Year-end report 2021: Record profits in favourable market

February 14, 2022

LKAB sums up 2021 with operating profit at 130 percent up on the previous year, driven mainly by high iron ore prices. Historically strong operating cash flow of SEK 20 billion puts the group in a stronger position to lead the climate transition of the iron and steel industry, while a dividend of SEK 12,4 billion is proposed for the group’s owner, the Swedish state.

Net sales for 2021 increased by nearly SEK 15 billion to MSEK 48,812 (33,914). Operating profit also increased correspondingly, to a record MSEK 26,898 (11,654). 

Profit for the full year amounted to MSEK 22,604 (9,757) with operating cash flow at a historic high of MSEK 19,988 (6,038), mainly thanks to the strong earnings.

The Board of Directors is proposing to the Annual General Meeting that an ordinary dividend of MSEK 12,430 (5,850) is paid, which is more than a doubling compared to the previous year and corresponding to 55 percent of profit for the year.

“In 2021 we have delivered LKAB’s strongest earnings ever. As one of Sweden’s largest export companies we have strengthened the foundations for our important transformation and at the same time increased the dividend to our owner, the Swedish state,” says Jan Moström, President and CEO LKAB.

Good market conditions 
The operating profit for the full year was particularly favoured by higher prices for highly upgraded iron ore products. The average global spot price for iron ore products during the year was USD 160 (109) per tonne. At the end of the year the price was USD 119 per tonne. Quoted pellet premiums were on average USD 34 per tonne higher than in the same period last year.

The positive impact of good market conditions during the year on profits was offset, however, by a lower dollar exchange rate and lower delivery volumes, as well as by higher costs. Higher energy prices, continued costs resulting from the extensive seismic event in Kiruna in May 2020 and extended maintenance shutdowns as a result of measures associated with Covid-19 contributed to this. The costs of increased investments for the future relating to exploration and development programmes also had an impact.

In the fourth quarter the global iron ore price fell to an average price of USD 110 (134) per tonne, which was USD 54 lower than in the previous quarter. Both net sales and operating profit were lower when compared year-on-year. Sales amounted to MSEK 9,064 (9,082) and operating profit totalled MSEK 2,815 (3,625). Higher costs also had an adverse effect during the quarter, mainly because of extended maintenance shutdowns, costs related to a new enterprise resource planning (ERP) system and a donation to a newly established foundation for research into the sustainable transformation of the mining and minerals industry.

Lower volumes still affected by Covid-19
The delivery volume for the year amounted to 27.0 (28.5) Mt and for the quarter to 6.8 (7.0) Mt and was affected during the quarter by a somewhat lower production volume. Production volumes amounted to 26.7 (27.1) Mt for the full year and 6.7 (6.8) Mt for the quarter. This was mainly affected by extended maintenance shutdowns due to adjustments for corona in the spring. 

Ability to drive the transformation of the industry 
The climate transition that LKAB is driving, aimed at achieving carbon-free processes and products by 2045, requires extensive investments over a period of 15–20 years. Since this transformation is to be financed mainly by cash flow from the group’s own operations, it is key that the current production structure is competitive.

“This year’s record results strengthen our ability to do this, but we have to be able to remain competitive even in times when iron ore prices are not at a record level. It is crucial that we improve efficiency and maintain production and delivery volumes,” says Jan Moström.

Contact: Niklas Johansson, Senior Vice President Communication and Climate LKAB. Tel: +46 (0)10-144 52 19. E-mail:

LKAB is an international mining and minerals group that offers sustainable iron ore, minerals and special products. We are committed to developing carbon-free processes and products by 2045, leading the transformation of the iron and steel industry. Since 1890 we have developed through unique innovations and technological solutions and are driven forward by more than 4,500 employees in 12 countries. In 2020, the LKAB group had sales of about SEK 34 billion.