Boliden (1K) | Hold | Low visibility, potential M&A (call feedback)

Research evidence excerpt

Boliden (1K) | Hold | Low visibility, potential M&A (call feedback)

the mine.

Higher depreciation from Q3

The CFO indicated that depreciation and amortisation should increase from a run rate of

SEK2.3bn in Q2 to around SEK2.6bn per quarter in both Q3 and Q4. The increase will mainly

reflect the commencement of depreciation related to the Odda expansion project.

Odda ramp-up progressing more slowly than expected

Management attributed the slower-than-expected ramp-up at Odda to relatively minor

operational issues, primarily related to automation and IT settings, including emergency stop

systems that were triggering too easily and causing repeated shutdowns. While management

acknowledged that recent delays had dented confidence in the project, it remained confident

that the plant could reach full production during Q3.

Management also reiterated its previous guidance of around EUR250m of incremental annual

EBITDA from the Odda expansion, noting that changes in commodity prices and by-product

markets broadly offset each other.

M&A dicussions

Commenting on the reported discussions with Nexa Resources, management explained that it

had confirmed the talks only because of a media leak in Brazil. It stressed that such discussions

are a normal part of the mining industry and that Boliden intends to remain ready to pursue

attractive opportunities whenever they arise.

Management also highlighted the industrial rationale behind Nexa's assets, noting that several

of its mines and zinc smelters are technically similar to Boliden's existing operations, creating

potential operational synergies. As for timing, management noted that transaction processes

are largely driven by the seller and reiterated that Boliden believes it has the organisational