Welcome to this webcast presentation about Rana Gruber's performance in the second 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 high insight into the financial results of the quarter. I will start today's presentation by giving you a quick overview of our business. Then I will move to the highlights and production of the quarter before Erlend takes you deeper into the financial results. Towards the end of the presentation, I will come back to sum up and make a few comments about the 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 this session.
Rana Gruber is the only iron ore producer in Norway. We are located in Mo i Rana and have about 300 employees. Our operation consists of three separate activities. The first is mining of iron ore from local open pits and underground mines. The second is railway transportation of iron ore from our mines to our processing plant. The third is isolation of Hematite and Magnetite in the processing plant. Our annual production capacity is 1.8 million tons of iron ore concentrate. We currently have 440 million tons of iron ore resources available, which translates to 80-90 years of mining operations. We are also working to extend our resource and reserve basis even further. We have three products, Hematite, Magnetite, and Colorana product. Hematite accounts for more than 90% of our total production. All our products are exported.
We take our environmental footprint seriously, and in 2021, we had one of the lowest carbon emissions in the industry with 9.29 kg CO2 equivalents per metric ton produced iron ore. The goal is to be entirely carbon-free by the end of 2025. Our hematite, magnetite, and Colorana are utilized for a variety of products. We have an offtake agreement with Cargill for our entire hematite production, which as mentioned, amounts to more than 90% of our total production. Under this agreement, Cargill, which is one of the world's largest commodity traders, is committed to buy and market our hematite. Having a leading market position, Cargill is able to identify the right buyers and the best prices. Currently, our products are distributed to three major European steel producers.
After Cargill has sold our hematite to steel producers, it is utilized for processed steel, which again is utilized for cars, buildings, wind turbines, and many other things besides. Our magnetite is used for water, for example, for water treatment and cosmetics, and is bought by participants within the chemical industry, mostly related to European water purification industry. Finally, Colorana is used for both colorants and highly advanced products such as brake linings, magnetic stripes, and chemical processes. Customers for Colorana are within a diverse group of industries or market segments such as concrete, paint, and plastics, the automotive industry, heat management, and toner production. That was a brief overview of our business. Now some words about the second quarter of the year. The production of iron ore concentrate remained stable and amounted to 393,000 metric tons.
The annual care and maintenance of the mine and processing plant was conducted this summer successfully and resulted in the replacement of various wearing parts. It also involved preparations for the installation of new processing equipment to bring us closer to the goal of increasing the average iron content in the hematite products from 63%-65%. All of our activities were conducted with no related injuries. This shows again that our tailored safety measures have been successful. The revenues of the quarter came in at NOK 294 million. The adjusted net profit amounted to around NOK 80 million, and the board of directors decided to pay out a quarterly dividend of 1.51 NOK per share, which gives a payout ratio of 70%. Now a few more words about the production of the quarter.
As mentioned, the iron ore concentrate production totaled 393,000 metric tons, which is in accordance with the planned production and indicates a stable production level. Hematite concentrate amounted to 370,000 metric tons of the produced volume. In addition, 23,000 metric tons of magnetite concentrate and 1,200 metric tons of Colorana were produced. In the second quarter, we also started the development of the next mining level, which provides a solid foundation for continued stable production and is expected to be in operation in 2024. In the quarter, we started the insourcing of various work streams. We conducted our first in-house exploratory core drilling, which was previously handled by external providers. The purpose of the core drilling is to determine the properties of the rock masses in order to increase the resource and reserve bases.
We expect to be able to provide updates on this work in the first half of 2023. We also started the process of insourcing the development of new mine tunnel infrastructure. The first step of this process is the order of related machinery expected to arrive in 2023 and the recruitment of key personnel. Both of these tasks were initiated in the second quarter, and we will continue this work in the third quarter. The insourcing of work streams is expected to have several long-term benefits. Firstly, it is expected to reduce costs and improve margins over time. Secondly, it is expected to give more cash flow predictability since we will avoid business cycles in the construction industry.
Finally, our insourcing of work streams will contribute to operational stability since we will have more influence on the terms and conditions of the workers needed. I will now leave the word to our CFO, Erlend Høyen, to take us through the financial results of the quarter.
Thank you, Gunnar. Hello, everybody. First, I want to remind you that the financial results displayed in the presentation are based on IFRS, in contrast to the NGAAP-based results of presentations for 2021. The historical results in this presentation have therefore been restated in accordance with IFRS. For more details regarding the transition from NGAAP to IFRS, please see our annual report for 2021. As Gunnar mentioned, revenues in the quarter came in at 294 million NOK. This is 57% lower than in the second quarter of 2021. The revenues were impacted by market prices of iron ore, which were almost halved from the same period last year. This is displayed in the curve on the right-hand side of the slide.
The revenues were also impacted by higher freight rates than in the second quarter of 2021. Since we deliver our main products FOB, the freight rates are a part of our pricing mechanism, rather than being recorded as costs in the accounting. The cash cost ended at a total of NOK 197 million, which corresponds to 500 NOK per metric ton produced. Although higher than last year, this is an improvement vis-à-vis the previous quarter in 2022, which had a cash cost of 558 NOK per metric ton produced.
The high costs were due to inflationary pressure on wages, higher prices for example, diesel, explosives, and steel, as well as expansion of our personnel base in order to cope with administrative work and the work on our strategic projects compared to the 2021 figures. Combined, these factors impacted the operational profits, which decreased by 85% compared to the second quarter of 2021, giving us an EBITDA of 81 million NOK. So much for our revenue, cash cost, and operating profit. Now let's have a look at the EPS adjustments for the quarter. According to our dividend policy, the adjusted net profit is based on the IFRS net profit before tax. This is then adjusted for the unrealized gains and losses from the company's hedging portfolio in both iron ore and foreign currency.
The adjustments will therefore relate to the positions with maturity 3+ 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. This adjustment that we do on net profit is necessary to enable a more accurate evaluation of our performance for the given quarter, excluding accounting effects from fluctuations in factors which does not relate to the performance of the current quarter. For more information regarding this, please see the appendix in the quarterly reports.
In this quarter, the pre-tax profit was adjusted with NOK 100.4 million related to unrealized changes in the value of the hedging portfolio of both iron ore and US dollar with maturity 3+ months after reporting date. This resulted in an adjusted net profit amount of NOK 79.9 million, which gave an adjusted earnings per share of 2.15 NOK. Based on this, the board of directors decided to pay out dividends per share of 1.51 NOK for the quarter. Let's have a look at our cash flow and financial position. The total cash flow from operations amounted to NOK 272.7 million. CapEx for the period was NOK 29.8 million. NOK 22.8 million of this was related to development CapEx.
4 million was related to maintenance CapEx, and 3 million was related to expansion of office buildings. Of financing activities, NOK 77.5 million was payout of dividends for Q1, and NOK 5.8 million was payment of principal portions of the lease liabilities. In sum, the total cash flow for the quarter was positive by NOK 159.6 million. Now briefly about our financial position. Our interest-bearing debts toward financial institutions only consist of lease and rent obligations. Apart from this, we still have no long-term debt toward financial institutions, and we still hold an unused credit facility of NOK 100 million. After dividend distributions for the first quarter of the year, our equity ratio was 49.9%, and the total cash holdings by the end of the quarter was NOK 378 million.
That concludes the review of the financial performance, and I will leave the word back to Gunnar for his final remarks.
Thank you, Erlend. We have now given you an overview of the second quarter. To sum up, the quarter has been characterized by a stable production, successful care and maintenance of the mine and processing plant, and no injuries stemming from activities in our operations. Allow me now to make some comments about the future. Iron ore is essential to build modern societies, and the long-term outlook remains positive. In the short term, the market demand may be more volatile, especially due to the handling of COVID-19 in China. China is the main global demand driver. We have seen the COVID-related restrictions have reduced the global demand. For Rana Gruber, it is likely that higher commodity prices will continue to affect the costs of the operations.
Even if governments manage to reduce global inflation, sources of uncertainty include the geopolitical situation in Europe and East Asia, the European energy market, and challenges with the global supply chain. Still, a continued stable production and progress with our long-term strategic projects is expected to contribute to solid product margins. With stable production, vast resources, strategic offtake agreements with Cargill, a solid financial position, and investments in strategic projects, the outlook for Rana Gruber remains positive. Thank you.
Yes. We have received the three questions from the audience. I will take the first question to you, Gunnar. What do you expect to get out of the exploration drilling?
As a mining company, exploration drilling is a part of the continuous operations. Our goal is, of course, to increase both the reserve and resource bases, and we are quite optimistic that that will also be the result of the drilling campaign.
Thank you. The next one goes to you, Erlend. How will you explain the high cost of the quarter?
I guess that the high cost is something that we struggle with as well as the industry and all producers as a total with the inflation that we see these days. What we can say is that we have shown, compared to the last quarter, that given a stable production and a good production and being able to constantly trying to increase the efficiency of our production, we are able to improve on our cash cost per metric ton, which at the end of the day is the most important key figure for us, cost-wise.
Obviously it puts pressure on us to always stay on our toes and constantly to look into how we are able to either reduce costs or increase productivity in areas which brings the cash cost per metric ton down.
Thank you. Gunnar, what factors do you think will affect the market for iron ore in the remaining quarter of the year?
In the remaining quarter of the year, I'll still expect that will be affected by the situation in China first, with the unpredictability to forecast when they will ease on the COVID-19 restrictions. That may affect our prices for iron ore, and the geopolitical situation in the world as well is unstable. In the long term, we still have a positive outlook.
I received one more question. Erlend, could you say something about when we are going to say something about the strategic projects?
Yeah. In Q1, we announced that by the end of the year we will come back to the strategic projects.
Thank you.