability in production volumes over time. As expected, the switch to a new mining level has increased production variations somewhat, but going forward, we benefit from this transition. We expect higher underground production and reduced open pit activity in the fourth quarter. On a global level, market fundamentals remain strong and increased governmental spending on infrastructure projects globally continues to be a positive driver for Rana Gruber's products. Historically, prices for iron ore are at high levels, but the market continues to be characterized by uncertainty and volatility.
This concludes today's presentation, and please note that we will revert in February for our Q4 report. I would now like to open for questions and at the same time introduce you to our IR contact, Vegard Nerdal.
Thank you. We have some questions, and I would like to start with you, Gunnar. How many vessels do you expect to ship in Q4?
We plan to ship seven vessels in Q4 and in addition to that, go out of the year with some thousands on stock.
Thank you. Next one, I think this is for you, Erlend. Do you consider extra dividend or share buyback at the end of the year?
We are considering both options, but we haven't concluded yet. This will be something that we will have to get back to by the early part of the next year. We are considering both options, yeah.
Can you also say something about your expectation for cash costs for the upcoming quarters?
Cash costs has been high in Q3, we know that. Some of the elements related to SG&A and the strategic projects and the transition to the main list will continue for the next six months, we believe. We expect that some of the production elements related to the open pit mine will decline in the next quarter. We do mine on natural resources, so we are always exposed to that fact. We expect some of the costs to go down, but some of the costs we have to expect that will follow us into the next year.
Next one is for Gunnar. Can you say something about the transfer for the main list?
Yes. We went into the new Euronext Growth platform in early this year, and we told that within 12 months we expect to be on the main list. There's nothing at the moment that won't reflect that we will reach this goal. Within Q1 is our goal still.
Thank you. That was all for today. No more questions.
Thank you.
Thank you.