Ladies and gentlemen, I'd like to welcome you to Boliden's Q4 2024 Results Presentation. My name is Olof Grenmark, and I'm head of Investor Relations. Today we will have a results presentation led by our President and CEO, Mikael Staffas, then followed by our CFO, Håkan Gabrielsson. We will also have a Q&A session, which we will start here in Stockholm. Mikael, welcome.
Thank you, Olof. And good morning, everybody, from me as well. To a lovely morning here in Stockholm with lovely weather. Let us just jump in very quickly into the presentation here and the highlights. And of course, it's a very strong set of numbers that we are presenting today. We have a profit of SEK 3.8 billion. In there, there is a one-off insurance claim, as most of you will be aware of, of SEK 935 million. We also have very strong cash flow. To some extent, we can be proud about this because, to some extent, we have worked to reduce cash from working capital.
But also, as most of you will know, who have been with us before, this is also very much of a timing issue where our cash flow is very volatile, and we now manage to catch a point where it was very good for the end of the quarter. We've had very strong production in our smelters, especially in Harjavalta and in Kokkola. Harjavalta is full of all kinds of production records during the quarter, and also Kokkola has a very stable production. The dam project in Aitik is completed. And this is, of course, something that is very important, not just because it's a SEK 5 billion project, a very big project that is now completed on time and on budget and with the functionality that we have now gotten proof with external inspection that it's all under control.
But it's also good because, generally, it's something that Aitik has been affected by during the time, even though the direct effect might not have been there. It's something that has been a stress on the organization to make sure that this one happens. And now it feels good that we know that we have our Aitik around for the next 20 plus years. In the quarter, we've also announced the acquisitions of the Lundin mines in Neves-Corvo and in Zinkgruvan. And we'll come back a little bit about that later as well. The dividend, we, from the company, have decided to recommend the AGM to cancel the dividend for this year. That in itself corresponds to roughly half of the suggested share issue to get new equity to finance the acquisition. So that means that a future share issue will be reduced in the corresponding amount.
So if we look at the financial performance, as I said, SEK 3.8 billion, the free cash flow very strong at over SEK 4 billion. Håkan will come back and dwell more in detail on these numbers. CapEx in the quarter, SEK 4.5 billion. That means that we're landing the full year at SEK 15 billion, slightly less than we had guided for. That's a little bit of a timing effect around New Year's. So that half billion will come back, and we've increased the guidance for 2025 to SEK 14 billion, but the sum of 14 and 15 is unchanged. On our key projects, the Odda expansion is moving ahead for starting production here. Actually, as of yesterday, we had another smaller milestone there where we had the first zinc coming out of the new foundry. So the new foundry is now completed.
We also have, since before, the tankhouse completed and all the general infrastructure completed. Leaching is very close to completion. It is a roaster that has been our sore point throughout the project, and we're moving on with that one. And those of you who will join us on the Capital Markets Day and on the inauguration of Odda in mid-March will learn much more about it then. Dam reinforcements, I already said, is completed on time and budget, and it's great to have that one off. The Kristineberg expansion is moving ahead according to plan. We've had, during the quarter, the breakthrough of the new transportation infrastructure, which is now being put in place, and the trolley system inside is being put in place for being able to get this one by the end of Q1 or early Q2, get the new full electric infrastructure in place.
The Rönnskär's tankhouse, as you can see here on the picture, is moving along nicely. The groundwork is completed. Building construction, as you can see, is in progress. Still on time for ramp-up in the second half of next year, 2026. So that one's moving on well. The Boliden Area extension is also well underway as well, started with the paste projects there. And the Tara restart has also gone well and is now up and producing. On the ESG side, the greenhouse gas emissions tons are lower than last year. So we're moving this one, and we're generally keeping our plans regarding our science-based targets for 2030. We had also a very good quarter regarding lost time injury frequency of 2.3. As you know, earlier this year, we've been struggling a little bit with that.
With this kind of good end of the year, it means that the full year of 2024 is still reasonable. The sick leave is also moving in the right direction. It's coming down quite slowly, and we're not yet back to pre-COVID levels, but we're moving slowly in the right direction. On the market side, the base metals have done relatively well. Zinc prices are up. Copper prices are relatively flat on a level that is quite decent. There are lower nickel and lead prices. But of course, what helps us quite a lot, and it's been very strong during the quarter, is the very strong gold price. There are pressures on the TCs, not so much affecting us right now because we're basically very much on benchmark TCs. But of course, looking forward, as these TCs, benchmark TCs, will be settled for 2025, will impact us.
We have had also slightly stronger U.S. dollar compared to the Swedish krona and the euro in the fourth quarter. So when you look at this totally, you can see that the copper price is still quite high compared to where the cost levels are in the world, which means, of course, there is a downside risk to the copper price. But as many of you know, there is also an upside chance on the copper price given the demand development, and we feel good about the copper price. Zinc price, we feel maybe even better about. As you can see here, there's not so much downside risk given where you have the cost curves in the world. And of course, zinc is also a very much needed metal for the energy transition. Nickel is maybe the metal that we are right now a little bit more concerned about.
You can see here there is a strong cost decrease in the nickel world. Everybody's very heavily responding to the low nickel price. It's a little bit unclear if there will be any kind of new developments on the nickel side going forward given the low nickel prices. If we go back to Boliden and look at our production, we can say that we've had stable and good production in Kevitsa. And even though we have lower milled volume in the Boliden Area and lower grades, it's of course very good in general. It was Q3 that was extremely good for the Boliden Area. We've also restarted Tara. Garpenberg has moved ahead and produced as much as we can, making sure that it keeps within the environmental permit that was in place for the year.
And Aitik did not have a very good quarter, as you can see, 10 million tons, which is a little bit more than 10% less than what it should be in terms of throughput. We have been hampered by all kinds of smaller problems and also the impact of the project finishing off at the same time. Grades are quite in line with what have been guided for. On the smelter side is, of course, Harjavalta that is pointing out. Harjavalta has record production on the cathode side, on the copper side, record nickel and matte production as well. Also Kokkola, very strong and stable production in the quarter. Odda, to some extent, struggling a little bit. This is, of course, not easy to run an operation when you have a big project at the same site at the same time.
But as I said, during the quarter, the tankhouse was commissioned, number six. And as I said before, after the quarter, in the beginning of this quarter, we've also commissioned fully the foundry. Bergsöe had also strong production. Rönnskär is, of course, being affected by the fact that we don't have a tankhouse. But given that constraint, it was also a strong production in Rönnskär. Now I'll leave it over to you, Håkan, for the financials.
Thank you, Mikael, and good morning. As you've seen, we've released a quarterly result with good numbers, SEK 3.8 billion EBITDA excluding process inventory. That includes an insurance revenue of SEK 935 million investments, just shy of SEK 4.6 billion, which means that we finished the year at slightly lower CapEx than our guidance and a strong free cash flow at SEK 4.3 billion. Earnings per share, SEK 10.95 in the quarter. A strong fourth quarter. Looking at business areas, we had a mine EBITDA of SEK 1.1 billion, almost 1150. Mikael talked about some headwind operationally in Aitik. We also had a limitation in the milled volume in Garpenberg due to the environmental permit, and the impact of that was about SEK 350 million in the quarter. Boliden Area came in a bit lower on grades than the previous quarter, but still on a very healthy level for gold. Very strong quarter for smelters.
Also, if you back out the insurance revenue, we had a strong quarter in Finland, above all with a very good feed mix. And we were also successful in reducing intermediate inventories, which contributed to the results. Inventory reduction also contributed in the form of other and elimination. That's the internal profit elimination, which was positive. If we then look at some more detail year on year, Q4 of this year compared to, or Q4 of 2024 compared to Q4 of 2023, we had a strong improvement in prices, SEK 1.3 billion up. In particular, gold, silver, and zinc had a positive development. Also, the dollar moved in the right direction, but it was partly offset by lower metal premiums and treatment charges, but a strong development of prices. Volumes were up. We had a restart of Tara, which added about SEK 200 million to the volumes.
Again, we also had strong production in the Finnish smelters, as I talked about, and reduced inventories and internal profits and so on. Costs were high in the quarter. Again, the restart of Tara, of course, increased the cost SEK 180 million. In addition, we had higher personnel expenses. There are some year-on-year inflation. We also recorded some M&A cost in the quarter, which we write about in the report. Year on year, there is also an effect of a mining tax that we have in Finland and a higher exploration spend that we've decided. And the items affecting comparability, of course, is insurance in Rönnskär. And that adds up to a SEK 3.8 billion result. Moving on to a sequential comparison, we have again a good development of prices.
Here, it's primarily the dollar that contributes, but there is also a positive effect of higher zinc and precious metal prices. Furthermore, we had a positive impact from the provisional pricing adjustments, what we sometimes refer to as MAM month after month, well, MAM adjustments of plus 100. Volumes were more or less flat, where we had lower milled volumes in Garpenberg, for example. That was offset by a strong end of the year in Finland. Again, high costs, restart of Tara. We had higher personnel costs. There is a significant seasonal amount here. We talk about 200 million increase normally comparing Q4 to Q3. We saw that also this year. Finally, some M&A expenses. Cash flow. It was a strong end of the year. One important part is the release of working capital. There is a seasonality.
I mean, we released SEK 3.7 billion this year, and you can see in this table that we released SEK 3 billion last year, which, by the way, was also a good quarter, but there is also, it's not only seasonality. There is some good developments of intermediate stock and so on. In here, we've got about SEK 200 million insurance payments that we received in the quarter. I should perhaps also comment the paid tax, which is fairly low, but as you know, there is always a lag in the paid tax where we pay preliminary taxes, so we will catch up to a normal level on that, and that means that we end the year with a robust and strong balance sheet, a net debt of SEK 10.7 billion, which is on par with where we were a year back, and a net debt to equity ratio of 16%.
This is also a time of the year when we talk about the full year results, and you can see detail per site in our report. We improved the profit from just below SEK 8 billion to SEK 12 billion. Prices and terms helped a lot. We had a strong development of prices during the year. We also had higher volumes. Costs increased slightly on an overall level, and in that cost proportion, we had a limited impact from inflation, and we had a positive impact from Tara being in care and maintenance a larger part of the year, and then we had cost increases to some extent on other areas. Going through the two business areas on mines, we improved the result from SEK 3 billion to SEK 5.2 billion. The main explanations are higher grades, improved prices and terms, stable mill volumes, and then on the downside, Tara being in care and maintenance.
Running through the sites briefly, Aitik had operational headwinds during the year and lower grades. Boliden Area, just want to highlight that's an impressive number and a really, really strong result, helped both by good gold prices, but also good production and good grades in gold. Garpenberg, strong production, Kevitsa, improvement of grades, and then Tara in care and maintenance. Looking at the smelting side, SEK 4.4 billion-SEK 7 billion, and there, of course, we have SEK 3.3 billion in insurance revenues and insurance income in there. Prices and terms are affecting on the negative side with lower treatment charges, mainly affecting the zinc smelters. Running through the sites, Rönnskär, as you see, has a weak profitability if you back out the insurance, and that is, of course, a result of the fire. Harjavalta, really impressive numbers, good production records in the quarter at least, and a good development of metal prices.
Kokkola and Odda , Kokkola has impressed with production over the year, as usual. I'm almost saying, but there has been a tough year price-wise for zinc, and Bergsöe, relatively good. So with that, Mikael, if you want to continue.
Thank you, Håkan. Let's also focus a little bit on the thing that we maybe don't talk too much about during the year, but it is, of course, the fundament for what we're all doing, which is the exploration. And just to go through a little bit what we have done during the year, in Sweden, our exploration projects are generally moving on well. In Aitik, we've had continuous and positive developments regarding Nautanen. In the Boliden area, we've had impressive, or I would say promising results from some of the central and the western parts of the Skellefteå field. And in Garpenberg, and we'll come back to the numbers, we've had a large increase in mineral resources and promising results at depth on the drilling that we're doing. In Finland, we've been focusing on high potential zinc systems, also with relatively good progress.
On Ireland, we have restarted our exploration activities again, and here we're focusing on 3D seismics around that in the proximity of Tara and Tara Deep. In Canada, where we are spending part of our exploration budget, we've had good progress on the collaborative projects that we do have. We also started up some own claims in our own name, also starting more exploration in Canada on that. Coming over a little bit more to the numbers, Aitik has a relatively limited update still for till 2048; the reserves, reserve grade the same at 2023. The Boliden Area, we've had a two-year expansion in terms of reserves from 2031 to 2033 with the expansion projects that we're doing.
In Garpenberg, the reserves are now fully covering production until 2056, so that's another two years there as well, slightly lower grade, a little bit less grade in those reserves. Tara is back in production. There hasn't been really any updates on the reserves there. Kevitsa, we had released beforehand, so you've seen that, but also there we have a three-year extension of the life of mine from 31 to 34, given that we've managed to add back quite a few tonnage that were lost last year, which was due to dam construction issues, and the grades, same for copper, but increased for nickel. Looking to the right is, of course, maybe the most interesting to look at, and maybe the things that you don't look at first are the ones that are really the most interesting.
If you look at the Boliden Area, 10 years ago, it was nine-year life of mine. After 10 years of hard mining, it's still nine years life of mine. The ability to add one year per year has proven to be very strong, and we hope to be able to continue that, of course, and we have very good reason to believe that we can do that. Also, Tara, 10 years ago, it was six years life of mine. Today is still six years life of mine. Then you can see Aitik, not so much change, a little bit less, and Garpenberg, the very strong results that we had, not just this time, but over the several last few updates of the mineral reserves.
If you look over to the resources side, the Aitik, we have a slight upgrade of the, sorry, a slight decrease of the resources, not so much change there. And we have a slight increase in the Boliden area, but then Garpenberg, the very strong increase of about 35 million tons that's coming in there. That's if that were to be successful, that's a 10-year expansion in the present production speed. Tara, there are no new estimates as of right now, and Kevitsa, as I said before, or there are also increases in the resources. And then we've also had some updates on the projects, and you can see them as you look into the details in the presentation. Just to remind you, everybody, the key terms for the acquisition of Neves-Corvo and Zinkgruvan, this is no change from what we've said when we announced this in December.
It's $1,300, payable upfront on a cash and debt-free basis. It's a maximum of $150 million contingent price, dependent on the zinc and copper price during this time period. Closing is expected sometime in the mid-2025. It's subject to customary regulatory approvals in Sweden, Portugal, and in the EU. The financing, just a little bit on that one. The upfront cash consideration is fully funded by a bridge loan. The bridge loan will be refunded in due course, and here's then a little bit of a difference between what we said in December, roughly 50% debt that is still true. We have 25% that will be covered by a share issue, and then 25% that will be covered by the canceled dividend as we have announced today.
We have the extraordinary, or we had the extraordinary meeting of shareholders on January 23rd that gave the mandate for the board to do a share issue, either as a direct issue or as a rights issue. This share issue is expected sometime in the next six months, and we will time that depending on many things, including market conditions, but also exact timing of when we can close the actual deal, and the Boliden existing SEK 850 million revolving credit will be untouched. It's expected to be untouched. Looking at the outlooks, I alerted a little bit to this beforehand, SEK 13 million , SEK 14 million for 2025, SEK 500 million more than we had said before, but the total of 2024 and 2025 is unchanged.
Smelter plant maintenance. 2024 was a low maintenance year. 2025 is, you can say, a mid-maintenance year with about SEK 500 million in EBITDA effect. And then we have strikes in Finland. The situation is not resolved. We do not have a collective bargaining agreement on national level in place yet. But what we've seen so far from strike actions in Q1 has roughly affected us by SEK 100 million negatively. As of right now, there is no strike action, or well, there is actually some, but no major strike action ongoing, and the negotiations have resumed, which we feel good about. Hopefully, we'll also be able to find a solution to this situation. And just to be very clear, this is no specific Boliden. This is very much part of the national negotiations in Finland on the collective bargaining side.
On the grades that you see down there, there are no changes whatsoever for the guidance for 2025. With that, Olof, over to you.
Ladies and gentlemen, that opens up our Q&A session for the fourth quarter of 2024, and we will start here in Stockholm. Ola Södermark, Kepler Cheuvreux.
Thank you. Is it working? Yes, it is. Thank you. Just a question on Aitik and how we should view the mill tonnage during 2025. If it's going to be easier to ramp it up now when the dam project is completed, or how we should view it, also the seasonally harder Q1?
Yeah, I think that you to some extent summarized it yourself. There is always a seasonally harder Q1, so that one should be taken into account. The fact that we have been able to do the dam construction and finish that one should ease up, although that will not happen right away. So you can maybe, hopefully, we'll have a ramp up of the throughput in Aitik over the year.
But Q1, should it be better than the fourth quarter because it was quite low?
Yes. Yes.
Okay. And then to Garpenberg, the permit, the timing of when you can receive the permit to increase the production there? Is it possible to say?
We hope that we will get it before the end of the year, but we're not sure. Just to be very clear on the kind of legal point of view, this is not a new permit. This is a change of an existing permit. It should be possible to get that through during the year. Then we will also need to apply for a new permit in Garpenberg very soon, which is linked to things after 2030. But just to get the increased production to four and a half is an application for a change of an existing permit.
Just the last one on smelters. It was a very good quarter for smelters. Looking into next year or this year, the terms are slightly weaker, but on the other hand, precious metals are very strong. How much of the really good Q4 was related to precious metals compared to the quarter before?
I don't know the exact number, but it's been a relatively large part given the very good production that we had also in Harjavalta, of course, drives up free metals.
Thank you.
Christian Kopfer. Handelsbanken, please.
All right. Thank you very much for that. So a few questions from my side. Firstly, I think, Mikael, you mentioned the operational headwinds that you had in Aitik, so except for ramping up production. What actions are we taking to make that a better mine in 2025?
We're doing quite a lot of things around the topic, including that we have a new general manager, so that is that, and also the fact that we should be able to get the AHS system to work out fully, the automatic hauling system that we have been working with during the year and that has been commissioned but hasn't worked fully perfectly during 2024, should be able to work better during 2025, so those are some of the actions that are in place.
All right. Then on treatment charges, they are obviously coming down even though contract terms are better. And in your, I think, long-term prices, they are substantially ahead of where we are right now. In your view, what should take treatment charges up next couple of years?
I think over time, of course, time will tell, but the fact that both for zinc and for copper, there is an increased demand for metal in the world means that you also need to have increased smelting, which means that at some stage there will also be a lack of smelting capacity, which also typically rebounds these conditions. So I think that that's one of the areas of it is. But then, of course, another thing is it all depends what you think is going to happen with gold. As long as gold is this high or maybe even higher, of course, treatment charges will be under pressure.
Yeah. I agree on the demand side, but so you don't expect supply to continue to come up in China then?
I think there are, you know, I think that over time, I don't think that we're going to see much pure metal coming from China into Europe, so it's more a question of what will happen with capacity in Europe and of course, with these TCs that are being shown now, especially maybe more crucial on the zinc side because there is not that gold credit on the other side. You know, who knows if we can't see, we'll see some curtailment of capacity as well.
All right. Then Håkan, on the insurance payments, can you just remind us how much is still expected to be paid cash wise for?
Sure. If we break it up in two parts, we've got a confirmation of a primary insurance of 2.4. Out of that, one is paid, 1.4 is for 2025, and my best guess is that it would be evenly split by quarter. It is connected to the pace of the expansion project or the rebuild project in Rönnskär, so it might vary a bit, but best bet is 350 per quarter. The other 935 that has been confirmed in the secondary insurance, we haven't concluded fully on the payment plan. I think a substantial part of it will be paid in 2025. There will be some spillover to 2026 as well.
All right. That's great. So then finally, then on those, we obviously be very positive for you in terms of cash flow. Then your net debt to equity was 16% by the end of the year, right? So it's even below your 20%, which normally means that you pay an extra dividend. I think it was the right choice to cancel it. But on the other hand, if you look further out throughout this year, I really don't see a need for an equity issue. I mean, obviously net debt will go up, but on the other hand, equity will go up as well, right? So why is that so important for you to take in new cash?
No, I think it's, of course, when we model things also in downturns, we need to make sure that we don't have a too stretched balance sheet and we have very clear targets around that, and if things move along according to our plans, there is still a little bit of a gap to where we want to be in terms of the strength of the balance sheet.
Can you just, how much will equity go up with the new mines?
With the new mines, I mean, what happens initially is that on the balance sheet, you get similar amounts debt and equity.
Okay.
I think we need to move on.
Okay. Okay. Thanks.
Johannes Grunselius, DNB Markets, please.
Yes. Thank you. I have two questions, but on the details on the reserve report, I note that the proven part of the 2P reserves at Aitik came up from 0.18 to 0.20. And I think you have like four years of production in place there relative to full speed at Aitik. But should one do an interpretation that you're reaching higher grades now? I mean, a confirmation of that, can you just elaborate? Or is it like more a random walk why the grade went up in the 2P reserves?
No, it is. Even though it's not a one-to-one correlation, I mean, it is. We've said already, and we'll come to the Capital Markets in a little bit more detail. I mean, grades are heading north now, and they will head north, and it's nothing strange that this kind of proven part or proven and probable is going up. Is of course that this kind of very short-term mining, which is within the present environmental permit, which is the proven part, that that one goes up. So yes, it is an indication that grades will go up.
But it's no changes in Liikavaara, for example, or something like that?
No, that has nothing to do with it.
Okay.
No, nothing to do with it.
Yeah, I just want to follow up also on the further question on that. Yeah, a part of the acquisition will be funded with new equity. I mean, is it a done deal that you will do the equity? Because obviously visibility in your earnings will increase as we go on during the quarter or the year. And I mean, it depends on the gold price, dollar, what have you, but are you sort of committed at this point to, are you sort of, is it a done deal with the equity issue? That's my question.
No, it's not a done deal in the sense that we have set exact parameters and exact timing. As we have pointed out in the report, we will, during the next coming month, we will look into the timing of this and how to get it. And also I got in some of the questions about exact terms, and also the exact terms will also be taken over time as we get more information.
Thank you.
If I can get back just to Christian, I'm not sure if I misunderstood your question. I might have answered it in the wrong way, but when we do the acquisition bookwise, you have a lift in assets, the assets coming in of the deal, and you have a lift in the debt. The equity comes over time as you earn money, and it comes if you do a share issue or if you cancel dividend. But initially, there is no immediate effect of equity from the transaction.
Excellent. Viktor Trollsten, Danske Bank, please.
Thank you very much. And on the successful exploration results in Garpenberg, just how does that change your view on the 4.5 million ton permit that you are looking for in Garpenberg? Shouldn't you perhaps aim higher given these results?
What I think I said is that this 4.5 is aimed to be coming fast, and for it to come fast, we are doing that as a change of an existing permit. Changes in permits can only be done if it's considered to be limited, and therefore, we have considered that this should be possible to get as a change of an existing permit. We're not really changing much of the other effects on the outside, so it should be questioned, then comes another question. Should we apply for a new permit with something else? That is, of course, something that we will look into, especially with this success in the exploration about what to do, but that will be based on a fully new permit that needs to be applied for, and it will take quite some time.
But I can give you a little bit of a spoiler alert that we will talk about this on the Capital Markets Day.
That sounds good. And then I guess that you won't answer this question, but on the potential investment in expanding Garpenberg, I guess in 2016, you invested SEK 4 billion for 2 million tons additional milled volume. But can you say anything about sort of rule of thumb, how that has developed since 2016? I guess it's more today, but how much more?
Without saying anything in detail, it's more, and it's more because of two reasons. One is kind of general inflation between. But you also have to remember that this new research that we're looking into is down to 1,700 or even deeper depth. So the additional shaft that will be needed will be quite a lot deeper than the one that we built in 2014.
Do you have one more short question? But on Odda, just an update on the expansion. I guess you said EUR 150 million in additional EBITDA last time around, and that was based on current market conditions. Just so we understand it correctly, but is it based on 2024 benchmark or just so we don't model it too high?
I think you should consider that based on 2024 benchmarks because that was given at the time when that was the prevailing market condition.
Fair enough. Thank you.
Thank you, Viktor. And the operator that opens up our international Q&A session. But Mikael, I was very glad that you mentioned the Capital Markets Day so many times. We have that coming up in March, and I do believe we have a beautiful slide regarding that Capital Markets Day, which we might put up there in order to remind people. Can we please do that?
It's there.
It is there. Excellent. Okay. Once again, operator, then it's time for international questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Liam Fitzpatrick from Deutsche Bank. Please go ahead.
Good morning, everyone. Two questions for me. Firstly, on the dividend and then a follow-up on Odda. Just on this dividend suspension, I'm sure you've had lots of conversations with your main shareholders. From that, are there many shareholders where you think the suspension could impact their ability to hold Boliden? And then the second question on Odda, I know you just touched on it, but that EUR 150 million uplift, it does make quite a big difference in terms of the years that we're looking at. And looking at the annual figures that you've just released today, the profitability for Odda was down quite significantly, and I'm sure there's some impact there in terms of the tie-in work with the new expansion. So yeah, any clarity you can give on kind of the base we should use for that EUR 150 million uplift? Thank you.
If I start with the second one, I will kind of say what I said just before, that we will talk more about this on the Capital Markets Day as we have some more clarity around both timing and the exact levels. But it's, of course, also where the baseline is because, as you kind of pointed out, the results in 2024 are maybe also lower than the kind of baseline was in our calculation when we communicated the added benefit of the expansion. So there are lots of moving parts in that, and we'll be happy to kind of look into those as we come into March. The question on dividends and reactions, you're absolutely right. We are a company which does not have any really major shareholders. So prior to the announcements in December, we could not talk to any shareholder.
Nobody wanted to be talked to because they would not want to be insiders and not allowed to move around their Boliden shares. Afterwards, we've spoken to a wide variety of shareholders, and even though there are diverse opinions, it's not that we have a shareholder base where everybody thinks the same. I would say that we got a clear majority message that this was a preferred route to have a canceled dividend and a lower new rights issue than having a bigger rights issue and then getting dividends. There are, and I cannot quantify it, but you're right, there are certain types of shareholders to whom this is problematic. But I don't think that for many of them it means that they cannot hold us, but it's a little bit problematic for some.
Maybe we should add just to underline that the dividend policy remains unchanged going forward for next year and onwards.
The next question comes from Ioannis Masvoulas from Morgan Stanley. Please go ahead.
Much for the presentation. A couple of questions from my side. I'll start with Aitik first. Slide 17 of the presentation is striking that as it shows, the mine has been in the past one of the highest, probably the highest contributor to operating profit as much as one third of the group, and now in 2024 was essentially the least profitable. Clearly, grades, as you talked about, have had a big effect, and these will take some time to recover towards reserve grade levels, but it sounds like there's a lot of progress you can make on throughput via your own actions. 2025, it's probably going to be a transition year, but shall we be baking in 45 million tons for 2026, or do you think that's a longer-term target?
It's of course very difficult to answer that question as well, but you're absolutely right that viewing 2025 as a transition year is probably the right thing to do, and then as we move into 2026, and we'll talk more about 2026 as we come once again to Olof's special place, the Capital Markets Day, we will talk about the grade recovery and so on in Aitik and what that looks like, getting back to that.
Okay. That's very helpful. Thank you. And the second question on the strike effects, because it's not entirely clear to me. You suggested that the collective bargaining discussions are still in place, but at the same time, you also said that most of the disruptions related to the industrial actions have already been concluded. How should we think about incremental impact beyond the SEK 100 million you indicated? And can you also talk about which operations, if any, still have some residual effects? Thank you.
I think it's important just to get the context of the Finnish labor negotiations. There has been industrial action that was taken. It was initially around a week. It hit us straight on and many others. That industrial action is now more or less called off. There's some white-collar worker who are striking right now as we're talking about the blue collar, which affects the production right now in operations. For those of you who don't know, there's also other kind of complexities around as there are strikes going on in ports and on railroads and so on in parallel. But as of right now, this second we're talking right now, we are producing full because right now we're not affected. The SEK 100 million that we've guided for here is the effect that we've had so far from what's happened during January up until today.
Whether there will be more industrial action later in February because negotiations will not conclude, we do not know. If that happens, we will have to come back to you with the guidance. But if we manage to conclude the negotiation without any more industrial actions, it should stop at these roughly 100.
Okay. That's clear. And just to clarify on the port and rail strikes, shall we expect any incremental effects around shipments or stockpiling from your side?
Not if it stops here. We have enough time to kind of manage that in the quarter. But if that were to come later in the quarter and so on again, of course, we could potentially see an effect towards the end of the quarter. But as of right now, no. The stockpiling effects have not been big enough so that they cannot sort themselves out.
That's clear. Thank you very much.
The next question comes from Jason Fairclough from Bank of America. Please go ahead.
Good morning, guys. Thanks for the presentation. Two, let's say, bigger picture questions for me. One just on the strategy. So you're starting to move outside the Nordics a little more. You're moving into Portugal. You've got the exploration in Canada. So is this sort of the emergence of a new version of new Boliden? Second question is, I guess, how do we think about vertical integration once you've completed this transaction to acquire the Lundin assets? In an ideal world, are you 100% vertically integrated between mining and smelting?
If you start with the second question, we don't really have an ideal world regarding integration. Integration is what integration is. For copper and zinc, there are liquid markets to tap from, and we will not buy or develop mines in order to feed the smelters, nor will we develop smelters to. With the big investments that we've done, especially in Odda, you can say the pendulum has swung against smelters for a while. Now, with the restart of Tara and the acquisition of Lundin, you have the pendulum going a little bit more towards mines. And when you look at the kind of what I call the options that we've been discussing, what could be potential future projects that we have not decided yet, there's a little bit of overweight right now on mining ideas or mining potential projects.
So that may be a signal that we're not aiming to be fully vertically integrated, but rather letting these ones be individually run. On the strategy, geographic strategy. Well, we changed strategy. It means that an ocean-going vessel is extremely agile and quick. We do this very slowly. But the answer to some extent, yes, when it comes to these two, the wider Europe apart from Northern Europe and Canada, it has actually been in our own internal strategy documents for many years. We have only slowly reacted to it because we don't want to rush into anything. We want to do things when we feel that we have good knowledge and good opportunities. And here you see a little bit of what I would say at least Canada is baby steps in a little bit outside direction.
Of course, Neves-Corvo is an acquisition, which is, well, a relatively significant step, but those don't come in baby steps.
If I could be cheeky and just ask one more quick one. In terms of working capital, we've had a couple of years of working capital inflows. Do you think we're normal here, or is working capital actually too low at the moment?
There is a seasonality, and often the lowest point is around year-end, and that is the fact right now as well. I think the key in working capital is to have the right working capital because it is important to get the right feed mix to be able to take on the most profitable concentrates. So I don't think it's too low, but you're right. We had an inflow in working capital for a couple of reasons. One is a strategy of taking more complex, more gold-rich concentrates, which has been profitable, but in that we also pile up a bit too much because we couldn't get it out in time. So there has been a mix. I don't think we are too low at this point.
Okay. Thanks, guys, and we'll see you in Barcelona.
The next question comes from Daniel Major from UBS. Please go ahead.
Hi. Thanks for the questions. First one, you've obviously given your normalized EBITDA, EBITDA contributions from the Odda expansion. Can you give us any steer on the Q1 or full-year contributions in 2025 as a consequence of the ramp-up or else equal? First question there.
There is for Q1, very limited, almost none, as we're commissioning only towards the end. For the full year, we'll come back to that once we have the Capital Markets Day and we have some more clarity on exactly how the ramp-up will look like.
Okay. Thanks. And then second question on, getting a bit of feedback, but on Garpenberg, you're looking to expand the permit above 3.5 million. What sort of level could you get to without putting in significant CapEx? I know you got to like nearly 3.8 million tons annualized in Q3.
It's a good point that you're raising, and I think it's. Thank you for taking that up. We are now applying to get a revision of the permit, I said, to 4.5. We think that without doing any CapEx whatsoever, we cannot really move much beyond maybe 3.5, 3.6, 3.7, somewhere around that neighborhood. You have to remember that this infrastructure was built for 3.3, so there is no kind of magic trick to get much beyond that. Now, we do have a few, what do you want to call, tricks up our sleeves or whatever else that we can do, maybe some small CapEx to actually start using more of that.
We'll talk more about that again on the Capital Markets Day, what we could do to kind of fill that 4.5 as an intermediate step of relatively small CapEx, relatively quickly getting some more cash flow and getting going. But we'll also clear that in order to kind of get anywhere further beyond that, you can say we're playing a little bit on time because we will need a new shaft. At some stage, we will need a new shaft to be able to do this. When you build a new shaft, you probably want to do that a bigger one. That doesn't mean that means that 4.5 is actually the wrong size. Maybe something much bigger is the right size. That has to be looked upon. That has major other implications, including dams and the mill and everything else.
So once again, we might be able to shed some more light on that in a month, the Capital Markets Day, about what our kind of potential steps are in Garpenberg, even though I can also tell right now that don't expect there to be any announcements of any major investments because we're not there, but we're enough to be able to shed some light on it.
Okay. Thanks. Look forward to following up at the CMD. Just a final quick one if I could. Just looking at the smelting business, you and I guess the broader industry is not going to be making the same kind of margins in smelting copper concentrates for the $20 TC, but you've obviously got quite significant scrap exposure that provides you with an alternative income stream. Have you got any comments on the scrap market? Are you seeing any tightening as smelters kind of pivot to more scrap, less concentrate?
We haven't really seen that yet, but of course, it's something that could happen. I also want to make a point here that, yes, the TCs are heading down, but a relatively important portion for us, which is reported in TC, but is not normal TC, are the penalties for the penalty elements. And that's a kind of separate market around that, which is moving much slower than the benchmark TC. Also kind of important to point out.
Great. Thanks.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Now, I would just like to thank you all for spending the time with us this morning. It's been my pleasure to be able to present this report, and I wish you all a very good day. Thank you.