Interim Report Q1 2026 - Turbulent global environment impacts the quarter

Summary of the quarter
Net sales: SEK 363 million
Deliveries: 401 kton
Earnings before depreciation and amortization (EBITDA): SEK 73 million
Operating profit (EBIT): SEK -1 million
Cash flow: SEK 132 million
Investments: SEK 3 million

Impact from external environment and rising costs
The first quarter was characterized by significant geopolitical tensions, particularly in the Middle East, as well as a global economy where uncertainty persists. These developments have affected trade flows and conditions for maritime transport, while currency markets have been volatile and fuel prices have increased. Overall, this has resulted in higher freight costs, increased fuel prices, and currency-related effects during the quarter. In addition, the record-cold winter in January and February led to significantly higher electricity costs compared with previous years.

Production and safety work
Production-wise, the quarter has been challenging relative to plan. Lower iron content in the ore than expected has negatively impacted production and placed increased demands on the beneficiation process. A negative trend in workplace accidents has been noted, although levels remain low. Safety continues to be the top priority, and measures have been taken to strengthen preventive efforts.

Important milestone with new environmental permit
The legally binding environmental permit obtained in early February represents an important milestone for the business. The permit covers continued operations in Tapuli, as well as the development of additional deposits, including Palotieva and Sahavaara, along with continued operation of the processing plant in Kaunisvaara. During the quarter, efforts have focused on how to incorporate the permit into strategic planning and the company’s future development.

Continued work going forward
In summary, the company moves forward with strengthened cash flow, while both external and internal factors continue to impact operations. The focus ahead is on managing challenges related to production and the external environment, while continuing strategic efforts to enable long-term mining operations in the Tornedalen region.

CEO comment
“The quarter has been marked by a challenging external environment with rising costs, while we report strong cash flow. Our focus is on managing these challenges and continuing to develop the business with a long-term perspective,” says Klas Dagertun, CEO of Kaunis Iron AB.