Champion Iron earnings hit by lower iron ore prices
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The news: Champion Iron posted a double-digit hit to its fourth quarter revenue and earnings as the lower selling price of iron ore weighed on results.
The numbers: The Montreal-based miner recorded revenues were $332.7 million for Q4, down 28% year on year, or 34% quarter on quarter. EBITDA was $85 million, 57% lower year on year, or 65% lower quarter on quarter. This represented an EBITDA margin of 26%, compared to 42% for the same period in 2023.
ASX-listed Champion said it experienced a 25% decrease in the net realised selling price for iron ore concentrate, driven by negative pricing adjustments on sales recorded during the previous quarter, higher freight and other costs, and lower gross selling prices.
Quarterly production of 3.3 million wet metric tonnes was down 19% from the previous quarter but up 6% year on year. Quarterly iron ore concentrate sales of 3 million dry metric tonnes was down 8% quarter on quarter and 4% compared to the prior year period.
The context: The miner, which owns and operates Canada's Bloom Lake Mining Complex through its wholly-owned subsidiary Quebec Iron Ore, said its Phase Two project was impacted by the availability of equipment in the fourth quarter, causing unplanned maintenance activities.
Shipments from the site were also negatively impacted during Q4 as a result of continued lagging railways services, as well as planned and unplanned maintenance activities on the railroad.
Champion's CEO David Cataford said its Direct Reduction Pellet Feed (DRPF) project, which aims to upgrade the Bloom Lake Phase Two plant's production of iron ore concentrate, is on track to produce "one of the highest purity iron ores in the world", enabling the company to play a greater role in the green steel supply chain.
The source: ASX announcement
