Good morning and a warm welcome to Voliden's presentation of the Q2 2017 Results. My name is Sofia Arnios, and I'm Head of Investor Relations here at Voliden. Our CEO and President, Dana Tiberde, will comment on the results together with our CFO, Jorge Garvin sir Leonard, please go ahead.
Good morning. We are extremely proud of this quarter. Everyone knew that we had big maintenance shutdowns, euros 260,000,000 in earnings impact. And also, we have seen the terms in the market declining. We actually have around SEK 700,000,000 in or almost SEK 700,000,000 in negative effect from prices and terms.
Adding those 2 together, of course, it's a challenge to win the quarter compared with the first. And then it's so we are so happy with the fact that we have delivered a higher profit than in Q1. And it is, of course, because of very strong production. Aitik has been doing a major step in production volumes and also in high grades. Revenues were up from SEK 9,500,000 to SEK 11.5 1,000,000 and EBIT was EBIT, excluding process inventory, was SEK 2,200,000,000.
That's over double of the year before and higher than Q1. The free cash flow of over SEK 2,000,000,000 is also a number I'm extremely proud of. In addition to the production in Aitik, which was the effect of volume and grades, we have had a very strong production in the Bulidin area, also there with a higher proportion from the of ore from underground mines, boosting the grades and also very smooth production. So also, the Bulin area has been contributing heavily significantly in the strong production data here. Also, the smelters have had a very good quarter considering that we had EUR 260,000,000 in maintenance shutdowns.
So that given, I would say that all the smelters or all the smelters have also been doing a good result. If we look at macro picture, Boliden's main markets are developing well. We have a momentum in the global industrial production. We have a slower situation in the automotive industry, but the higher share of Chinese cars are galvanized. So we're still seeing a good momentum in Construction and Automotive.
Base Metals have had an average growth of between 1% 2%, copper and zinc growth. Nickel demand has been declining. It's lower than in Q1, but it's still lower than the demand. So we see the big inventories of nickel going down. We are seeing some cuts in the smelters production of zinc in China.
And in general, I would say that the metal markets have been developing well. If we look at this picture, it's seeing or we demonstrate the average of our metal prices and the currencies to the left, and they are going opposite direction in the big picture. But lately, we have seen both negative trends on currencies and prices. And the combined effect is a quarter with significant negative impact compared to the previous quarter, but still on a good level. We often refer to prices as being high or low, and that's, of course, objective.
But we when we do that, we normally refer to the cost structure of the industry. These three graphs are showing the line graphs are the development of cash cost of the industry average. The 90th percentile, the upper line indicates where 90% are EBITDA positive and 10% are doing EBITDA loss. And then you have the vertical lines with the min and max price. And we can see clearly that we have good prices in zinc.
We have, well, reasonable prices, but not very high in copper and extremely low in nickel to the right. If we then go through our operations and starting with the mines. Well, this graphs on earnings and the quarterly earnings and rolling 12 months or 4 quarters is, of course, showing a tremendous momentum we are in despite negative impact from the markets. EBIT, euros 1,500,000,000 and euros 1,255,000,000,000 is more than double the profit a year ago and higher than the previous quarter despite the negative impacts from turns. CapEx was E800,000,000, which is up from the previous year and well in line or below the guidance we have done.
Record production in Aitik. Both the volume has been going well, less problems with equipment than normal and very, very good grades. And here, we have been saying that we are in areas with at the bottom of the pit, where the grades are high, and we are going to continue in those areas. So we can expect the second half of this year also to be on a higher level than the average of 0.25 we have guided for the period 2017 through 2019. We have a cost component coming with higher volumes, of course, but I would say that the costs are under control, well under control.
And so we're very happy with the mines production. And if we go into the different parts, we can see the line, which is contained copper to the upper left of the Slide 8 here. And we can also see the bars, which is the tonnage through the mills and also the mill production is high. Zinc was suffering a little bit from a not so good quarter Tara, and Gothenburg continues to do the normal thing, just continuing on a very good level. Nickel in Kevitsa was good in grades, but not terrific in volumes, but okay.
If we then move over to the Smelters. I think the general remark is a very good quarter given the maintenance shutdowns. We did SEK 5 $60,000,000 in earnings compared to $397,000,000 a year ago, and this is down from the previous year. And as we have known, And the market terms are going negative for the smelters and positive for the mines, the longer term or the general picture. We have good production in copper despite or given the maintenance shutdowns.
We have some disturbances in zinc smelters, and we are a bit disappointed that the previously sort of discussed process problems in Coca Cola have not been resolved. And we are really struggling with something we don't understand, and therefore, we think this will continue because we don't have the root cause yet. The financial impact is, however, limited. So given the big picture, it's nothing to really bring up as a major problem, but more of a remark. We have compared to the previous year metal prices coming with us, and we have the full impact of the lower TC this year compared to last year.
Copper smelters, we can see the volume, which is considerable down compared to the previous quarter, and that's due to the maintenance shutdowns. And the contained metal is in consequence of that. Sink Smelters had a good quarter compared to the previous year, and it's less maintenance here and the Oda expansion, of course. And with that, Hakan, could you continue with the financials? Thank you, Lennart.
So let's spend a few minutes then on the financials. We're happy to present another quarter with stable earnings. We have now the 3rd consecutive quarters with EBIT above SEK 2,000,000,000 excluding process inventory, that is. EBITDA reached SEK 3,000,000,000 CapEx SEK 1,400,000,000 which is a very normal level given the guidance we've given on slightly less than SEK 6,000,000,000 for the full year. And good earnings, together with better working capital development, gave cash flow SEK 2,000,000,000.
You should also remember that we paid dividends in the quarter, which has an impact on the gearing that reduced to 25%. Looking into Q2 of this year compared to Q2 of last year, I think the big story, of course, is the recovery we've seen in metal prices compared to a year ago. We have an improvement of SEK 1,300,000,000 in profits. And out of that, SEK 1,100,000,000 comes from better prices and terms and a stronger dollar. So the prices contributed a lot, but volumes also give a great contribution.
We have CHF 600,000,000 additional profit due to better volumes. The main part, 2 thirds, is Aitik. And in addition to Aitik, we've also had a good development in Kevitsa compared to a year ago. On the cost side, costs and depreciation altogether increased by SEK 200,000,000. A big part of that is volume related.
As you know, depreciation correlates strongly to volume. In addition to that, we've had normal inflations on salaries and a bigger cost for variable pay connected to the good result. Last year, we also had some positive items affecting comparability one offs that hasn't repeated this year, and that gives a minus in this analysis. Moving on then to a comparison Q2 compared to the previous quarter, Q1 of 'seventeen. As Werner said, we had lower terms, and we've had maintenance shutdowns, Shutdowns influencing the EBIT with SEK 260,000,000 and in relation to that lower term.
The high production we've seen has compensated for that drop, and the net effect is a positive deviation of SEK 100,000,000. Volumes are up nearly SEK 800,000,000 and half of that more than half of that comes from Aitik. In Aitik, we've had good grades, We've had slightly better recoveries, and we've had good mill production. In addition, Bouhilden area has improved a lot, SEK 200,000,000. This is a combination of a very favorable ore mix and also a good mill production.
On the smelter side, we've had a negative impact from the maintenance shutdowns that we've had in the quarter. But during the remainder of the quarter, the production has been good, basically compensating the loss of the maintenance stops. In addition to that, we have released the internal stock, and we have been able to realize the profit on those. And that also had a good contribution in this volume amount. The impact of prices is negative, close to SEK 500,000,000.
Costs, SEK 145,000,000 higher. SEK 100,000,000 of that is related to the maintenance stops and the remainder is related to volumes. So good quarter with high production offsetting some known negatives and a +135 result in the end. Cash flow. Of course, the starting point is the EBITDA, which is just about SEK 3,000,000,000, fairly similar to that of Q1 of 2017.
But what is different to Q1 of 'seventeen is that we've released working capital, contributing a bit more than SEK 500,000,000 to the cash flow. Out of that, the main part is related to prices, but there is also roughly onethree that is volume decreases in inventory. Where we stand now, inventory levels are normal. They are normal on concentrates and they are below normal on finished metals. So again, a good free cash flow, roughly double the levels of the comparison periods if we take out the consideration of the Kevits acquisition.
So that leaves us with a strong balance sheet when we leave the Q2. Equity, more or less unchanged. The profits that we've added have been dividended out. Net debt down due to the good cash flow and gearing 2% down in the quarter. And if you look back to the year end position, we've actually reduced gearing with 7 percentage points.
And that also is in a 6 month period where we've had SEK 1,400,000,000 in dividend. So a good development in gearing. Still a strong interest rate, 1.3% average on the total financing and still a good payment capacity. So we're in good shape financially. The last slide, I'm not going to go into any detail.
We have added sensitivity analysis by business area. Last time we gave a breakdown by business area was at the Capital Markets Day in early 2016. So we wanted to give you an update for your reference. With that, I'll hand back to Lennart. After Q4, I said or the question came up with a very strong result that we have done.
Is there anything extraordinary? And I said, no, there is nothing extraordinary. Well, probably there is one. Everything went well, and that's unusual. I think we can repeat that this time too, but we have an exceptional, and that is both Boliden Area and Aitik are exceptional.
And on levels we will not be able to hold, but they are still giving indications of the underground under lying qualities of production. So very, very pleased with the quarters. I think there are a few things to point at. The volatile production is due to the volatility there to the low sort of trust we have in the crushers. They are breaking down.
We have very frequent maintenance and some of them are many times unplanned. And therefore, we are mining different areas, and we cannot tell in advance where we are going to mine. And therefore, we are going to have an uncertainty on the grades. However, we have good position on what the grades are in the rock. And therefore, we can say with a lot of confidence that we're going to be around 0.25, 2017 through 2019.
And this is a long time we were on these grades. Since 2012, we have been higher up in the pits, and we have a positive grade profile here. So it's not a surprise to anyone that we are on 0.26 now in the first half of the year. The mine plan for 2017 have been has been slightly adjusted. So we think that we are going to if the crusher 285 is working reasonably well, we are going to take more of the higher grade stuff in the second half, so slightly higher than the EUR 0.25, which is a long term indication.
It does not change the guidance, but more of the timing on it. Gaertenbei, we have announced earlier very, very big increases in the ore reserve. And since we're normally saying that the guidance on grade is to look at the ore reserve, but this is not true in F and A. The bigger additions are after 2,030 or after 2025 or something. And therefore, we are going to be on the average grades of the reserve before the big additions we did earlier on this year.
Kevitsa is basically continuing. We're very pleased with Kevitsa and nothing much to talk about there. Bulidin area, exceptional ore grades because a lot of underground, more than normal and long term underground percentage from underground mines with high grades. And then we are going to stop the main conveyor belt in Aitik, which we don't use do very often. So we are going to have a week of standstill of the main conveyor and quite a lot of maintenance in the mines.
It's coincidence. And therefore, when they are coming together, we say that Q3 will have more than normal kind of stops. Smelters have been through the big maintenance of this year, but we have some remaining. We're going to have an impact in Q3 of about SEK 50,000,000, so much less than the SEK 260,000,000 we had this quarter. And we have unfortunately discovered a problem in the dome of the roaster in Oda.
That's the roof or the top part of the big roaster furnace. And we have to take that in Q4, and it will have an impact of SEK 135,000,000 which has not been reported earlier. CapEx 2017, no change on the guidance. If we summarize, I think what we are seeing here is stable company with mines and smelters, base metals and pressures. And we are in it at a time when €680,000,000 of negative terms could be compensated by mines and smelters and, of course, the work on operational efficiency.
I think the grades in Aitik are impressed even there. We have the long term development to better grades, which has been communicated with 0.25 in the 3 years. And we have sort of a trend now where we take a bit more of the high grade stuff in the second half of this year and Q2. Maintenance shutdowns, you know all about. Another one in order, I regret that.
And I would say even if the negatives are compared to Q1 in terms, The general macro is looking quite good, and we are on a reasonable level or a quite good level in the combined picture market terms. With that, Sophie, could you tell something about future planning and then take us into the Q and A session?
Yes. Thank you, Lennart. We are very pleased to invite you to our Capital Markets Day. We will have it in Stockholm on 20 1st November and then going to Kevitsa and look at our newest mine on 22nd November. And we will post more information on this on our website.
So with that, we will open up for questions from our telephone conference. So please, operator?
Thank
you. Our first question comes from Alan Gabriel of Morgan Stanley.
Two questions, if I may. The first one on Aitik, Lennard. Is it possible to give us a trajectory of the grades? Where do we go from 29 basis points in Q2 for Q3, Q4? And then does it mean that 2018 2019 we're going to be in the 23 basis point range?
Do you have visibility that far out? And the second question is on capital allocation. Clearly, your net debt is coming down much quicker than what we in the market are expecting. How would you prioritize now between cash returns to shareholders and growth, I. E, organic and M and A?
And I'll leave it there.
First, on Aitik, I think I was quite elaborate on it. We have an average grade of 0.25 for the 3 years. We have had a high grade in Q2. We are indicating a high grade in Q3 and Q4. And if that happens, it will be sort of mathematical, where it will be lower in the years after.
However, and I am repeating this all the time, it was a surprise with the strong grades in the second quarter, and we will have both negative and positive surprises also going forward. So I think the volatility is for natural reasons. I think you all got it, and it's difficult to be more precise on that. We're trying to tell you the give you the full picture, and then we will see what happens. On the capital allocation, we have a big cash flow and we have a big CapEx program running, as you know, and we are slightly late with the CapEx.
Nevertheless, continuing on the pace we have right now, we are going to be at the level of 0.20 or 20% gearing quite soon if this continues. And we have a gearing target of 0.20. And what we do then is a question for the board. We have not been discussing it much. I have we are alerted or we are very, very well aware of it.
But I think what we will do will come in the report after Q4. Additional dividends is a possibility, obviously.
Our next question comes from Conor Rowley of Credit
Suisse. I just had one question on Kevitsa. So you had the you've had mine in your operations now for almost a year or over a year now. Is there anything that you've seen in the quarters as sort of changed your perception of it? Or when do you really think you're going to be able to give us sort of a longer term outlook on anything you're going to change or sort of longer term grade and production outlook?
I think you know Boliden's sort of culture and operational focus. I think buying Kevitsa at a time with very low nickel prices, significant issues and a lot of money even though we think we paid a very the right price. I think that what we are focusing on now is not to change plans or to look at other scenarios. We want to stabilize. We want to learn.
We have several issues we're dealing with. Everything seems to be under control, and we're extremely pleased with what we have done. So basically, more of the same and being careful with downside risk is a focus right now. When we do that, we're going to look at options over time, but it's not really on the table right now. So we try to refrain from doing that.
We try to focus only on stability, get our sort of stability going. That is the fundamental for creating value in this industry. If we can do that for a longer period of time, we have a big resource there and there are potentials, but we're not working on them. So it's going to take time.
Okay. Thanks.
Thank you. Our next question comes from Daniel Major of UBS. Please go ahead. Your line is open.
Two questions. Firstly, on the smelting business. You mentioned you released some external stock that's through the P and L this quarter. How much of a positive impact did that have in this quarter? And secondly, I'm just trying to get a sense for the sort of run rate in smelter earnings going forward.
If you net out the maintenance this quarter, you get to about €825,000,000 of EBIT, assuming we net out the guided impact of smelter maintenance going forward based on the current benchmark terms in the market, etcetera, is that kind of run rate on a quarterly basis in terms of smelter earnings as far as you can see sort of sustainable? Or are we at an elevated level versus where you expect sort of to be going forward? And then the second question is on CapEx. You obviously provided the guidance for this year. Can you give us any steer on the trajectory into next year in terms of the delta on CapEx at a group level?
If we start with the reduced inventory and the profit we released, I'm assuming you refer to the internal profits. That had a positive impact of roughly SEK 180,000,000,000 or sorry, SEK 1,000,000,000 with prices coming down and with volumes of stock coming down, you would see a positive impact there. So the effect is a combination both of prices and stocks coming out. Above all, we reduced the tonnage of some precious metal rich material. So that was it.
And apart from that, on the run rate of smelters, it has been a good quarter in the copper side. It has been not a problem for a quarter in the zinc side. As Sanath mentioned, we've had some issues in Cockerelin. Backing out, I mean but pricing wise, this quarter will have the full impact of the lower key fees. So if you look at the stock movements and the effect of the internal profits or sorry, the effect of the maintenance stop.
That should be a comparable run rate. I think we had about SEK 80,000,000 reduction in finished metals, which has an impact on the sales numbers. So backing out that, then it will be on a normal run rate.
Just to follow-up on that very quickly. Just trying to decipher between the profit impacts for this release of external stock. I mean, was there any positive impact that flowed through your reported EBIT from Smelters line? Or does that all go through the sort of internal profit elimination?
There is a little bit of stock reduction also in the cementers side. You can also say we had the ore stocks in ore piles in Bulid. And so if you dig really deep into the stock impacts, well, we have a little bit there, too. But basically, I mean, when we report an internal profit, EUR 260,000,000, which has not been delivered to the market, obviously, those profits are very real numbers. It's a timing effect, and they will eventually end up on the bottom value is something else.
But I mean, basically, it's showing that the internal profit is a solid number. And if it is negative, it's coming positive another time.
Okay. And the question on CapEx.
Yes. The question on CapEx. We have not yet given any guidance on numbers beyond this year, so we'll have to come back on that. But what we can see is that we have a maintenance CapEx of SEK 3 point 3,000,000,000, 3,500,000,000. And in addition to that, we have a number of the big projects that we are running continue also into next year.
So we'll have to come back on a number of that. But several of the heavy projects are not finalizing until in the middle of next year. So I think you should plan for a continuation of those at least.
Great. Thanks a lot.
Thank you. Our next question comes from Christian Kopfer of
Just a question on the price effect that you report on the mines. It's around EUR 400,000,000 negative. A little bit surprised to see that big impact. Was it something special in there? Because if you look historically, I have to go back to, I think, Q3 2015 to see that big of an impact.
And by then, prices were like 15% down on both copper and zinc, and we have not seen that big drops in the Q3
here. Okay. Let's take that because it's a little bit more than just sensitivities and it's the MAMA effects, but you can go deeper into that. We had as you said, we had a negative NIM effect. I mean, the big part, obviously, is normal price changes.
But on top of that, we had a negative NIM effect in this quarter. Now I'm talking about the P and L of this quarter and not a bridge, of roughly SEK 75,000,000. So if you then go into the bridge and compare 2 quarters, we had a positive NIM effect last quarter of around SEK 100,000,000. So all in all, the positive NIM in Q1 compared to the negative NIM in Q2 adds EUR 175,000,000 to the change in EBIT, and that is a part of that. Month after month of arrival, the typical cost we have in most of the deliveries, and it means that you have final pricing or the price is set amount after delivery.
So in a declining market, while we have to adjust the profit we did last month, have to be adjusted down with a month later kind of pricing. So it's delaying it's having a delaying impact.
Yes. And then on working capital, I think, Hakan, you mentioned that you were a little bit below normal on finished metals. Does that mean that underlying, call it, the working capital, will you expect that to increase over the course of Q3? Or
It's right that we're a bit lower on metal. But if we take the big picture, we released roughly SEK 500,000,000 in working capital, most of that inventory. And that is part related to prices coming down and part related to volumes coming down. And then if we zoom in on the inventory volumes, the concentrate stock is a normal level and the finished metal is a lower level. Now the finished metal is perhaps 15%, 20% of the total stock.
So it will not have a huge impact going forward. I think the main thing for now is that we have a we've had a contribution of prices and of volumes, and we're now down to normal levels. And the fact that we're below normal on a very small portion of the stock will not have a huge impact going forward.
Right. And then finally for me on Aitik. Could you maybe Lennart can fill in a bit on the stability of the crushers. Were those was that a positive surprise for you? Or have you done something structurally with the crushers in Q2?
Yes. And or have we done something? It's I am surprised, and we have done something with the crushers. I can guarantee it. I mean we have probably some of the most talented teams in the group working on the crushers now to deal with a fundamentally working machinery piece of equipment, which is sort of the key to so much profits and so much cash.
So it's still fundamental for the performance to live with something which is not operating well. So we're doing a lot there. And yes, I am surprised. And well, I'm surprised about the quarter, but we have said all the time, we're going to see good quarters. We are going to see bad quarters.
We're repeating it now. We're building a new crusher. So yes and no. But in any case, it was a great quarter.
And for Q3, can you just comment a little bit how the crushers have performed so far during this quarter?
Yes. Well, we're standing still quite a bit right now because we're maintaining a lot of equipment. So the volumes are low. We are hoping to have 2.80 5 crusher, the one at the bottom or the lowest one, to do a lot of work in Q3. And then we're going to be in similar areas as in the Q2.
That's the basis of that sort of information. If EUR 285,000,000 is not working well, we're going to work on the higher crushers and we're going to be lower levels. This is these are the uncertainties you're well aware of, and I can't where no one can do much about it, health. And we're working very hard. And this time, it worked out well.
Could be a trend. I don't think we should count on it,
though. Okay. Thanks very much.
Thank you. Our next question comes from Daniel Lutz of Exane BNP Paribas. Please go ahead. Your line is open.
Thanks so much for taking my question. Just a couple of quick questions on your maintenance plans. First of all, on the shutdown in order in Q4, could you explain whether that relates to the issues experienced in Q2?
Is it sort of unexpected that
you need to shut that
smatter down? Second question on the maintenance in the mines this quarter. Could you give us a bit more detail on where that's happening? Which operations will be most impacted? And maybe lastly, on Coca Cola, could you outline a bit more what the process instabilities are that you are seeing and how long you're expecting that to impact this maritime?
Well, no, we had this unexpected stop earlier this year. And what we discovered is that the dome, the top of the roaster is not in good shape. We had it for maintenance later on, but we said, should we, should we not do it? We look at the sync TCs. We look at the risks.
We look at the NPVs. We look at all kinds of probabilities of problems going forward. And it's one of those where you never know, is this the right decision or not. We have been really the way we do. We are calculating.
We are using a lot of Excels, working with probabilities and stuff, and we have arrived that this is the right decision to take. And therefore, we are going to open it up or close it down, opening it up, change the brickwork in the dome and then be done with it. And it's going to take time. If I just make shipping regarding a comment earlier on. The guiding we give now in Q4, the SEK 135,000,000, that's the total maintenance maintenance stop for Q4.
We had some amounts earlier, and there is an increase up to SEK 135,000,000 with the stop in order, just to clarify that. Yes. Sorry for that. On good. Copler disturbances, it's pretty strange.
We have something which is creating instabilities. And whether that is materials, we had a fire in Coca Cola, small fire, but we had to extinguish that fire. And maybe there are some chemicals that have contaminated the process. We have doctors. We have or technical doctors.
We have international expertise. We have everybody working on it. When we talk about this, I'm nervous that someone is saying they're sort of warning for a major thing. No, I don't think so. But on the top, on the margin, we are not going as well as we should.
We have a negative sort of deviation from our plans, and we cannot find the root cause. And I'm dead sure we're going to find it, but we haven't found it yet. And therefore, it's the kind of situation we're informing on.
Thank you. Just lastly on the mining and maintenance, Q3 over Q2.
Okay. On maintenance there, we basically, we have relinings for and we have conveyor belts changing. We have a lot of things that that is sort of the normal procedures. Normally, we don't guide about them because they are randomly they are each one normally quite limited, and they are randomly spread. It is the reason we talk about maintenance now is that we have a quite big one on the main conveyor in Aitik.
We have several smaller things, and they coincide in time. And therefore, we're going to have a lower production throughput in the mines than sort of a normal situation because of that in Q3.
Great. Thank you.
Thank you. Our next question comes from Alex Schmitz of Liberum. Please go ahead. Your line is open.
Hi. Thank you very much. Good morning. Just building up with the Coca Cola question. Do you have an estimate of financial impact or how much production could come down because of these process disturbances?
And also, Civil and Smelters, in terms of lack of concentrate availability that you mentioned in the report, If I'm not mistaken, you previously mentioned that 70% of your feed is internal. But how does it affect the remaining 30%? Does it affect you at all? Or how does that play?
We are not having a problem with concentrate feed to our smelters, first of all. And then the question on what was the question? The second question, I think, was about the magnitude of the Coca Cola. Yes, yes, yes. And the financial impact there, we wouldn't have been talking about it if it wasn't sort of noticeable.
We are saying it's not major. So it's not going to have a major impact on the group, but it's something that will probably be in the comments on Coca Cola. So I should not scare you more than necessary. It's important for Coca Cola. It's not that important for the group.
It's visible but not major. I think that's the kind of guidance I can give. We don't have a number. I think you can just say that we've had we talked in Q1 and we talked in Q4 about disturbances in the zinc smelting side, and that has been largely Coca Cola. We would have expected to see an improvement in Q2 and going forward.
But as of now, we see that a few of the problems are remaining, and that's what we're seeing now then.
Okay. Thanks very much.
Thank you. And our next question comes from Johannes Grunselis of Handelsbanken.
My first question is on Kietitsa. The copper grade has been stable, so has the nickel grade here and also stable milled ore volumes. How should we look at the coming quarters? Is this very representative, would you argue, for the coming quarters in Q2?
We don't have any particular guiding for Kvistra. It looks the situation is quite stable. So if you take the average, if you draw out the line, you can average it out. And I think that we do not expect any major ups or downs in Kevitsa compared to what you have seen lately.
Right. Can you just remind us about the capacity when it comes to mill the work throughput?
I think you should look at where we are now, and then we have a plan which has been communicated earlier. And I do not have any additional information on that.
Okay. Okay. Then on Tara, you had some disturbances here in the Q2 and some rock instability, I suppose. You mentioned this in the report. Could you give us an update to how you see Para for the second half?
Yes. I think the second quarter was a bit disappointing. We have had a very, very strong momentum, and I think we're still in that I think we are still in that positive momentum. However, we are going into the periods of union negotiations we had to sit in the second quarter. So some degree of uncertainty there.
But I would say, in general, we had we should have an improvement in Tara compared to where we were in Q2.
Okay. And then my final question is on paid tax because your paid tax rate your paid tax has been, well, substantially below the book tax. Is this something you can continue with for the next few quarters? Or should we expect like the normal Swedish and Finnish and Irish tax and
so on? The paid tax, there's always a time lag. And we're in a phase now of improving profits on have been if you look over the last number of years. And that gives a time lag. I mean, you charge the tax for the actual year in the P and L, and then you pay it normally the following year.
Over time, that will even out. Over time, it will even out. But as for now, you're right, it's a bit lower. But for your calculation and so on, I would certainly use the normal tax rates that that we have in the income statement.
Okay. That's all. Thank you very much.
Thank you. And the
last question in the queue so far comes from Oskar Mins from Oczynski Bank. Please go ahead. Your line is open.
Yes. I have a question on your sort of drilling programs and exploration projects to fill up the pipeline there. What's the progress in Kivilati in particular? And if you could talk a little bit about the projects that you have in the pipeline or the potential projects that are in the pipeline?
I mean the big trend here, we're spending more money than ever in exploration. We have more areas to explore on. We're excited about North Finland, and we have the big potentials in Tara Deep and Rhevladen in the Boliden area. I think we have had, over a year, a good return or resources compared to money spent or exploration spent. So if you benchmark that to other companies, I think we are successful.
We are efficient. We have own equipment. And in general, we're spending a lot of money in the area. But we have nothing in particular to report about at this point.
Thank you. As there are no further questions, I'll hand back to our speakers for the closing comments.
What shall we say? It's vacation time. We're leaving a bit exhausted, very hectic times. We're extremely proud. We think Berlin is a great company, compensating EUR 680,000,000 in negative market terms and EUR 260 1,000,000 in maintenance and do a better profit that given.
Of course, it's something we're very proud of. On the other hand, we're saying that we have a couple of exceptionals in there. But nevertheless, a longer term picture with mines and smelters, pressures and base metals together and with our new Bolide and Way productivity programs, which we have been pumping year after year after year with a lot of involvement from, I could say, every employee of this firm. It's a strong team. With that, I thank you for attending and wish you all a good summer.
Thank you.