Welcome to this presentation about Rana Gruber's Performance in the Fourth Quarter of 2022. My name is Gunnar Moe. I am the CEO of Rana Gruber. With me today is our CFO, Erlend Høyen, who will give you additional insights into the financial results of the quarter. I will start today's presentation by giving you a quick overview of the highlights of the quarter. I will say some words about our strategic projects before I go more into depth about the production and the HSE. After this, Erlend will take you deeper into the financial results. Towards the end of the presentation, I will sum up and make a few comments about the outlook before we move on to Q&A. You may ask your questions by using the Q&A function in the webcast solution. We will answer them at the end of the session.
The fourth quarter was a good quarter for Rana Gruber. The strong production trend continued, we produced 460,000 metric tons of iron ore concentrate. While total cost remained stable, the increased production volumes resulted in reduced costs per ton. The production volumes for the year ended at 1.73 million metric tons, the third-largest product-production in the history of the company. 2022 was an exceptional year, where both the devastating war in Ukraine and fluctuating markets affected us all. Raw material prices have been highly volatile throughout the year, including prices for iron ore. In the fourth quarter, prices bottomed out at $79 per metric ton in late October, recovered significantly towards the end of the quarter.
The price increase was primarily due to the lifting of COVID-related restrictions in China, combined with low stocks of both iron ore and steel in the country. Rana Gruber has a strong commitment to development of local communities in northern Norway. We are pleased to see that our social efforts are acknowledged, and in the fourth quarter, we were awarded the Local Jobs and Value Creation Award by the northern county part of the Confederation of Norwegian Enterprise. The financial results in the quarter were also good, and the board of directors decided to pay out dividends of 3 NOK per share. We have paid out 70% of the adjusted net profit as dividends in all the 8 quarters since we became public. The dividend for the fourth quarter is the second-largest. Once again, this confirms our ability to create value to our shareholders.
Finally, we signed a letter of intent with the electric mining equipment supplier Sandvik. After the end of the quarter, we also signed an agreement for a place in the queue regarding production of electrical machines and vehicles and support for the new on-site infrastructure. The partnership with Sandvik plays a key role in our ambition to produce carbon-free iron ore concentrates in 2025. As you know, Rana Gruber is the only iron ore producer in Norway. We have one of the industry's lowest carbon emissions and aim to be the world's first carbon-free iron ore producer. The favorable location of our deposits enables an energy-efficient logistics. As you can see on the map here, the deposits are located only 32 km from the processing plant and port. The deposits are also higher above the sea level.
This enables short downhill transport of the ore to the processing plant and port. This requires minimal amounts of energy. We are well-positioned to lead the mining transition. We have strategic projects to enhance our market position going forward. One of these projects is to increase the minimum iron content in our hematite product to 65%. In the third quarter presentation and subsequent capital markets update, we saw that this is proceeding according to plan. The positive trend has continued in the fourth quarter. Let's have a look at these graphs. The graph on the left-hand side shows the development of iron content in our hematite production in 2022. We see that before the summer, there was no significant development on high variability in the iron content. Here at the vertical line, we had the annual care and maintenance of the mine and processing plant.
During this period, we made small adjustments in the plant. On the right-hand side of the graph, we see that this has already given results. There is both less variability and an upward trend. The graph on the right-hand side shows the development after the annual care and maintenance. We expect that the adjustments we made during the annual care and maintenance will continue to pay off. When we have finalized the upgrade of the processing plant and install all the new equipment, we expect to take the last few steps and produce hematite with an iron content of at least 65%. We expect this to happen before the end of 2024. Some words about the project to become carbon-free before the end of 2025.
Eliminating emissions means that our mining equipment, vehicles, railway, and underground mine heating facility must be electrified or else be replaced with a non-fossil fuel or alternative. This is a difficult challenge, as the machinery needs to handle large and heavy masses of iron ore. We may divide our execution plan in three parts, the underground mine, the open pit mine, and the rail transport. For the underground mine, we have started the gradual process of replacing equipment. We have also started the planning of the on-site infrastructure needed for electrical operations. The new infrastructure involves both an efficient charging structure and safety measures. Even though accidents are rare, the batteries in electrical vehicles are combustible items. The utmost priority for Rana Gruber is to secure the safety of our employees. We will make the investments needed to maximize safety.
We work closely with external advisors and suppliers to identify and plan the best solution for the on-site infrastructure. For the open pit mine, the production in Ørtfjell will continue with today's operations facilities until we have exhausted reserves of the deposit in 2024. Future open pit production in the Stensundtjern deposit will be carbon-free. We have not yet decided whether we will operate the mine ourselves or if we will leave this to external providers. For the rail transport, there is an ongoing project with SINTEF and other players to investigate the pros and cons of electricity-based solutions and hydrogen-based solutions. We expect their recommendation to be finalized in the first half of 2023. In the fourth quarter, we received the first fully electric machine from Sandvik. The machine is a mobile drilling rig and is already in operation.
This marks milestone in the decarbonization program for Rana Gruber. The rig has been operational for several weeks and is performing very well. We also expect delivery of battery-driven vehicle during the next month. Now a few more words about the production of the quarter. As mentioned, the strong production trend continued with iron ore concentrate production of 460,000 metric tons, up from 435 metric tons in Q4 2021. The production increase was partly due to the continuous work to improve capacity of the processing plant. It was also due to operational adjustments ensuring a more stable quality of the ore transported to the processing plant, as this enables better utilization of the plant. Hematite concentrate amounted to 435,000 metric tons.
We also produced 25,000 metric tons of magnetite concentrate and 1,600 metric tons of Colorana. Due to the timing of shipments, the volumes sold in the quarter were moderate compared to the volumes produced. We have stored masses of product produced volumes. These volumes will be shipped in later quarters. The amounts of stored volumes are expected to normalize during the first half of 2023. Now a few words about HSE. We always target zero injuries related to the production, and we have tailored safety measures providing a healthy work environment or at Rana Gruber. Sadly, there were two production-related injuries which led to short-term absence from work in the fourth quarter. The first incident occurred with an employee was emptying a wagon, and resulted in a broken jaw.
The second incident occurred when an employee disembarked from a loader and resulted in a broken arm. Both incidents were handled according to procedures, and we have implemented measures to prevent similar incidents from happening in the future. Safety is our utmost priority, and we will continue to focus on the safety of our employees in 2023. Leave the word to Erlend Høyen.
Thank you, Gunnar. Firstly, in the fourth quarter, we made change in the accounting principle related to hedging of electric power. We have always hedged a part of the volume of electric power purchased. This has been done actively by our power supplier on our behalf. Previously, this has helped to smooth out the volatility in electricity prices. At the end of 2022, the company, together with the board chose to lock in the financial gains that the positions gave during the rapid increase in the electricity prices. This was done for Q4 2022 as well as most for most of the expected volumes for 2023, and a small portion of the volumes for 2024.
In the fourth quarter, this resulted in a large realized gains in addition to large unrealized gains for the portfolio for 2023 and 2024. We therefore chose to change the accounting principles related to hedges of electric power. Previously realized gains were added to the OPEX, while unrealized gains were excluded from the results. Now and going forward, both realized and unrealized gains are included under other financial gains and losses in the P&L. The unrealized figures will be adjusted for and will not have any effect on the adjusted net profit and on the DPS. This is in line with our dividend policy and our other financial hedges. The definition of cash costs has also been changed in line with the change in accounting principles. The cash cost now includes realized power hedges.
Please see the appendix in the financial report with the APMs to see the new definition and calculation of cash cost. The results in the quarter came in at NOK 382.8 million, up from NOK 276.4 million in the fourth quarter of 2021. This increase is partially explained by higher realized prices on shipments done in the third quarter since the final settlement of these were based on higher prices than those underlying the reported revenue in the third quarter. The increase in revenue is also explained by reduced freight costs and a weaker Norwegian currency since concentrates are sold in euros and US dollars. The cash cost ended at a total of NOK 206.8 million.
This corresponds to 448 NOK per metric tons produced, down from 472 NOK per metric tons produced in the fourth quarter of 2021. This reduction in cash costs per metric tons produced was driven by the increase in production, which Gunnar has already mentioned, and realized gains on electric power hedges. The cash cost level is slightly above the previous quarter, but still below the average for the entire year. The operating profit ended at 168 million NOK, up from 97.5 million NOK in the fourth quarter of 2021, and this increase is explained by the increased revenues and a positive change in inventory as well. Now let's have a look at the EPS adjustments for the quarter. Sorry.
In accordance with 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 our hedging portfolio in iron ore, foreign currency. Now from Q4, the adjustments also include adjustments related to the portfolio of electricity hedges. The board of directors can also adjust for extraordinary events which are not part of our core business. In the fourth quarter, the pre-tax profit was adjusted with positive NOK 94.9 million related to unrealized changes in the value of the iron ore hedges, negative NOK 95.4 million related to unrealized changes in the value of the hedging portfolio of US dollar and negative NOK 140.5 million related to the unrealized changes in the hedging portfolio of electricity.
For more information about these adjustments, please see the APM in the appendix in the financial report. The adjusted net profit amounted to NOK 158.1 million, which gave an adjusted EPS of NOK 4.26. Based on this, the board decided to pay out a dividend per share of NOK 3 for the quarter, and as Gunnar has mentioned, this is the second-largest dividend distribution we have made since we became public. Let's finally look at our cash flow and the financial position. The total cash flow from operations amounted to negative NOK 9.8 million for the quarter. CapEx for the period was NOK 67.1 million. NOK 45.2 million of this was development CapEx, and NOK 21.8 million was related to maintenance CapEx.
Of financial activities, NOK 38.9 million was payout of dividends for the third quarter, and NOK 10.1 million was payment of principal portions of the lease liabilities. In sum, the total cash flow for the quarter was negative by NOK 125.9 million. Some quick notes about our financial positions. After dividend distributions for the second quarter of the year, our equity ratio was 57.8%, and the total cash holdings by the end of the quarter and year was NOK 213 million. This concludes the review of the financial performance for the quarter, 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 4th quarter. To sum up, the quarter was characterized by a continued strong production trend enabling reduced cost per ton iron ore concentrate, an important agreement with Sandvik, and the 2nd-largest dividend distribution since Rana Gruber became public. Allow me now to make some comments about the future. The long-term market outlook for iron ore remains positive. We have seen that the lifting of restrictions in China has led to a positive price momentum in the 2nd half of the 4th quarter of 2022 and the beginning of 2023. The market demand may also be volatile in the short term due to turbulent global economic situation. The entire world steel production is heading quickly in the direction of reducing carbon footprint.
Rana Gruber's ongoing strategic projects to eliminate carbon emissions from the operations and to improve the product quality support this direction. The completion of these projects is also expected to enable higher prices for our products and contribute to solid product margins. We will continue the insourcing of work streams in 2023. The insourcing is expected to reduce costs, improve cash flow predictability, and secure operational stability. Far, our work with insourcing is proceeding according to plan. It is pleasing to see that Rana Gruber attracts talent. We are entering a new year with confidence and great progress. Our positive production trend and progress with strategic projects provide a promising foundation for 2023. Our continued focus on efficient operations enables a low financial leverage, which enables a strong cash generation.
This again enables us to fully fund a CapEx through operations and to create value to our shareholders. In 2022, we were able to pay out 228.8 million NOK in dividends corresponding to 6.16 NOK per share. We expect to be able to continue to pay out solid dividends to our shareholders also in 2023. We will now answer questions that you may still send questions during this session. You are also welcome to send us questions to our IR email at any time.
Thank you, Gunnar and Erlend. We have now received some questions, and I will start one to you, Erlend. For the first 4 electric vehicle, Enova covered 15% of the booked value. Is that a rate you expect to see for the remaining fleet as well?
Yes. We expect support from Enova in accordance with their guidelines, which say 40% of the excess costs of a electric vehicle compared to a traditional mining vehicle. I guess going forward, it won't be exactly in percentage the same since the prices for the different vehicles fluctuate a bit. Yeah, in line with the guidelines from Enova, and as we have had on these 4 first vehicles.
Thank you. The next questions go to you, Gunnar. What factors do you think will affect the market for prices of iron ore in 2023?
As always, the prices for iron ore is set in China, and what happens in China then immediately reflects on prices in iron ore. There is geopolitical uncertainties in the world, which is unpredictable. The signals from China is that the stocks of iron ore is lower than they used to be at this moment. Also the stocks on finished steel is lower than they used to be. If you combine this with measurements from the Chinese government to increase production in the building of new houses and infrastructure products, we are optimistic of 2023.
Thank you. The next one goes to you, Erlend. The strategic project requires a lot of investments. Will you be able to continue to pay out dividends?
The short answer is yes. That is our plan, to both cover CapEx through operational and support functions as Enova. Leasing, we have leasing frame agreements for vehicles, and at the same time, we expect to be able to continue our dividend policy in the years to come.
I think you answered the next question as well there, but how will you finance the CapEx related to the Sandvik agreement?
The vehicles will be financed both through leasing agreements, cash from operations and support from Enova is our expectation.
The last questions, I think, when will the next update about Fe65 project be?
As we mentioned in the capital markets update in November, we will give you an update of the status of that project in the second half of this year.
Thank you. That's all from my side.
Thank you everyone for listening.
Have a nice day.