Boliden AB
STO:BOL
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
252.1174
385.8
|
| Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Boliden AB
You don't have any saved screeners yet
Ladies and gentlemen, I'd like to welcome all of you to the Q1 2018 results presentation. My name is Olof Grenmark, Head of Investor Relations. Today we will have a results presentation and a Q&A session led by our President and CEO, Lennart Evrell and also our CFO, Hakan Gabrielsson. During the Q&A session, please limit yourself to one question at a time. Lennart Evrell, the stage is yours.
Thank you and good morning. My 42nd quarterly presentation and my last one. I will continue as the CEO until the 1st of June, a month away and then I pass over to my successor Mr. Mikael Staffas. Q1 was good, Hakan and I, we will take you through our presentations and give you the main highlights of the quarter. And the quarter was good, basically, everything was stable, we had a slight decline in profit which is quite a lot or basically a seasonal effect of winter conditions and that we start up the crusher in Aitik.If we look at the highlights, revenues came to SEK 13.3 billion, that's up from the previous year. Earnings or operating earnings were SEK 2.7 billion compared to SEK 2 billion a year ago and the free cash SEK 1.4 billion. With that cash flow then we reduced our gearing target or gearing to 6% from 11% a year ago and as you know we will as a result of the good strong balance sheet and strong cash flows we are going to propose the AGM today in addition to the normal regular dividend a one-off dividend, a bit more on that later.High grades in Aitik again and this time you should understand what's happening in Aitik and I'm coming back to that, but basically the lower volume and higher grades are effects of the same event and basically driven by the new crusher installations. And the project is going on plan, the crusher is running with ore today. We're doing the start-stop and testing and taking over criterias with the suppliers. So plenty of work there. So far so good and I think we are over the risks involved in startup periods. So it looks good. A particular case or situation in the first quarter was very good safety standards, we have seen our safety records being improving over time but we had certainly a very strong Q1 which is typically a quarter where slip drip and fall is coming in volumes with our winter climates, a lot of ice, but we have been successful on that -- in that area.Markets continue to be good. The general economy in the world is absolutely booming or it's a very strong general economy around the world, but surprisingly enough I would say that the automotive industry and the construction industries being part of the global economy development are not so strong. Nothing problem, we have growth in both sectors but very low in automotive and quite low and lower growth rates than we have seen before in construction. So in the general context of a very strong global economy, it is slightly less strong for the segments for the base metals. Strong, but not quite as strong as the general picture may look like.Base metals, high copper prices or high copper and nickel demand growth matches more than normal is driven by the developed economies with new energy systems there is a hype for battery metals and a lot of other things. Lower zinc demand growth and the prices are continuing to be volatile. The zinc and nickel metal demand was good or on that level and with the supply [ on strange ] there was a deficit in both zinc and nickel whereas we saw a slight surplus in copper.In the concentrate markets, we saw a tight market in zinc concentrate and a quite balanced market in copper concentrates. Looking at the prices, we have this picture we always follow of course we see a good metal price development, that's well known to you all. If we compare with the long-term prices or the cost of the industry I would say that zinc is very high priced, nickel is in spite of the positive development still a low priced commodity and copper is good not without being extreme high and that can be seen on this picture where we have the cost of the industry. The yellow line is showing the 90th percentile where 90% of the mine supply of the different metals are running at positive cash flows and as we can see here certainly, it's very profitable to be a zinc miner, it's not so profitable to be a nickel miner.If we combine and with the weights of the different metals, we see the light grey line here very positive development and we see that being compensated or offset by a negative currency development and if we combine the whole market term index for Boliden's set of commodities and currencies we see that we are on a very high level now, so very favorable market terms. If we then go into the mines, first of all, sales SEK 1.9 billion as compared to SEK 1.5 billion a year ago -- oh, sorry the earnings SEK 1.9 billion compared to SEK 1.5 billion and the CapEx was higher than last year and a lot is going on in smaller projects, many smaller projects and of course, we are working on the final stages of the crushers.Improved EBIT, high metal prices and high metal production. Aitik, high grades in Q1 and increased grade guidance in 2018. We are seeing now that when we are mining in the very bottom of the pit, the high-grade areas, we have probably underestimated slightly the grades and that is the reason why we do a slight up or increase of the guidance for the rest of the year. Low milled volume is an effect of the same thing as the grades are high. The new crusher is on the top of the pit and we stood still 1 week to reconnect from the old crusher into the new system and we have had an on-off situation on a daily basis. Therefore, we have focused our mining in the lower part of the pit where the grades are high, but the volume of ore is low because of this sort of planned and not very surprised rising disturbances. So all in all, copper production is good, but it's a very high, high grade and lower volume kind of situation.Also in Tara, we have been in very good areas. We have had very good grades and Tara is developing well with very high returns given also in [ apart ] from the grades, the favorable zinc prices. Winter conditions has an interesting detail, winter is harsh in the north of Sweden, but this year we can also say winter impacted our underground mining, which we have never said before and I'm referring to Tara where the whole of Ireland was on a standstill because people couldn't go to work during the heavy snowfall situations there, so funny but true. Also, underground mines were affected by weather conditions this year. And the winter conditions as I will mention later on also continued into the second quarter which is not very typical. If we look at the mine production, first starting with copper, we can see that the bars are low. We produced or had low milled volume, but despite that, we had very good metal production because of the high grades. You can see it very clear on the chart. Zinc, not very dramatic; nickel, the continued success with Kevitsa where after the acquisitions we have been able to push volumes and been in good areas. So Kevitsa continues to develop very strong. In smelters, this is a picture from one of the -- or the other, the second very large investment going on right now, a new acid plant in Harjavalta. And earnings were SEK 640 million compared to SEK 835 million, the decline is due to lower market terms [ as it is ] in zinc being the most important. CapEx were SEK 231 million, down from last year.We see a market with good conditions in general, but market terms are going negative to us. Stable production and high free metals in the copper smelters. We had a production record in Harjavalta and the zinc smelters are doing fine. In the quarter, we took a one-off write-off of our fire, which I think we mentioned last time in the lead smelter Bergsoe. We had a new project and right before commissioning, everything was built, everything was there, it's an SEK 80 million project and it was a fire, so most of the equipment was destroyed and we took the hit in the operating cost this quarter.Smelters production quite flat, but better than it looks because we got more of the byproducts and continue to deliver on the strategy of complex materials. Copper production was 92 [ ktonnes, up from 89 ktonnes ] a year ago. Record production in Harjavalta and interesting to note after the acquisition of Kevitsa and very high grades, we have an exceptional or historic high internal feed rate. So almost half of all the copper or half of all the feed to the smelters is from internal mines. In zinc, the process stability problems we have reported on before in Kokkola are seemingly resolved. Now we are still not really on that perfect production, but that is due to the external zinc concentrates are generally of low quality which are more complicated to run, that's normal. So it's not really a process situation, but it's more an effect of the market. Also, Odda, where we had this unplanned or planned on short notice repair of equipment in Q4, was now operating at full capacity and almost exactly on the P200 project nameplate capacity, so Odda did well. In nickel, production was okay, it was improved from a good level. And with that Hakan, if you can lead us through the financials.
Thank you, Lennart. So good morning. As you seen from the report I'm sure, today we reported a Q1 with revenues of SEK 13.3 billion and an EBIT excluding process inventory of SEK 2.7 billion. That is roughly 32% up compared to the same quarter last year and it's slightly down on Q4, which I'm sure you remember was one of our better quarters ever in fact. Capital expenditures investments SEK 1.1 billion, slightly on the low side, there is some seasonality in that. The guiding for the full year remains. We had a free cash flow of SEK 1.4 billion, which then brought the gearing down to 6%.And we then moving on to the next slide with the EBIT bridge comparing Q1 to Q1. We have an improvement of almost SEK 700 million in profit compared to the same quarter last year. Prices is more or less neutral on -- in the [ totality ] prices and terms, we had negatives in the currencies which offset the positive effect on the metal prices. So the improvement in the result is mainly due to volumes and more specifically then higher grades in our mines, which has been mentioned earlier. But in addition to the mines, we also had good free metals in smelters and we had a positive internal profit in the quarter. Costs are slightly up mainly due to inflation. Depreciation, there we have a connection between the depreciation of stripping and so on which follows the production level of metals. So with higher production of metals, we get higher depreciation. And finally, we had a fire in the Bergsoe plant as we talked about in the last report. We've taken a charge to the P&L of SEK 50 million to reflect that equipment that was damaged in the fire.Comparing Q1 to Q4, it's a slightly lower result minus SEK 187 million, out of that, SEK 125 million came from lower prices and terms. So the main factor in fact then was a negative foreign exchange effect. We had lower dollar and we had stronger euro which had a negative impact. Looking at the combination of volumes and costs and depreciation altogether, it's more or less at the same level as the very strong Q4 and then we had again the write-down of the equipment in Bergsoe.Moving into cash flow, SEK 1.4 billion. In the end of 2017, we had low inventory levels and that situation has normalized. We have built inventories and that gives a negative impact from working capital in the cash flow adding up to SEK 1.4 billion. Apart from that, slightly higher tax paid due to the strong result last year, but I think the main thing here is that we have a slightly higher inventory. Moving on then to the balance sheet. You can see we have on the chart at the slide, we have 7 consecutive quarters now a strengthened balance sheet. We're down to 6% gearing. Net debt is down to SEK 2.5 billion and we have a financing that we're happy with. We have low funding costs, 1.2% interest rates and a duration of 2.7 years. Payment capacity very high, SEK 12.2 billion which is stronger as an effect of the expected dividend payments. So that was a brief summary of the financials, Lennart, would you like to conclude.
So as always we try to point out what happened in the first quarter which is good to understand, are there any extraordinary or unusual things as a guidance for going forward. If we start with Aitik, the crusher program is going very well. If anything, it's going -- well, it's going according to plan, but you always have precautions or uncertainties, but I must say that the running in or commissioning at this point is going very well. So I have no problem whatsoever to report on. However, running up or commissioning or run in of big equipment is always involving higher risk than going, sort of going forward or an ongoing situation. So the risks are not over of disturbances, but as far as I can say, I have nothing to be very nervous about. The guidance for grades in Aitik, we had the one year or full year guidance, we have had a very strong quarter in Q1 and we have seen that we dare to tell that it's probably going to be a little bit better than we have said before in the rest of the year in Q2 to Q4. So the new guidance is 0.26%. The guidance of 2019 is unchanged.Garpenberg, low zinc grades and high silver grades in Q1. So I think this will probably normalize, in other words, you could probably expect some reverse on those quite unusual grade situations. The guiding for 2018 is unchanged with 4% and [ 115 grams ] of silver. We had very good grades in Tara in Q1, so be a bit careful with that one. The continues or the winter I mentioned at the beginning continued into the second quarter. If you're a skier and you are in Scandinavia, it is an amazing skiing season also now. So it’s a lot of snow, it has also been a lot of snowfall, so we have had some disturbances also in the second quarter, which is unusual, nothing to be nervous about too much, but still some disturbance. 2018 benchmark for TC, zinc TC have not been settled yet and I'm sure we will have a lot of questions on it, but we are sort of taking the profits in the zinc smelters, in line with what we think will be the zinc TCs and we are not going to voice our opinion where that will be. So that's the situation there. Positive internal profit elimination in Q1, that's a 0 game. So it's sometimes up and sometimes down, it was positive in Q1. The maintenance stops in -- the planned maintenance 2018 is only SEK 200 million compared to over SEK 400 million last year. So if last year was an exceptional heavy year, it's rather a quite light year compared to the sort of long-term average, SEK 130 million will be in the second quarter. And the CapEx guidance remains unchanged.I think the conclusion is very much what we have said before, we are in a situation where very good times for mining where we are right now is offset by not so good terms for the smelters going opposite direction. This gives us a more stable over cycle stability than most comparable companies. Base metals and precious metals also tend to go opposite directions and add to our stability, but also our synergies and our ability to take complex materials from external suppliers. We have the highest productivity in the world in Garpenberg and in Aitik, we have the AGM today at Garpenberg. We are going to have a lot of people going underground. We have with investments or the cost involved in an AGM on site. We have also had family days, we have had days for people living around here, we have had school classes from the towns from around the area here, we have done surveys on the school children or school class people 15 years old and 72% answered on a survey after having been with us at Garpenberg that they would be interested to work as adults in our mines, which is a very exceptional number I think. So we're very pleased with that. Strong balance sheet, we see how tremendous our cash flow is right now and the gearing is going very, very quickly to 0. High grades, stable smelter production, new crusher in Aitick under commissioning and it's going well and I think that concludes our presentation. So now we are prepared to take questions.
Yes, operator, please go ahead with the Q&A session.
Thank you. The first question comes from the line of Alain Gabriel from Morgan Stanley.
Two questions from my side. Firstly, on the Aitik [ grades ] Lennart, you mentioned that higher grades go hand in hand with lower throughputs. How should we think about the throughput for the remainder of the year on Aitik and then does the higher grade profile in the remainder of the year mean that you're bringing forward higher grades from 2019? That's the first question and the second question is on the market terms that you mentioned in this smelting business, have we seen the full negative impact of the weaker market terms in Q1 or will we see another step down in Q2?
Okay, on Aitik, I think we will continue approximately as now to mine the lower parts which is very high grade, but of course, we will now commission and start seeing volumes from the top and we have a lot of ore there, big volumes and lower grades. So we will sort of blend in lower grade material. So I think the base -- the scenario is higher volumes with a lower average grades, which is made up of the high-grade stuff we're doing and then blend in more low-grade material and some of that material will probably be very low grade to compensate for the high. So we're going to see a normalizing grade situation at high volumes we hope, but again, in the second quarter, I would say we are in a starting up period and the risks are there and it's going to be a bit on/off, so volatility on both volumes and grades will remain in the second quarter and thereafter I think we are quickly coming into the guidance values and with the variations we may have in the second quarter. Nothing I necessarily believe will happen, but a probability which is there. The second quarter -- the second question was about market terms and we have seen about half the -- I mean, we have inventories. When the year starts, we have inventory with the old terms. The new terms will start to hit or to impact us from the 1st of January deliveries, but now we get them delivered and they will be sort of compensated or adjusted in retrospect, so if we assume the right levels, which I think we do more or less, then we are probably seeing half of -- to get a ballpark picture, half of the volume of the smelters have been on inventories from last year and half from the new year. So, yes, there will be an additional impact in the second quarter.
The next question comes from the line of Liam Fitzpatrick from Deutsche Bank.
Two questions as well. Just wanted to push you a bit more on Aitik, I guess this year is going to be a ramp-up year but are you willing to give us throughput guidance or a range for 2019? And then secondly, just on mining grades, Aitik you've explained but we've also seen big variances versus your guidance at Garpenberg, I think Kevitsa was higher as well. So are you still comfortable with your full year guidance at those mines and are you able to give us guidance for the zinc grades at Tara?
A lot of questions. Of course, I agree, we have had more variations in different mines from probably what is normal. Mining is such, we are in different areas, we have rock stability and I'm going back to the previous quarter rock stability problem we have to redirect and probably going to lower grades areas some time and then we go back and then we take the high-grade areas we planned in the first place. So, of course, this is normal for any kind of mining. So the variations are typical for mining even though I have to admit that we have had a little bit more than normal and certainly true for Aitik. What was your additional question?
You do know we had lower grades, lower zinc grades than the full year guidance in Garpenberg, that was something we talked about in Q4. I expect that to continue a bit into Q2, but the full year guiding remains. Please also note that we had very high silver grades in Q1 and the full year guiding also remains there. Tara also very high zinc grades, we expect that to normalize during the rest of the year. So that is nothing that I think you should plan to continue. I think that's maybe some more --
So in other words, in broad or in general our guidance remain there, but you had the additional question I was thinking of, volume in Aitik, let me comment you were asking about that. I mean we have typically been sort of close to [ 40 or around -- call it a little bit below 40, sometimes over million tonnes a year and we're going towards 45 ] and one of the key elements is to get stability in the crushers and the new crusher is looking very good. I was there the other week, I was looking at the commissioning and starting up. It's the workhorse with redundancy which we didn't have in the previous surface crusher. We have basically 2 crushers in the same system, so we can maintain one when we operate the other and this has been a major bottleneck for us or the main bottleneck in the system for years. So I think that as soon as we're up running with 2 crushers in the second half of the year, we are going to be back on the good levels and moving towards the 45 million tonnes. How fast that will go and going into details, I'm not really up, I'm not really interested. Today, I'm very excited about and the focus is to get the commissioning going, it's going to plan. Once that is happening, volumes will come at a speed we can talk about later.
The next question comes from the line of Jatinder Goel from Citigroup.
Just a question. [Technical Difficulty]
Ladies and gentlemen, I'm sorry to say that we had a technical disruption, but now we're on again, so please go ahead Mr. Evrell and Gabrielsson.
Jatinder, please go ahead with your question. Thank you.
Not sure what happened there, I'll start again. Just on grades, you have seen a month into the second quarter already, so on [ Garpen ] then Tara, do you expect the diversion already into second quarter or is it more of a 2H event when grades are -- go into more normalized [ territory ].
I think [ Garpen ], in fact, we came in slightly above what we expected in Q1 and that means that in Q2 we will probably still mine below full year average at least in the beginning. Tara, we expect a normalization from Q2 including [ Q2 ].
The next question comes from the line of Ola Soedermark from Kepler Cheuvreux.
Yes, coming back to Aitik and the crushers and the guidance. Can we view that you're giving this firm guidance quarter-for-quarter or the rest of 2018 that you are very confident in the commissioning of the new crusher station that you dare to improve the guidance a little bit?
I mean the philosophy of guiding we have is that we don't normally guide on things which are on average grades or on a continuous or on a steady state kind of situation. And then we focus when we start up such a big thing we're doing in Aitik right now, then we narrow in and then try to lead you as good as we can. The problem is in reality -- the reality, the real situation is a bit volatile which is absolutely normal when you start up an equipment on the kind. So the precise guidance or the quarter-by-quarter guidance we will do when we think it is important for the market to understand what's going on, but in a normal situation, I don't think you should view this as a sort of a trend towards more short-term guidance. We will do it and we will continue to do it on a need to be kind of basis.
Just to be clear, I'm not sure, maybe I misunderstood your question, but the guiding of 0.26% is for the remainder of the year average. So it's not each quarter exactly at that level.
The next question comes from the line of Christian Kopfer from Nordea.
Just a few follow-ups from my side, sorry if you have already answered these questions, it has been a lot of disturbances on the line. So, but apologies for that in that case, but on the Tara volumes, Lennart, I think you mentioned that you had a lot of winter disturbances in Tara for Q1. What is the normal [ mean ] volumes for Tara, would you say in the normal weather scenario?
We never have the weather scenarios at all in the underground mines. It's very unusual that we have, but this time it was because of people couldn't get out on the roads. They got 30 centimeters or 10 inches of snow overnight and everything just collapsed and it did for several days. So I think the normal guidance is absolutely no problem with winter conditions either winter or any month at all. So we don't have any weather sort of pattern in any of the underground mines typically.
Yes, but if you just look in tonnes, I mean the Tara has -- in my book, it has underperformed the last number of quarters.
Yes.
If you go back couple of years, this mine has produced somewhere around 650,000 tonnes per quarter.
Yes.
So is 650,000 tonnes per quarter the right magnitude what Tara should perform?
I think here you should look at a mine which was going to close by 2019, which has been extended and extended and extended and of course we are suffering from some old equipment which was planned to be depreciated and we're now buying new things. So we see a little bit of an impact of previous plans and now we are accelerating again, we have a longer life of mine plan and we're seeing what's -- [ an addition ] we have a lot of enthusiasm for Tara Deep even though we're not doing any drilling there, we are building the drift into or the ramp into Tara Deep and so I think the decline which you can see on the graph I showed before, it is a longer-term step-by-step in a negative direction. I think that will be over time reversed, but it's a bit of the reasons why.
All right. Then on the SG&A cost. They have come up more than 20% here in Q1 versus Q4. I think it was [ SEK 260 million ] in Q1. Is there a special reason for this or is this a level of [ SEK 260 million on SG&A ] is that also representative for the next couple of quarters?
I think you should -- let's see then. I think all in all Q1 is representative when it comes to cost. That is the general comment. Then we had -- the only thing is the one-off adjustment in -- connected to the fire in Bergsoe. Apart from that, I believe it's representative.
So the fire in Bergsoe, was that in SG&A or?
No, it was not.
Okay, so why did the SG&A come up heavily then for Q1 versus Q4?
Let's see then…
[ SEK 260 million ] in Q1 was more than 20% higher than in Q4.
I think we have we an extent to normal variations in the amounts so I don't think I can go into more detail on that.
But listen, I think important is we are primarily following the entire cost development and you have the cost bridges and you see we generally have very good control over inflation, we have a few percent and the variation between the lines is more -- is less relevant than looking at the cost breakdowns in the cost analysis or in the P&L analysis. So I think please follow that more or look at that, which is more important I think.
Okay, finally for me then on CapEx, you've guided slightly above SEK 6 billion. If you look historically you more or less always come in below that and if you look at the CapEx for this quarter, it was SEK 1.1 billion, which is far below. I mean it's implying that you should come in far below. So I mean are you sticking to this slightly [ above SEK 6 billion ] obviously you are, but I mean how will you get there? Then CapEx should come up dramatically then for the next couple of quarters.
I think you can say that we're always back-heavy when it comes to CapEx more during the summer season and the latter part of the year [ starting in Q1 ]. SEK 6 billion is a big amount. There are some operational challenges to deliver on that, they are important projects, a lot is maintenance CapEx. So that is something that we're working hard on achieving because not doing it will have a negative impact on production, but we are slightly behind. That's correct. The plan is still to catch up during the remainder of the year.
The next question comes from the line of Gustaf Hansson from Pareto Securities.
Just a follow-up question on the Q1 volume loss in Aitik. Can you quantify the loss due to the new crusher and how much is just normal seasonality? Then a follow up on that, I mean sorry again as this has been discussed but I didn't really get your answer on the Q2 Aitik grades. So is it fair to assume continued higher grades in Q2 and then declining in the second half of the year?
We don't give guidance by quarter. Now we say that the total of the 3 quarters will be higher than we said before, the 0.26%. It's possible that we are seeing higher grades than the 0.26% in the second quarter, but that is most likely then related to lower-than-planned volumes. Again, but we have a mix change. So I think you if you look at contained metal it’s probably a more -- a less volatile parameter to look at in the commissioning stage we are in. And then what is winter conditions, how much should we take out of the winter? It was a quite heavy winter this year. We had a bit of disturbances and it can be maybe 5% or 10% of volume in the first quarter compared to the average of the year, ballpark, but I think, it is very volatile and whether you can never talk about, but it has been a quite big impact this year. So it's quite bad weather year and it was also in the other open pit, the Kevitsa also was hit by weather conditions probably more than normal. If anything, its normal with weather by the way.
The next question comes from Johannes Grunselius from Handelsbanken.
My first question is also on Aitik. When you are ramping up now and execute on the crushing project, are there any extra cost involved or is everything here capitalized as CapEx? Can you help me on that one, please?
We have of course the operations are costing more, we have people on training and so on. So there is a bit of cost for commissioning, but it's not big numbers on the project itself. Most was in the CapEx of last year, but we have of course are holding some equipment payments until commissioning and sort of all the test criterias that have to be met for final payments with the main suppliers. So in the first quarter, basically everything was installed, we're holding some payments and they are probably going to be paid in the second or quarter. So OpEx a little bit; CapEx, quite a low period in the first quarter.
Okay. Then also on smelters and you showed us during the presentation, Lennart, investments in Finland, Harjavalta I think. I think you also have made recent investments in Odda. Will this have any sort of significant impact on the results for the upcoming quarters because it's been quite heavy investments done?
I mean basically what we are doing, we are increasing up-time, we're reducing unplanned small stops. We are doing some improvements in capacities, de-bottlenecking in some parts over time. Yes, there is, I mean we have expansion plans in particularly in the mines, all the mines are in different kinds of expansion stages, Garpenberg to 3 million tonnes, Tara with the new sort of prolongation and then later on opportunities or potentials, Aitik we spoke about and so on and we spoke about last time, the investments we're doing in Finland in both Harjavalta and in Kevitsa. So I think that in general, you have the picture of growing production without being too dramatic in most of the units, in the smelters, in particular, we are doing debottlenecking smaller projects, smaller improvements which should increase the up-time, it's not going to change the picture, but improvements.
Okay. Then my last question is on the market terms for the smelters as you elaborated on the call here, but is the new terms fully in your P&L when it comes to the mining side because lower TC/RC also means an uplift for your mines obviously, but is everything reflected on the mining division here?
We apply the same thing in both because otherwise we would understate or overstate. So for example in zinc where we have a high degree of internal, well, if we have done something wrong with the TC assumptions, well, they are hitting one way in the smelters and one with the mines and the external part is relatively limited. So yes, same terms are applied in both.
The next question comes from the line of Daniel Lurch from Exane BNP Paribas.
Just 2 quick ones. You highlighted in your presentation on copper clearly benchmark or spot terms are currently below benchmark. Can you speak a bit about copper concentrate supply, how you see it at this point and do you think that the current spot terms are reflective of tightness in the market? And maybe quickly some comments on copper scrap availability in Europe, do you feel that there is increased competition with China for volumes and my second question just quickly coming back on the benchmark terms, quick follow-up, so you outlined that your Q1 includes an assumption on your zinc benchmark TC or where you expect the TC will settle at least for the contracted volumes. Once the benchmark is settling, how does it work? Will you issue a restatement or will this be done as part of the Q2 results?
Well on corporate TCs, I think in general we do not forecast any TCs and we don't want to involve in and certainly in zinc where they are still open. So I think that the terms are in copper well known in zinc, they are open and we don't want to sort of comment on them too much. On the scrap availability, I think there is, this is a real thing happening in the market with China and scrap. We have longer-term agreements with some of the sources of scrap and we are not very affected by it at this point.
And the last point, yes, we do a correction once the final -- once the benchmark TCs are known, so that will hit Q2 in that case.
The next question comes from the line of Luke Nelson from JPMorgan.
Just 2 questions for me. Firstly, a question on CapEx relating to your early comment about issues or potential issues deploying the SEK 6 billion as per guidance, but relative to potential impacts on production thereafter if you didn't achieve that. It will be interesting if you can just give us a bit more granularity on exactly how you're seeing any potential impact from not being able to deploy the CapEx this year particularly from sort of 2019 and beyond perspective on mine plans and how you see that evolving. And then the second question for me, just on the internal profit adjustment obviously a large positive there. Can you [Technical Difficulty].
Well, I'm sorry to say we had technical disruptions again, but please go ahead.
So we were on CapEx of -- or guidance and what happens if and things like that. I think in general, we are in control of the CapEx. No problem, we will come back to somewhere of the guidance for the year. Suppose that it doesn't happen. Well, that is not the scenario we look for, but in that case, I do not -- there are nothing critical that we are missing a maintenance stop and therefore have a new risk picture of equipment which have to produce one more year or something like that. The impact will then be several year later in increasing the dam heights or whatever. Things like that, stripping in open pits and things like that. We have plenty of time to do corrective actions and I see no reason to be cautious about this, but again I think we will be back on the CapEx terms and as you mentioned in the beginning, this is a typical seasonal pattern, a lot of suppliers are sending in a lot of bills and we are, it's a very hectic period in Q4 and then it's a little bit of a vacuum when you are into the first quarter. So it's nothing to be -- nothing very special about this.
Sorry and then it broke up there, there was a bit of static, the question on the internal profit adjustment, the contribution from inventory and pricing?
I don't think we heard that question, could you kindly repeat that question for us. [Technical Difficulty]
Okay, a lot of problems with the lines. I think here on internal profits, Hakan --
We didn't quite hear the question, but just to give a flavor of the volumes, we are clearly below average now when it comes to inventory volumes of internal stock and that might perhaps be an indication where we are heading going forward. Apart from that, I didn't quite hear the question, so maybe you want to conclude?
Yes, from that what I understand, it was the last question, was it or -- so we conclude this quarter, it was another strong quarter for Boliden. A typical Q1 situation. We're going into the second quarter now with obviously spring weather no problems with the open pits. We're going to have slower or lower maintenance than we normally do and then we have a number of things related to grade variations and we have tried to guide you as good as possible and we have both sort of positive and some negative deviations on that one. It's my last quarterly presentation, I've done 42 now and I'm very thankful, it has been a privilege to work with Boliden and with our shareholders and I thank you so much for a great number of years. Thank you very much.