Welcome to this webcast presentation about Rana Gruber's performance in the first quarter of 2022. 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 of the quarter. Before we start, I would like to express our sympathy with the Ukrainian people. The war in Ukraine is sad in every aspect, but most of all for the Ukrainian people. Secondly, we have to realize that the conflict affects the entire world and also the industry. Increasing prices of almost all commodities and logistical challenges will affect also the mining industry in 2022. I will start today's presentation by giving you a quick overview of the highlights of the quarter.
I will give you some updates on our strategic projects, our production, and our hedging positions before Erlend takes you through the financial results. Towards the end of the presentation, I will come back to sum up and make a few comments about our outlook before we move on to Q&A. You may ask your questions at any time during the presentation by using the Q&A function in the webcast solution, and we will answer them at the end of the session. Next slide, please. The revenues of the quarter came in at NOK 515.7 million. Regarding market prices for iron ore, the quarter saw improvements vis-à-vis Q4 in 2021, but also a couple of temporary drops due to the handling of COVID-19 in China. The adjusted net profit came in at NOK 110.8 million.
The board of directors proposed a quarterly dividend of NOK 2.09 per share, implying a payout ratio of 70%. The production of iron ore concentrate remained stable and amounted to 406,000 metric tons. Finally, the Rana Gruber share was listed on the main list of Oslo Stock Exchange, being the first non-bank company from Nordland County to be on the main list. This event marked an important milestone, not just for us, but also for the entire business community in Northern Norway. We have also progressed with our strategic projects.
To reach the goal of eliminating CO2 emissions from the operations by the end of 2025, we have started organizing the replacement of propane-based heating of the mines with a more climate-friendly alternative, which is likely to be either electric heating or bioheating and will contribute to emission reductions from the fall of 2022 and onwards. We have also ordered new electric passenger cars, a new drilling rig, and have secured a place in the queue to electric hauling equipment suppliers who expect to deliver the equipment in 2023. Alongside electric equipment supply, we have also started the planning of an on-site charging infrastructure. We will give further updates on this strategic project by the end of this year.
Regarding the aim of increasing the average iron content on our products to 65% from the current average of 63%, we have intensified the preparations for the optimization and further development of the hematite processing. Specifically, we expect to install new equipment and optimize existing equipment in the summer of 2022, and to make further related investments in 2023. We are also collaborating with Cargill in order to prepare customers to receive the coming premium product. All of this is in line with the planned completion of the pro project in 2024. Now a few words about the production of the quarter. The iron ore concentrate production total 406,000 metric tons, which is in accordance with the planned production and indicates a stable production level.
Most of the produced volume was a hematite concentrate of 383,000 metric tons. In addition, 23,000 metric tons of magnetite concentrate and two metric tons of Colorana were produced. The total production of ore decreased with 9.2% compared to the first quarter of 2021. This decrease is the result of more work for the removal of waste rock in the open pit mine, which is done at the expense of ore production and is done when the circumstances require. Now a few words about our hedging positions. We continuously assess our portfolio of hedging positions based on dialogue and input from customers, partners, industry experts, and analysts. The purpose of the hedging positions is to secure a stable and solid cash flow, which enables future investments and predictability and attractive payout strategy.
As stated in our hedging policy, hedging positions can cover a maximum of 50% of the annual production volumes and can be divided into positions for a duration of two years. In the first quarter, we made an agreement to sell 120,000 metric tons in the third and fourth quarter of 2022 at an average price of $130.3 per metric ton. We also made an agreement to sell 90,000 metric tons in the first quarter of 2023 at an average price of $129.9 per metric ton.
Finally, we made an agreement to sell 250,000 metric tons from the third quarter of 2022 to the second quarter of 2023 at an average price of $149.9 per metric ton. I will now leave the word to our CFO, Erlend Høyen, to take us through the financial results of the quarter.
Thank you, Gunnar . Before we start to the figures, first, I want to remind you that the financial results reported in this presentation are based on IFRS, in contrast to the NGAAP-based results of previous presentations. The historical results included in this presentation have therefore been restated in accordance with IFRS. For more information and descriptions of effects on the transition from NGAAP to IFRS, please see the annual report for 2021. Now to the figures. I will be denominating figures in Norwegian krone. As Gunnar mentioned, revenue in the quarter was solid at NOK 515.7 million. This was a result of stable production, supported by the market uplift that we saw during Q1. The costs for the quarter also increased due to various circumstances.
More than half of the increase stems from our economic contribution to Polarsirkelen Airport in Mo i Rana and increased corporate activities related to the uplisting of our share on Oslo Stock Exchange. Both of these costs are one-off costs that will not affect results going forward. In addition to these two one-offs, contributors to the increased cost in the quarter were mainly related to increased commodity prices, such as diesel, explosives and steel, new recruitments, as well as increased pension and insurance costs compared to Q1 last year. Together, this resulted in a solid EBITDA of NOK 284 million compared to NOK 327 million for the first quarter last year. We have gone through the revenue and operating part of the P&L.
Let's briefly comment on some of the other elements displayed here. Net financial items for the quarter mainly consists of unrealized losses related to our hedging portfolio of iron ore. These are changes in the present value of the forward contracts entered into in 2021 and 2022. In addition, net financial items include interest expenses and gains from currency hedges. The adjusted net profit ended at NOK 110.8 million for the quarter, giving an adjusted EPS of NOK 2.99 compared to NOK 3.18 for the comparable period last year. Now, let's have a look at how we calculate the adjusted net profit and the corresponding adjusted EPS. According to our dividend policy, the adjusted net profit is based on the IFRS net profit before tax.
This is adjusted for the unrealized gains and losses from the company's hedging portfolio in iron ore and foreign currency, which does not impact the shipments concluded in the quarter. This will be the positions with maturity three plus months after reporting date. The board of directors can also adjust for larger specific events that it does not consider to be relevant for normal business. To understand the adjusted net profit for the quarter, I want to highlight these three factors. The first is the adjustments related to our contribution to Polarsirkelen Airport. The second is the adjustment related to unrealized changes in the value of our iron ore hedging portfolio. The third is the adjustment related to the unrealized changes in the value of the hedging portfolio of foreign currency.
The latter two adjustments concerns effects that does not correspond to shipments that were made in the first quarter. This then resulted in the adjusted EPS of NOK 2.99 and a dividend per share of NOK 2.09. Now let's look at the cash flow and our financial position. Total cash flow from operations amounted to NOK 55.2 million, which includes partial payments of tax for 2021. Cash related to investment activities was NOK 18.3 million. Of financial activities, NOK 56.4 million was payout of dividends for Q4 2021, while NOK 14.2 million was acquisition of own shares, and NOK 7.9 million was payment of lease liabilities. In sum, the total cash flow for the quarter was negative by NOK 45.8 million. Let's look at our financial positions.
The company still has no long-term debt toward financial institutions. After dividend distribution for the fourth quarter of 2021, the equity ratio for the company end at 48.5% by the end of the quarter. The company's interest-bearing debt consists only of lease and rent obligations. We also have an unused credit facility of NOK 100 million. Total cash holdings by the end of the quarter was NOK 218.6 million. That concludes the review of the financial performance, and I will leave you over to Gunnar for his final remarks.
Thank you, Erlend. We have now talked you through the quarter. To sum up, the quarter has been characterized by stable production, solid revenues, and progress on our strategic projects. Allow me now to make some comments about the future. With regard to the coming quarters, it is clear that the market outlook is affected by the dreadful war in Ukraine. Given the consequences of war and the fact that both Russia and Ukraine are major iron ore producers, both the demand and the supply of iron ore is and will be affected. Although the geopolitical situation affects the market for iron ore, the handling of COVID-19 in China is the main cause of market uncertainty. Since the potential imposition of restrictions in combination with China being the main global demand driver will reduce the global demand.
For Rana Gruber, it is likely that increased commodity prices will continue to affect the costs of the operations. Still progress with the long-term and strategic products will contribute to maintain solid and hopefully improve the company's product margins. Our production in the remaining quarters is expected to remain at a stable level comparable to that of the previous year. Included in the forecast is a turnaround of 10 days for the entire mine and processing plant towards the end of the second quarter, similar to that of 2021. With our stable production, vast resources, operational excellence, and a solid financial position, the outlook for Rana Gruber remains positive. We will now answer questions from the audience.
Yes. Thank you for the presentation. We have received four questions, and let's start with one question about machineries to be carbon neutral. What risk do you see for delayed deliveries of machineries?
You want me to answer? Yeah.
Yes.
At the moment, the risk is obviously it's the same as with every commodity and product that we order that shipping time and production lines for our suppliers is also affected by the same things that we are affected by. There are uncertainties. How large they are, we don't know. We haven't received any information from our suppliers of heavy machinery that there will be excess delivery time compared to the delivery that they have said to be in 2023. I guess the short answer is that obviously we do see uncertainties, but how big and how long they are, that's still to say.
Yes. We also have another question about the airport. What value will the Rana Gruber get from the new donation to the local airport?
First of all, I would like to say that the airport brings value to our community in Mo i Rana where we operate. That's extremely important for a cornerstone industry like Rana Gruber to take responsibility in that respect. It also brings value to Rana Gruber directly, and it makes easier for us to recruit competent persons from other places in the world, and it will also reduce our travel costs.
Thank you. Erlend, could you say something about the level of cost you expect from the next quarters?
One of the main drivers for our increased cash cost in the period was commodity prices. To speculate how they are going to develop, I don't think I'll go into that. What we can say is that in that area, there is also uncertainty, obviously. It just shows that the long-term focus that we have on reducing costs, increasing the efficiency of our own machineries and manpower, and then constantly trying to optimize the production and keeping the production high, still is one of the key important strategic works that we have to do going forward as well.
Yeah. The last question, what investments are needed to reach the goal of being carbon-free in 2025?
Oh, I can take it.
Yeah. Yeah.
I guess there are three main pillars of investments that needs to be done. The first is the one that we are doing this fall, and that is the replacement, replacing the heating of the underground mine, which historically has been done by using propane, where we are now looking into other alternatives. This is an investment that we'll be doing during the fall. The other one is to substitute the locomotives that today haul our ore from the mine to the operating plant with a CO2 free alternative. The third main pillar is to substitute all of the diesel mining equipment that we have in the mine. There are also stuff like changing all of the passenger cars and trucks and stuff like that.
The three main pillars are the heating, the train, and the heavy equipment in the mine.
That was all.
Mm-hmm. I would like to thank you all for the attention, and I will welcome you back to our next quarterly presentation in August. Thank you, everyone.
Bye-bye.